12 Hrs
Source:
الاقتصادية
Saudi clubs' funding post-privatization
Saudi clubs are moving towards a new financial era based on building independent financing structures that allow them to borrow against future cash flows from assets, rather than relying solely on shareholder support. A report by Alvariz & Marsal highlights that sponsorship receivables are among the most valuable financing assets, as clubs can obtain funding based on their future inflow from sponsorship contracts extending over several years, especially when these contracts are with high-creditworthy entities. The report also emphasizes the importance of diversifying revenue sources, such as international broadcasting rights, increasing commercial activities, developing and selling players, in order to reduce the gap between fixed expenses and irregular income. This shift enables clubs to service their financial obligations in a more sustainable manner, relying on financing structures including sukuk (Islamic bonds), private credit, and asset-backed pledges, with the aim of enhancing their borrowing capacity and diversifying funding sources, particularly as Saudi Arabia hosts the 2034 World Cup.
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