s.bensayah@univ-soukahras.dz

i.layadi@univ-soukahras.dz

*Lecturer Professor at the Institute of Science and Technology

of Physical Activities and Sports. University of Souk Ahras

Doctorate in Science and Technology of Physical and Sports Activities,

specializing in Sports Administration and Management

Assistant Director for Studies and Issues Related to Students

in the Sciences and Techniques of Physical and Sports Activities

University of Souk Ahras

** Lecturer Professor at the Institute of Science and Technology

of Physical Activities and Sports. University of Souk Ahras

Doctorate in Science and Technology of Physical and Sports Activities,

specializing in Sports Administration and Management

Responsible Officer, Master's Degree in Management

of Sports Facilities and Human Resources University of Souk Ahras

(Algeria)

Reception: 01/29/2024 - Acceptance: 02/27/2024

1st Review: 02/15/2024 - 2nd Review: 02/24/2024

Accessible document. Law N° 26.653. WCAG 2.0

Suggested reference: Bensayah, S., & Layadi, I. (2024). The Development of Market Values for First Saudi Football League Clubs. Study from July 2023 to October 2023. Lecturas: Educaciَn Fيsica y Deportes, 28(310), 51-62. https://doi.org/10.46642/efd.v28i310.7453

 

Abstract

    The market value of the Saudi Football First Division League experienced a significant surge in the 2023-2024 sports season. This study seeks to analyze and compare this increase with major international leagues while exploring the underlying reasons. In addition, the market value growth of the Saudi League is analyzed, particularly focusing on its major clubs, during the period between July 2023 and October 2023. The analysis will involve a comparison with prominent international football leagues, taking into consideration the spending volume during the last summer transfer window. It is concluded that the surge in the financial value of the Saudi League is primarily attributed to the implementation of a new sports policy involving the privatization of sports clubs acquired by the Saudi Investment Fund. Additionally, the increase in the market value is influenced by the notable players contracted by the four privatized clubs.

    Keywords: Market value. Saudi League. Soccer.

 

Resumen
    El valor de mercado de la Liga Saudí de Primera División de Fútbol experimentó un aumento significativo en la temporada deportiva 2023-2024. Este estudio busca analizar y comparar este aumento con las grandes ligas internacionales mientras explora las razones subyacentes. Además, se analiza el crecimiento del valor de mercado de la Liga Saudí, centrándose especialmente en sus principales clubes, durante el período comprendido entre julio de 2023 y octubre de 2023. El análisis implicará una comparación con importantes ligas de fútbol internacionales, teniendo en cuenta el volumen de gasto durante la última ventana de transferencias de verano. Se concluye que el aumento del valor financiero de la Liga Saudita se atribuye principalmente a la implementación de una nueva política deportiva que implica la privatización de clubes deportivos adquiridos por el Fondo de Inversión Saudita. Además, el aumento del valor de mercado está influenciado por los jugadores destacados contratados por los cuatro clubes privatizados.
    Palabras clave: Valor de mercado. Liga Saudita. Fútbol.

Resumo
    O valor de mercado da Liga Saudita de Futebol da Primeira Divisão experimentou um aumento significativo na temporada esportiva 2023-2024. Este estudo procura analisar e comparar este aumento com as principais ligas internacionais, explorando ao mesmo tempo as razões subjacentes. Além disso, é analisado o crescimento do valor de mercado da Liga Saudita, com foco especial nos seus principais clubes, durante o período entre julho de 2023 e outubro de 2023. A análise envolverá uma comparação com importantes ligas internacionais de futebol, levando em consideração o volume de gastos durante a última janela de transferências do verão. Conclui-se que o aumento do valor financeiro da Liga Saudita é atribuído principalmente à implementação de uma nova política desportiva que envolve a privatização de clubes desportivos adquiridos pelo Fundo de Investimento Saudita. Adicionalmente, o aumento do valor de mercado é influenciado pelos notáveis jogadores contratados pelos quatro clubes privatizados.
    Unitermos: Valor de mercado. Liga Saudita. Futebol.

 

Lecturas: Educación Física y Deportes, Vol. 28, Núm. 310, Mar. (2024)

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Introduction 

 

    The sports sector has become a focal point for numerous countries globally, recognized as a key component of modern economic diversification. Sports has transcended its role as a mere recreational pursuit, evolving into a viable business option and a significant societal domain (Saveleva, 2020). It competed to organize international sporting events that would bring huge profits to the organizers, as indicated by Teare et al. (2024). Investment in sports also has a direct impact on the economic sphere of the state and society, on structural changes in consumer behavior (Saveleva, 2020), additionally, investing in stadium sponsorship, as many teams moved to new, non-historical stadiums sponsored by major companies, which brings commercial benefit to the club and investors alike (Nakazawa et al., 2016).

 

    In the past few years, the global sports industry has witnessed consistent growth with a Compound Annual Growth Rate (CAGR) of 8.1% annually. Projections indicate that the market value is expected to reach US$253.465 billion by the year 2024. (Lv et al., 2022).

 

    Football stands out as one of the most popular and widely followed sports globally, attracting substantial sports investments. It holds the top position as the world's premier sport, boasting approximately 200 million players, including a significant participation of 40 million women as of the year 2004 (Dvorak et al., 2004). In addition to the large numbers of fans who follow this sport, which attracted the interest of major international companies interested in investing in this sport, which explains the high market values of sports clubs and international championships, which was indicated by Šerić & Ljubica (2018).

 

    Particularly with the ability to reach the widest audience segments, either through live attendance at stadiums or in the comfort of their homes via social media platforms, sports events have become more accessible and engaging for viewers (Kunz-Kaltenhنuser, 2023) and Kang (2017) noted Market values include human resources markets (players, coaches, referees, and managers), sporting goods, facilities, media, information, sponsorship, promotion, licensing services, tourism, and management. Some football associations have also activated fan memberships to bring them closer to their fan clubs and as a means of modern sports marketing (Dias & Monteiro, 2020)

 

    The English Premier League stands out as one of the most successful examples in recent decades for the development of market value, reaching impressive figures surpassing $10 billion. This success has positioned it significantly ahead of other European and international leagues. The remarkable achievements of the English Premier League have prompted many other leagues to emulate its model and draw lessons from it, as witnessed in the recent developments within the Saudi League.

 

    The leadership of Saudi football initiated a novel approach by privatizing sports clubs, transferring ownership to the Saudi Investment Fund. This fund, known for its ownership of Newcastle United, a prominent team in the English Premier League, which boasts the highest market value globally.

 

    Observers of market values can attest to the remarkable surge in the market values of Saudi League clubs, experiencing almost a threefold increase in a brief period. This ascent has propelled it into the ranks of the top ten leagues globally and secured its position as the second-highest spender in the world during the summer transfer market. The administrators of the first professional Saudi Ocean League strategically pursued the acquisition of international football stars, including notable figures like Cristiano Ronaldo, Karim Benzema, Neymar, Firmino, Riyad Mahrez, and goalkeeper Mendy, among others.

 

    The transfers of these renowned international players garnered substantial attention from various global sports media outlets and websites, projecting high expectations for the marketing success of the first professional Saudi Ocean Football League. This anticipation has been visibly manifested since the commencement of the league.

 

    In this research paper seeks to analyze and compare this increase with major international leagues while exploring the underlying reasonsand taking into consideration the spending volume during the last summer transfer window.

 

Methods 

 

Methodology 

 

    Due to the nature of the subject, the researcher adopted the descriptive approach in his study.

 

Sample of study 

 

    The study sample represented football clubs active in the Saudi First Division Football League in the 2023-2024 sports season.

 

Time domain 

 

    From the beginning of October 2023 to the end beginning of January 2024.

 

Results 

 

Development of marketing values for First Saudi Football League Clubs between July 1, 2023, and October 1, 2023 

 

#	Club	League	Value Jul 1, 2023	value Oc 1, 2023	%
1	Al-Hilal SFC	Saudi Pro League	€45.35m	€257.40m	467.6 %
2	Al-Ahli SFC	Saudi Pro League	€21.18m	€200.98m	849.1 %
3	Al-Nassr FC	Saudi Pro League	€67.23m	€195.56m	190.9 %
4	Al-Ittihad Club	Saudi Pro League	€25.88m	€133.23m	414.9 %
5	Al-Shabab FC	Saudi Pro League	€33.75m	€69.45m	105.8 %
6	Al-Ettifaq FC	Saudi Pro League	€26.53m	€66.80m	151.8 %
7	Al-Taawoun FC	Saudi Pro League	€20.88m	€34.79m	66.6 %
8	Al-Fayha FC	Saudi Pro League	€8.48m	€30.30m	257.5 %
9	Abha Club	Saudi Pro League	€9.48m	€27.13m	186.3 %
10	Al-Fateh SC	Saudi Pro League	€13.33m	€24.78m	85.9 %
11	Al-Riyadh SC	Saudi Pro League	€2.23m	€21.23m	853.9 %
12	Damac FC	Saudi Pro League	€10.35m	€20.34m	96.5 %
13	Al-Tai FC	Saudi Pro League	€11.28m	€17.30m	53.4 %
14	Al-Okhdood Club	Saudi Pro League	€1.35m	€17.28m	1179.6 %
15	Al-Raed SFC	Saudi Pro League	€4.95m	€17.08m	244.9 %
16	Al-Hazem SC	Saudi Pro League	€4.45m	€17.00m	282.0 %
17	Al-Wehda FC	Saudi Pro League	€9.13m	€16.05m	75.9 %
18	Al-Khaleej FC	Saudi Pro League	€7.65m	€15.06m	96.9 %
Total value of all clubs			€323.43m	€1.18bn	265.4 %

Source: https://www.transfermarkt.com/saudi-proleague/marktwerteverein/wettbewerb/SA1/plus/?stichtag=2023-07-01

 

Source: Transfermarkt.com

 

    Researchers have noticed from Table 1 and Figure 1 that:

• The Saudi League has experienced remarkable growth in its market value within a brief period, surging from €323.43 million in early July 2023 to 1.18 billion euros at the onset of October 2023. Examining the growth rates reveals a range between 53.4% and an astonishing 1179.6%, signifying exceptionally high rates of expansion.

• Al-Hilal SFC, leading the Saudi Ocean League, experienced a substantial market value growth of 467.6%, soaring to €257.40 million from €45.35 million at the outset of July 2023.

• Al-Ahli SFC, the second highest in market value, achieved an outstanding growth of 849.1%. Beginning at €21.18 million in July 2023, it surged to €200.98 million at the start of October 2023.

• Al-Nassr FC secured the third position with a market value of €195.56 million in October 2023, displaying a growth rate of 190.9%, compared to its €67.23 million value in July 2023.

• Occupying the fourth spot is Al-Ittihad Club, attaining a market value of €133.23 million in October 2023, reflecting a remarkable growth rate of 414.9% from its €25.88 million value in July 2023.

• Fifth came Al-Shabab FC. After the market value at the beginning of July 2023 was €33.75 m, it grew by 105.8% to reach €69.45 m at the beginning of October 2023.

    This rise in market values reflects the ability to bring international player names to develop these values, which reflects what Rascher et al. (2021) pointed out about the specificity of sports and sports economics, and would increase the attendance of fans in stadiums and increase viewership through television channels, which he pointed out Castellanos, & Sلnchez (2007) and explains why Saudi sports organizers target sports clubs with a large fan base. The gameplay (football) plays a prominent role in this rise recorded according to the findings of Andreff (2012) in his study.

 

The Saudi League is ninth in the world in terms of market values 

 

Source: Alaá (2023)

 

    The First Saudi Football League secured the ninth position globally in terms of its market value, reaching $1.185 billion. It outperformed several prominent international leagues, including the Turkish, Belgian, Dutch, Swiss, and Argentinian leagues. Notably, it stands as the sole Asian and Arab league in the top ten. The English League leads the list with a market value of $10.372 billion, followed by the Spanish League at $4.661 billion, the German League at $4.576 billion in third place, and the French League in fifth place with $3.973 billion.

 

    Several studies have shown that there is a direct relationship between the club's market value and the club's sports performance (Klobučník et al., 2019) especially since this club usually has big names with a large market value based on its sporting results.

 

    As per Herm et al. (2014), the market value of a professional soccer athlete is an estimation of the monetary value a club would be willing to invest to secure the athlete's commitment, irrespective of the specific contractual terms.

 

    Player names significantly contribute to the surge in market values of sports clubs, as highlighted byMüller et al. (2017). These values represent estimates of transfer fees, indicating the prices that can be negotiated for a player in the football market. They play a crucial role in the dynamics of transfer negotiations.

 

The Saudi League is second in the world in terms of spending during the previous summer market 

 

(million dollars) olume of spendingV	League	Ranking
1980	Premier League	1
875.9	Saudi League	2
859.7	French league	3
711	La Liga	4
405.6	Italian Leauge	5
216.4	Portuguese League	6

 

Source: Alaá (2023)

 

    During the summer, transfer window for the 2023-2024 sports season, Saudi sports clubs experienced significant spending, amounting to $875.9 million. This placed them in the second position, following Premier League clubs with a spending of $1,980 million. Saudi clubs surpassed French League clubs, ranking third with $859.7 million, and Spanish League clubs, ranking fourth with $711 million. Italian League clubs secured the fifth position with expenditures totaling $405.6 million, while Portuguese clubs spent $216.4 million, placing them sixth in the overall spending ranking.

 

    The notable increase in spending by Saudi League clubs is primarily attributed to the new sports policy implemented by the sports authorities in the country. The privatization of sports clubs, particularly the four major clubs owned by the Saudi Investment Fund, has played a pivotal role in driving this surge in spending.

 

    Moreover, following a policy of attracting international stars from various international leagues and origins from different continents and countries would increase its fan base, which is indicated by the study of Kang (2017), which concluded that the product strategy and promotion strategy have a role in attracting audiences.

 

    Investment in sports tournaments is the most important modern trend to raise the economies of countries and the safest in achieving financial profit, developing infrastructure and developing tourism in them, which is indicated by Silva et al. (2019) and Marwat et al. (2022). Opolska, & Proskina (2017) noted that sports and sporting events can be beneficial to the country's economy, but in-depth research and estimates are necessary in their favor.

 

    Must also point out that it is necessary to take into account the impact of the mass of wages of the recruited players in addition to the amounts of their recruitment, which can affect the size of the profits expected to be achieved by sports clubs or those in charge of the league, which is indicated by a study of Ascari, & Gagnepain (2007), which requires searching for other ways to cover wages such as sponsorship and television broadcasting rights, which is what has already been done by those in charge of the Saudi League.

 

Conclusion 

 

    Based on the discussions presented in this research paper, the following conclusions can be drawn:

1. The shift in sports policy within countries can have significant positive effects on sports in general, with football being a prominent example. The Saudi model stands out as a compelling illustration of the benefits associated with such policy changes.

2. The privatization of sports clubs emerges as a strategy that injects more financial resources into these clubs, particularly through the acquisition and employment of international players.

3. The increased investment in acquiring players with high market values contributes positively to the overall market value of sports clubs, and by extension, the league in which they participate.

4. The elevated market values of sports clubs become attractive to investors and international broadcasting channels, creating opportunities for increased financial support and broader visibility for these clubs and the league they represent.

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Lecturas: Educación Física y Deportes, Vol. 28, Núm. 310, Mar. (2024)