Four weeks ago, the ATP and SURJ Sports Investment – a PIF subsidiary – announced the launch of an all-new Masters 1000 tournament, to be hosted in Saudi Arabia “as early as 2028”.
It is the latest in a series of strategic moves made by the PIF, through SURJ, to widen its global sports portfolio and fulfil its mandate to be a catalyst for sport in Saudi Arabia, driving long-term growth in the sector.
The National spoke to SURJ Sports Investment CEO Danny Townsend about the recent Masters 1000 announcement, the company’s overall strategy, and the challenges that come with working to transform the sports ecosystem in Saudi Arabia.
Q: The PIF has made several moves in tennis before this one, through partnership deals with both tours and sponsoring the WTA Finals and the Next Gen ATP Finals. What made you choose to host a Masters 1000 in Saudi Arabia and what made you believe it was a good investment?
A: When you're investing in sports IP [intellectual property], you want to invest in assets that have had a history of growth. When you look at the Masters 1000 licenses over time, they've continued to grow in enterprise value. So first and foremost, as an investment, the return profile was clear that if we could secure one, it would be a good investment.
Secondly, when you look at our mandate at SURJ more broadly and how we use our investment assets to drive sustainable growth in the sports sector, having an owned tennis tournament as opposed to a rented one would enable us to do a couple of things.
One, it would enable us to invest in infrastructure that could host tennis tournaments in perpetuity, which you really can't do when you rent an asset.
And two, it allows you to build a tennis economy around an asset that you also own in perpetuity, whether that be development pathways, coaching pathways, elite development, various other things.
Tennis has an 11-month season that hops from one city to another, yet it doesn’t seem to fully benefit from its global appeal, and it leaves a lot of money on the table. In what ways do you feel tennis can maximise more on its opportunities?
Tennis just has significant foundational strength. It's got a rich history, it's played in all the major economies around the world, it's a sport that's relatively easy to understand what's going on.
The fundamental principle that needs to be addressed is the premium level of the sport and how that is packaged up for a modern-day consumer. But we look at that as an opportunity.
Where the sport is today is in a very strong position, but we do believe there are changes that could be made that would further enhance its attractiveness to the modern-day sports fan, which, at the moment, I think is up for grabs.
Tennis is probably well-positioned to do that if it manages that challenge the right way. We certainly want to be able to be influential in that from the inside.
Now being a shareholder in the ATP and obviously engaged with the WTA through the Finals, how do we use our involvement in the sport from the inside to affect positive change on the outside? We certainly think we can be helpful in that process.
The premium product is something that every stakeholder in tennis is talking about. But one of the things holding tennis back is the fragmentation of its governance structure, with seven different governing bodies involved in the sport. How difficult do you think forming this premium product could be, given how divided tennis is?
It's interesting. We've spent the last two years dealing with every stakeholder in the sport, whether it be the ATP, the WTA, the ITF, the Grand Slams, each of them individually. And they all know what the consumer wants.
When you talk to them all separately and independently of each other, they all recognise what the endgame looks like. I think the challenge is how you get to that endgame, both from a governance perspective but also from a product control perspective. It's not that simple.
Take the Masters 1000s. You've got different men's and women's 1000s. You've got different men's and women's 500s. So the calendar is difficult to rationalise. You've got stakeholders that have invested in 1000s and 500s and 250s that want to preserve the asset they've invested in. So I totally respect that they need to be managed through.
So it's not simple. I think we all know where we've got to get to. The challenge is how we navigate our way to that outcome. And we shouldn't take too long to do that because we've only got a limited amount of time to really engage this younger consumer base with a compelling product that is ‘the best v the best’.
Have you spoken to the tournaments in Qatar and Dubai? They've been around for over 30 years. The Saudi Masters 1000 could have a ripple effect on them, whether positively or negatively.
We speak to the various stakeholders across those tournaments regularly on a multitude of different sport investments that we all make. We're well in tune to them all. What we are trying to do more broadly is work together as a Gulf region to collectively drive our influence over the global sporting landscape.
This swing, if we can make it work, which I'm sure we can, a Gulf swing through the month of February/March would be fantastic. To have all the best men's and women's tennis players camped out in our part of the world for four to five weeks, I think it would be fantastic for tennis in the region
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When it comes to women's tennis, how do you feel the WTA Finals have been received so far? I know PIF is a presenting partner. You also have a partnership with the WTA Tour. How do you feel it's gone so far?
It's been a fantastic addition to the sporting calendar in Saudi Arabia. To have the best women's tennis talent in the world here to inspire young Saudi female and male tennis players is important.
Part of the reason why we are collectively investing in sport, whether that be through owned assets or rented assets, is to inspire the youth of the kingdom to want to pick up a tennis racquet and learn to play tennis.
It's very hard to change anyone's behaviour without some sort of inflection point or inspiration that will force them to change behaviour. There's no better way to do that than bring the world's best talent to showcase what great looks like in that sport.
We've certainly seen the impact of the WTA Finals in female tennis participation, particularly at a young level. That's only going to accelerate as our commitment to tennis stays the test of time.
Do you think the WTA Finals should stay longer than three years in Saudi Arabia?
We are committed to a long-term commitment to tennis. And I don't talk about tennis as male or female. It's just tennis. We talk about sport, at least from a SURJ/PIF perspective, as gender agnostic. We are committed to growing sport. When we say that, we mean we grow it for men and women.
Ultimately, for us, having men's and women's elite tennis in the kingdom in perpetuity is an important thing for us.
Looking ahead, what are the priorities when it comes to sports investment for SURJ?
We're continuing to align with the national sports strategy and the Ministry of Sports' focus, where we want to ensure that we're shifting a little bit away from renting sports rights to owning those.
When you rent them, you are at the mercy of the rights owner who could one day move those rights to another market. So owning those assets gives us a lot more control over the infrastructure we build around that asset, the facilities and development pathways and what have you that you can really lock into when you own an asset.
So we're looking to own as many assets as we can, bring those assets to life in the kingdom, build or create that inspiration point that will drive young Saudis to participate in that sport.
Our focus is continuing to look at sports that we can make a difference in and ensure that our capital is put to work in a transformative way, that we'll see that sport thrive and thrive globally, but also importantly for us, really thrive locally.
What are some of the biggest lessons from the past two years since SURJ was created?
What we're learning as a nation is that it's not simple to put on world-class global sports events. And in a very short space of time, we've learnt a lot around what it takes to do that.
And I think we've proven to the world that we are capable of delivering those things. Hence why we've been entrusted with things like the AFC Asian Cup, the Asian Games, and ultimately the 2034 Fifa World Cup. So I think there is a level of respect and trust that Saudi Arabia can put on a world-class sporting event.
We've demonstrated to the rest of the sporting world that we are genuine and authentic in our strategy around how we want to be transformative and helpful to growing and contributing to the global sporting landscape, while focusing on also developing our domestic sporting economy
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And we're excited about the role we're going to play in that. And I think we can all be very proud of what we've achieved so far, but there's still a huge amount to do.
Shifting cultural and social attitudes towards sport takes time. Is it challenging to balance investing at such a fast pace versus the actual time it takes to effect that cultural change in sports across the kingdom?
You've got to be patient. The change we're trying to make is generational. You don't flick a switch and suddenly move from a nascent sports economy to a mature and developed one. That takes decades.
But our ambition collectively ... is about how do we accelerate that at a rate faster than anyone else has ever done before? Because we've been able to watch and learn from others and deploy those learning in a way that's going to accelerate our progress.
But we're not naive to think that you just suddenly spend a bunch of money on bringing major sports events and then all of a sudden you have an immediate unilateral impact on social change. It takes time, it takes effort and energy ... everyone's focused on leaning in and doing their bit to accelerate that.
But we're all also realistic and we know that it's going to take a sustained, authentic commitment over a long period of time. This is not a flash in the pan.
