Saudi Arabia closes in on deal to create new cycling league – sources

Rizzoli Corriere Della Sera Mediagroup SpA

02/02/2024 14:19

* 
      Adds more source comments, detail, background throughout 
    

  
    By Amy-Jo Crowley and Anousha  Sakoui
       LONDON, Feb 2 (Reuters) - An investment firm owned by
Saudi Arabia’s Public Investment Fund (PIF) has emerged as a
frontrunner to back a new cycling league, three people familiar
with the matter told Reuters, the latest move by the kingdom to
buy into global sports.
    SRJ Sports Investments, founded last year, is in exclusive
negotiations over a potential investment of around 250 million
euro ($270 million) in the venture being spearheaded by a number
of major European cycling teams, one of the people said. 
    If successful, it would mark Saudi Arabia's first
significant involvement in cycling after pouring billions into
other sports worldwide such as football, motorsports and martial
arts. Sports is one of the pillars of the government's Vision
2030 economic diversification plan that seeks to build new
industries and create jobs. Some critics have called it an
effort to distract from its human rights record.  
    SRJ is expected to finalise commercial aspects of a deal
over the next two months after prevailing in an auction over
other investors including private equity fund CVC, the person
said. 
    Consulting firm EY had been seeking expressions of interest
from investors for a new project, Reuters reported in October.
Some top cycling teams are concerned that the lion's share of
profits from the main races, including the Tour de France, go to
their organisers and a new league could be a way to recalibrate
earnings, sources previously told Reuters.  
    The venture, which may amalgamate new and existing races, is
being led by a handful of teams including Visma-Lease a Bike and
billionaire businessman Jim Ratcliffe’s Ineos Grenadiers, those
sources said.  
    The sources for this story, speaking on condition of
anonymity, cautioned a deal may not be sealed and talks are
ongoing. 
    EY and Ineos Grenadiers declined to comment. Representatives
for SRJ did not respond to requests for comment. 
    "This idea is being explored, as many more ideas are being
explored to come up with a sustainable business model for
cycling in the future," Visma-Lease a Bike told Reuters.
    The talks do not involve Amaury Sports Organisation (ASO),
which controls the Tour de France and La Vuelta, or RCS Sports,
which controls the Giro d'Italia, and it's unclear whether
either might join in future, the person added. 
    Representatives for RCS Sports, its parent company RCS Media
Group  RCSM.MI , and ASO did not respond to requests for comment
    Attempts to create a new cycling league have been explored
in the past, including in 2012 when eight teams founded a
project called World Series Cycling (WSC), though the plans
failed to materialise.
    SRJ was established in August by PIF in a bid to "accelerate
the growth of the sports sector" in Saudi Arabia and the Middle
East and North Africa.  
    It acquires and creates new sports events intellectual
property, commercial rights of popular sports competitions and
host major global events in Saudi Arabia, according to SRJ's
website. 
    It took a stake in the Professional Fighters League, to help
it recruit top mixed martial arts fighters worldwide, and became
an investor in a new regional league PFL MENA, SRJ said in
August. 
    ($1 = 0.9235 euros)

 (Reporting by Amy-Jo Crowley and Anousha Sakoui in London
Additional reporting Julien Pretot in Paris and Elvira Pollina
in Milan.
Editing by Louise Heavens and Mark Potter)
 ((Amy-Jo.Crowley@thomsonreuters.com;))