Surj Sports chief: Saudi parent PIF, investing and league focus
Chief executive of Dazn investors Surj Sports Investments Danny Townsend discusses the state of the changing landscape.
When Saudi Arabia’s Public Investment Fund purchased Premier League club Newcastle United in 2021, Middle Eastern sports spending was thrust into the voyeuristic forefront of executive and fan consciousness.
Since then Saudi Arabia has invested in a multitude of sports, both abroad and at home, in a bid to diversify an economy that has for so long relied heavily on oil and petroleum exports.
Whether it be boxing, football, an attempt at cricket or other sports, there’s no getting away from the sporting juggernaut that is the KSA.
A Surj surge in investment
But patience is key at home, Surj Sports Investment chief executive Danny Townsend tells Morning Wire, with long-term partnerships on the shores of the Arabian peninsula as important as PIF’s English outpost on Tyneside.
“We’re a patient investor,” Australian Townsend adds. “We have an authentic long-term commitment to growing the sports sector here [in Saudi].
“We have a long-term commitment to being influential in the global sporting landscape where we can be helpful. And I think we certainly are only interested in investments where we can be helpful.”
Surj earlier this year invested into streaming platform Dazn to the tune of a reported $1bn, while the group – entirely owned by PIF – has reportedly mulled investments in the likes of World Athletics, EuroLeague basketball and other competitions.
The basketball investment comes amid a race between Saudi-backed entities and the NBA to launch a new franchise-based competition outside of North America.
Townsend says a number of new acquisitions are due to be announced in the coming months, adding that their focus will be on “using our capital to be transformative in the sports we’re investing in”.
“We’re very much focused on leagues, tools and series with IP that we can move around and take advantage of their nomadic nature,” he says. “When you can bring an event here, you can build a facility, develop a pipeline of talent; those types of things encourage participation. So it’s very difficult to do that, almost impossible, with a domestic-based franchise in the United States or in Europe.”
Savvy nature
Townsend recognises the savvy nature of the deal with Dazn, which had global broadcast rights to the current Club World Cup taking place across the United States.
The deal itself joins a separate partnership for Surj parent PIF, which has partnered with Fifa in a move set to stabilise a relationship before Saudi Arabia hosts the 2034 World Cup.
“There’re two very different types of investments,” Townsend continues. “When you’re looking at franchise investments, they’re probably more aligned to either a complete buyout of a franchise or in many respects a minority position that some private equity companies are taking in sports teams.
“When you’re talking about leagues, you’re talking about longer term holds, and you’re also talking about more transformational investment, whereby you have to deploy expertise into that investment.
“I think the other dynamic that we’re all facing in sport is a shift in the economics around sport. When you think back to the last 30 years, [sport] has been heavily dominated by linear broadcast media deals and the role they play in the economics of sport, and naturally those, in most cases, are in decline for good reason.
“The ARPU [average revenue per user] of a digital customer on a streaming platform is a lot less than a cable customer. So there is going to need to be a reorientation of the economics around sport and the transition from the analog past to a digital future is something that takes time. It takes sophistication and it takes money.”
Surj is the quiet child of PIF, but it is smartly going about its business, making moves on the global sports front. And the self-described “patient investor” is set to ramp up its profile. They’re certainly a player to watch.