The Saudi pullback from sports investing shows even the ultra-wealthy are trying to cut costs

• The Saudi Public Investment Fund has been reducing its expensive global sports investments in recent days.

• The moves come alongside a five-year plan that promises a greater focus on domestic investment.

• For the first time in years, the country appears to be prioritizing finances over image.

Everywhere you look, cost cutting is reshaping the economy.

From a consumer perspective, Walmart has an edge over peers like Target because shoppers are turning to lower-cost options. Cost cutting from employment POV resulted in widespread layoffs, especially in the technology industry. Meanwhile, the rise of artificial intelligence is built on the idea that tasks will be completed more efficiently and at lower cost.

It turns out that even the richest people on the planet are not immune from tightening wallets. The Saudi Public Investment Fund (PIF), led by Crown Prince Mohammed bin Salman (MBS), has recently begun to shrink its international sports portfolio:

A separate addition to this Report on funding doubts over flag football event starring Tom BradyThe trend is clear: a broad retreat from expensive global efforts to expand Saudi cultural influence. For the first time in years, the country appears to be prioritizing finances over image.

The five-year strategic plan for the country approved by MBS this week confirmed a more narrow-minded shift. One of the top priorities is to “maximize returns and redistribute capital into the domestic economy.” he said release.

The Saudis may instead be considering allocating money to the World Cup, which they have been selected to host in 2034. It’s also possible that the impact of the Iran war on oil production, the Saudi crown jewel, could lead MBS & Co. to be more cautious with the fund.

Could this newfound frugality show up in other parts of the Saudi investment portfolio? After all, PIF has interests that go far beyond LIV and Al-Hilal:

• Shares of major shareholders Ubervideo game producer Electronic Artsand EV manufacturer Lucid

• A long-standing infrastructure partnership with Blackstone, including a recent collaboration to build data centers in Saudi Arabia

• Ownership of English Premier League football club Newcastle United

It is unclear what moves PIF may make in the future. But MBS appears to be losing patience with efforts to at least lose money. How this manifests itself could reshape entire industries dependent on Saudi investment.

The way things are going, if I were Newcastle, I look at my position in the Premier League and get pretty nervous. Because one thing is certain: When the Saudis throw money around, they do it to win. And 14th place just doesn’t cut it.

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