Are we looking at Saudi Pro League spending, star power all wrong?

It’s been very much the “Summer of Saudi” not just when it comes to football, but to sports in general — from the LIV Golf/PGA merger to the acquisition of a stake in a major U.S. mixed martial arts (MMA) league last month. All summer long, until the Saudi transfer window shut on Sept. 7, we’ve been bombarded with talk of this star or that star “going to Saudi” for an eye-popping transfer fee, huge wages or, usually, both.

I’ve had executives at two different Champions League clubs predicting that the Saudi league would become one of the world’s top three or four domestic competitions very soon. And it’s true that the Saudi Pro League has recorded a net spend of €889 million ($950m) this summer.

This figure is second only to the Premier League‘s €1.29 billion ($1.38bn), and it becomes even gaudier when juxtaposed with the fact that Europe’s three next biggest leagues — Spain‘s LaLiga, Germany‘s Bundesliga and Italy‘s Serie A — all registered a positive net spend, meaning they shifted players for more than they spent to acquire them. Those are just transfer fees, too: Saudi clubs also splurged on huge contracts for free agents, such as Karim Benzema, Roberto Firmino and N’Golo Kanté.

But here’s the thing: maybe, rather than talking about “superstars moving to the Saudi Pro League,” we should really be talking about “superstars moving to the Public Investment Fund (PIF) teams.” Because PIF, one of Saudi’s sovereign wealth funds — and the majority owner of Newcastle United, as well as LIV Golf — owns 75% of the four most popular clubs (Al Nassr, Al Ittihad, Al Ahli and Al Hilal), which it acquired seemingly overnight in early June.

They’re the guys doing the spending and signing the players you’ve heard of: fully 93% percent of that €889m net spend mentioned earlier is the PIF clubs. Of the other 12 clubs, 10 had a net spend of less than €8m and of those 10, four had a net spent of less than €2m while four didn’t have a net spend at all: they actually broke even or made money.

Get beyond the PIF clubs and you’ll probably recognize a couple guys at Al Ettifaq (net spend: €36m/$38.5m, roughly the same as Crystal Palace), like Jordan Henderson, Georginio Wijnaldum or Moussa Dembele, and perhaps at Al Shabab (net spend: €15m/$16m, about two-thirds what Luton Town spent) such as Habib Diallo and Yannick Carrasco.

Beyond that? That depends: how much of a football nerd are you? Former Barcelona youth player Alex Collado, on loan at relegated Elche last season and now on loan at Al Okhdood? Former Milan and Lyon back-up keeper, Ciprian Tatrusanu, who joined Abha? Gambian forward Musa Barrow from Bologna to Al Tawoun? Matthias Normann, who became something of a pariah (and was banned from the Norwegian national team) when he signed on loan for Dinamo Moscow last year, has since joined Al Raed as a free agent?

For all the PIF-funded free spending and hype at the top of the SPL, most of these clubs spent the summer signing the sorts of players they’ve always targeted: guys who could hold their own in the Saudi League (arguably the best in Asia, but probably outside the top 10 in Europe) and didn’t cost very much.

Last summer’s record signing was Gabonese forward Aaron Boupendza, who joined Al Shabab for €7.8m from Qatar‘s Al Arabi and now plays for FC Cincinnati in Major League Soccer. There’s very little in the way of transfer fees — 10 of the 18 clubs didn’t sign anyone for more than €2.8m ($3m) — and a ton of free agents, many of them from outside of Europe’s Big Five leagues or elsewhere in Asia (like Romanian midfielder Nicolae Stanciu, who joined Damac from Chinese champion Wuhan Three Towns). It makes sense given that if you’re not a Saudi national and you spend at least half the year living in the country, you pay zero income tax.

The takeaway here isn’t to mock the rest of the league, but rather to point out that most of these clubs aren’t holding their breath waiting for some kind of trickle-down benefit from the Big Four’s spending. They’re not swayed by PIF’s largesse — not to the point of putting serious money into their squads. It also suggests that either PIF’s plans for the Saudi Pro League don’t extend beyond their four teams — better to have four super clubs than to spread the resources around, maybe? — or they weren’t able to persuade other wealthy entities in Saudi from investing in the league.

Plenty of folks have weighed in as to why PIF chose to invest in football. They’ve mentioned “sportswashing” as a means of distracting from the country’s human rights record. They’ve talked about “soft power” and how sports at its highest level can help garner real-world influence. And they’ve pointed out that it’s a way to diversify an economy still hugely dependent on natural resources like gas and oil, which will run out one day.

Princeton professor Bernard Haykel, who literally wrote the book on the subject, dismissed the first two theories (“I think it’s a crock of you know what”) in a recent podcast appearance. Instead, he suggests it’s about domestic transformation: diversifying an economy that’s not just natural resource dependent, but state-dependent (70% percent of the Saudi working age population is employed by the public sector) by developing other economic activities.

Is football that kind of activity? Saying football in particular (and sports in general) is “big business” has become a cliche, but in terms of gathering eyeballs, it’s no doubt true. Yet can it be a profitable, sustainable business that employs significant amounts of people, particularly when the vast majority of top clubs either lose money or operate at break-even?

Is Saudi Arabia‘s gambit going to pay off? Essentially, what we have right now is four super-charged clubs, all majority owned by the same entity, spending like European heavyweights, two more spending like Big 5 league minnows and the rest pretty much at subsistence. This really shouldn’t be that surprising — for all of Saudi Arabia’s wealth, we’re still talking about the 17th biggest economy in the world (between Indonesia and the Netherlands) with the 23rd highest GDP per capita (more than Finland, less than Bahrain). It’s enough money to make major investments both domestically and around the world; however, it’s not enough to say “jump” and have everyone else ask how high. Not when half of that GDP is dependent on oil and oil prices go up and down.

We have a pretty good idea of what Saudi football would look like without the PIF subsidy because that’s what it was a year ago. Al Nassr — yes, Cristiano Ronaldo‘s club — had unpaid transfer debts to the point that FIFA banned them from registering new players. (PIF took care of that swiftly.) It was the sort of league that averaged just under 10,000 a game, which is roughly the same as Poland, a country whose population and love of football is comparable. (Five games into the season, it’s actually even lower, at 8,795 per game, though that may have to do with the fact that it’s still very hot there.)

Can you turn that into a business of the sort that justifies the massive outlay from PIF?

“You can say it’s insane or stupid or a bad investment, but I think that’s what they’re doing,” Haykel says. “Any state that depends almost entirely on one resource will find it very difficult to diversity away from it. If it can accomplish 20-30% of it, not 100%, that’s already an amazing thing.”

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Perhaps that’s the correct way to think about this: as one of a series of long-shot gambles the country is taking, not just in sports, but in everything from tourism to real estate to tech. Gambles that likely won’t pay off, but will yield huge returns if they do.

It brings to mind an old Statistics 101 problem. You have $10 to bet. Do you bet on getting heads once and winning twice your stake ($20), plus your original $10, or do you bet on getting heads three times in a row and winning 100 times your stake ($1,000), plus your original stake? Math would suggest the latter because, while your chances of winning are lower (1 in 8, rather than 1 in 2) your payout is 50 times as high.

What if the minimum bet was $100,000? Most of us wouldn’t do it, because that is a lot of money to most of us. We’d opt for the safer bet (if we were going to bet at all) because the odds of winning are much higher. The thing is: right now, $100,000 is not a lot of money to PIF, and it’s worth it to them to pursue the higher upside because if it works, they win $10 million. If it doesn’t? Well, they can afford to lose the $100,000.

It feels as if that’s what’s going on. Trying to turn a league into a juggernaut by juicing the four most popular clubs — a contrast, by the way, to what was attempted, unsuccessfully, in China and in the early days of Major League Soccer, when there was a concerted effort to promote parity. It’s a moonshot, a high-risk, high-return endeavour, and the fact that most Saudi clubs haven’t followed PIF’s lead doesn’t exactly bode well. But if you’ve got the excess cash, maybe it’s worth rolling the dice, because the payoff could be massive.