…And here I was, impatiently waiting for the call offering me a big-money gig at that fancy new Super Saudi Boxing News site.
I was already practicing my tearful Andy Ruiz-like post-paycheck public statement.
“We don’t have to struggle no more, Momma!”
Well, I’m glad I didn’t do anything stupid like take out a line of credit to buy a new computer with, unlike my current laptop, “B” and “Y” keys still attached to the keyboard. Because, from what I’ve been reading and hearing, boxing’s Saudi sugar daddies are starting to sour.
An article posted last week in The Financial Times chronicles the new financial realities of Saudi Arabia, which demand that they begin downsizing investments after years of wild, aggressive spending via its $925 billion Public Investment Fund (PIF).
Given a recent decision to cut oil production to stabilize crude prices, the Saudis’ budget surplus has turned into a deficit. That means the kingdom’s money outreach is being pulled back, replaced by a more conservative spending mindset.
Per the Financial Times:
“But as the kingdom reassesses its priorities and the $925bn Public Investment Fund shifts focus to huge domestic commitments, the era of Saudi Arabia being perceived as a source of easy money is drawing to a close.
‘It is ending,’ said a senior Dubai-based investment banker. ‘People are realising it.’
…‘For the last eight years, Saudi Arabia has gone out to the rest of the world with an open hand of money. Now the fist is clenching and pulling back to the country,’ said a London-based investment banker. ‘It’s part of the maturing strategy. They could not have gone on like this forever.’
…‘There is a pause in terms of spending, definitely global investments are not going to be there in a major way over the next two to three years,’ said a Saudi executive. There would be exceptions, he explained, particularly in areas deemed to add value to the kingdom, such as manufacturing, artificial intelligence and technology.”
There may even be some resentment from the Saudis, as carpetbaggers of all sorts have rushed to them for funding, seeing them as money marks.
“The other aspect is the Saudis are sick to the teeth of being treated just as a cash cow, and they are extremely suspicious of fee chasers,” a London-based banker told The Financial Times. “They want people to put skin in the game.”
In other words, the Saudis want investment partners who will not only deliver profit on their investments, but also contribute to in-country Saudi Arabia infrastructure and well-being.
That sure as hell ain’t boxing.
By all accounts, the Saudis’ initial US effort at BMO Stadium in Los Angeles this past August 3 was a financial flop, with millions lost on the mega-hyped event featuring Terence Crawford vs. Israil Madrimov in the main event. By most accounts, just about every Saudi boxing show has lost money, operating deeply in the red.
That wouldn’t be such a big deal if this entire boxing endeavor was a pure loss leader where money was no object. But, apparently, money now IS an object.
The shift in the Saudis’ spending philosophies would explain their point man Turki Alalshikh’s sudden shift towards value over blanketed money.
It certainly explains the pivot away from Alalshikh’s multi-billion dollar boxing league idea to the infinitely less sexy strategic “partnership” plan with sanctioning bodies, promoters, and select individual fighters. It also explains why the creation of that fully-staffed Super Saudi Boxing News site has dragged on so long and may have taken a back seat to “sponsoring” certain writers and websites– wink, wink.
One might notice, as well, the recent scaled-down undercards of Riyadh Season events. Notably, the fairly bare-bones undercards for Joshua-Dubois and Beterbiev-Bivol (No, they are NOT “stacked” and even the Shakur Stevenson-Joe Cordina co-feature on Beterbiev-Bivol looks like a budget showcase).
The hungry, hungry boxing business world was banking on a money train and it appears as though they only managed to grab on to the caboose.
And that’s why, if you notice, some of these media creeps are starting to emerge with “critical” takes on the Saudis and their influence. It’s because there’s now the distinct feeling that the filthy lucre won’t reach them after all.
Does this mean that Turki is broke or that his Saudi money well has completely dried up? No. Alalshikh still has more spendable cash at his disposal, by far, than all of the major promotional companies combined. It might mean, however, that he won’t be able to flat-out buy boxing anymore– he’ll have to lease.
It also means that the boxing money-takers might have to actually provide return-on-investment from this point forward– something that their failure to do, using their own money, sent them begging to Alalshikh and the Saudis in the first place.
I’ve said this many, many times in the past– even if you wouldn’t know it by how my thoughts and ideas are co-opted without credit by “establishment” media– but walking hand-in-hand with the Saudis is a dangerous game.
Beyond the obvious moral dilemma of dealing with the “kingdom,” handing over so much influence to tyrants with no sense of business fair play, no taste for dissent, and absolutely no accountability is beyond stupid.
All of this Saudi/Turki stuff only makes sense if you’re a “burn down the village to save the village” kind of guy and are hoping for a boxing collapse to foster in a new age of smarter, more emotionally mature boxing businessmen.
Got something for Magno? Send it here: paulmagno@theboxingtribune.com
