GENEVA-FIFA confirmed a sponsorship deal with Aramco, the national oil company of Saudi Arabia, on Thursday, strengthening its relationship with the country. Aramco generated a $121 billion profit last year. The agreement was anticipated and eventually became unavoidable after Saudi Arabia was virtually confirmed to host the men’s World Cup in 2034 in October of last year.
The significance of the sponsorship deal
The agreement, which runs through 2027, covers the 2026 men’s World Cup, which will be co-hosted by the US, Canada, and Mexico, as well as the 2027 women’s World Cup. Next month, a three-candidate vote will choose who hosts that event. Although the Aramco agreement’s value was not made public, it is most likely the biggest FIFA deal ever in terms of average yearly value.
FIFA did not specify the format for the first-ever 32-team Club World Cup, which will take place in the US in 2019 but may be a part of an independent agreement. The soccer organization stated in a statement, “Aramco and FIFA intend to leverage the power of football to create impactful social initiatives around the world through the partnership.” FIFA’s 2023–26 commercial cycle, which was conservatively estimated to bring in $11 billion, would benefit from Saudi sponsorship.
FIFA’s expansion strategy
During the four years leading up to the 2022 World Cup in Qatar, revenue from sponsorship, video game licensing, ticket sales, and hospitality packages totaled $7.5 billion. Since before the 2018 World Cup, FIFA President Gianni Infantino has developed a tight relationship with Saudi Arabia and its Crown Prince, Mohammed bin Salman. Gazprom, a governmental energy company in Russia, sponsored that competition.
The aftermath from the 2018 murder of Saudi writer Jamal Khashoggi and accusations of “sportswashing” by the monarchy to boost its image did not break FIFA’s relationship with Saudi Arabia. By the end of that month, Saudi Arabia was officially acknowledged as the lone contender for 2034. Later this year, FIFA member federations must ratify the 2030 and 2034 resolutions. The location and date of the 211-member gathering are yet unknown. In the ten years preceding the World Cup, which will be hosted in Saudi Arabia, those members will receive higher yearly payments from FIFA.
Aramco’s role as a sponsor
FIFA’s development program provides up to $8 million each federation over a four-year period until 2026. Additional funds may be allocated for certain projects such as stadiums, training facilities, and federation offices. Following the 2022 World Cup in Qatar, which also featured Qatar Energy as a top-tier sponsor from the fossil fuel sector, FIFA already had $4 billion in reserves. Although a proposed agreement for the 2023 Women’s World Cup was canceled due to opposition from the organizers in Australia and New Zealand, the Visit Saudi tourist board was a third-tier sponsor of the competition held in Qatar. The importance of gender equality was highlighted by soccer authorities in those host countries, alluding to the restrictions placed on women’s liberties in Saudi societies’ typically conservative outlook. Saudi soccer authorities emphasize that, as part of the crown prince’s (MBS) Vision 2030 initiative to modernize society and the economy, life there is changing quickly.
Potential criticisms and controversies
The program has made significant investments in soccer, sports, and entertainment, such as the purchase of Newcastle, an English Premier League team that qualified for the Champions League two years after being taken over by Saudi Arabia, and the breakaway LIV Golf Tour. In order to entice a number of elite players, such as Cristiano Ronaldo and Neymar, to teams that were essentially nationalized last year by the sovereign wealth Public Investment Fund, which is led by the crown prince, the Saudi domestic league was bolstered with enormous wages. Crown Prince Mohammed bin Salman, who was then barely known outside of the area and is now a significant figure in world affairs, spearheaded the initiative from the beginning.
Conclusion
In conclusion, FIFA has confirmed a sponsorship deal with Aramco, the national oil company of Saudi Arabia, strengthening its relationship with the kingdom. Once it was virtually confirmed in October that Saudi Arabia will host the men’s World Cup in 2034, a deal was anticipated and appeared probable. The 2026 men’s World Cup, which will be co-hosted by the United States, Canada, and Mexico, and the 2027 women’s World Cup are part of the anticipated agreement that runs until 2027. Although the deal’s exact amount is unknown, it is probably the biggest FIFA has ever done in terms of average yearly value.