Saudi Arabia's Public Investment Fund (PIF) are on the verge of taking another major step in their acquisition of sport, but this time in the virtual world. The PIF, an arm of the Saudi royal family, has joined forces with US President Donald Trump's son-in-law, Jared Kushner, and US investment firm Silver Lake to buy video game company Electronic Arts (EA) for $55 billion (€47 billion), subject to final approval.

This will make it the largest private equity-funded buyout in history and a significant amount of the purchase price is made up of borrowed money. The PIF had previously owned about 10% of EA. EA makes a host of successful games, with sports titles like EA FC (previously FIFA) and Madden NFL, key to its commercial success. 

The size of this deal dwarfs other PIF investment in sports, such as LIV Golf or the purchase of Premier League team Newcastle United. As with those ventures, and similar cultural asset purchases, economic diversification is a key aim for the Saudis and their Vision 2030 project, led by Prime Minister Mohammed bin Salman.

The Gulf state currently relies on oil and gas for approximately half of government revenue, depending on energy prices. As the world attempts slowly to move away from fossil fuels, the motivation to diversify the economy is clear, as is the push towards sports and entertainment, which also offers a sheen to the country's global reputation.

Saudi has eSports strategy and domestic concerns

"PIF is uniquely positioned in the global gaming and eSports sectors, building and supporting ecosystems that connect fans, developers, and IP creators," said Turqi Alnowaiser, deputy governor and head of international ínvestments at PIF.

Simon Chadwick, professor of Eurasian sport industry at Emlyon Business School in France, said Saudi Arabia is indeed one of "few countries in the world that has a national eSports strategy" but said there is another motivation.

"There's something domestic and social there too. Saudi Arabia has a population in which 70% is under 35 years old. And this is a population born and brought up on console games and Super Mario. In fact, Mohammed bin Salman has talked himself of being a Super Mario fan when he was a kid," he told DW.

"It's catering to the domestic population. And that is particularly significant because it addresses some security concerns. Mohammed bin Salman himself has talked about the decades that Saudi Arabia has lost to radicalization.

"So I think the provision of not just games and competitions and sports, but also the employment opportunities that they bring is one way of addressing radicalization. To an extent linked to that is the fear of Arab uprisings like those we've seen in Morocco. This is something that the royal family in Saudi Arabia absolutely does not want. It doesn't want its position challenged. So it is a little like bread and circuses. It's about giving people what they want."

The protests in Morocco mostly involve young people and are concerned with the poor state of public services. One of the primary frustrations from protesters is that the North African nation is building stadiums in preparation for co-hosting the 2030 football men's World Cup with Spain and Portugal, while neglecting public health and education crises.

Big events lend legitimacy but do they hide truth?

The next men's World Cup after that will be in Saudi Arabia in 2034 while the eSports World Cup was in the country earlier this year and they will host the first eSports Olympics in conjunction with the International Olympic Committee, in 2027.

"If you can demonstrate to the world that you are staging events that are trouble-free, very appealing and popular across the world, drawing large numbers of people, suddenly you have a legitimacy in the world and that gives you a voice that historically you may not have had before," added Chadwick.

Claims of sportswashing, using sporting events to "whitewash the country's abysmal human rights record" in the words of Human Rights Watch, have been constant and brushed off by bin Salman and others in the regime.

However, Joey Shea thinks the latest purchase fits the pattern of distraction. In that buying a game or a football shirt or ticket to a golf event don't appear to the untrained eye to be political purchases.

"These investments are being used to deflect attention from a human rights crisis," Shea, a researcher for HRW on Saudi Arabia, told DW.

"Our concerns about human rights are with the Saudi government and how they are wielding their investments as a tool of soft power and influence abroad.

"I have the utmost faith that your average fan does not want to, by default, support a brutal, abusive government abroad just by virtue of being a fan of a particular sport," she added.

"The tragedy in the sportswashing campaigns is that the average fans' love for the game is leveraged in service of these abusive aims."

Kushner and Trump strengthen Saudi links

Bin Salman said in 2023 that "if sportwashing is going to increase my GDP by way of 1%, then I will continue doing sportwashing." 

And Chadwick pointed out that "Saudi Arabia is trying to buy influence, but it's just playing the game that everybody else is playing as well."

The presence of Kushner's Affinity Partners as one of the parties in the consortium is another aspect of the buyout with significant political undertones. Kushner, who has previously served as a senior adviser to Trump, developed close relations with bin Salman when in office and has cultivated them since.

His father-in-law, meanwhile, makes money from the Saudis through their LIV Golf venture, with the breakaway tour playing on his courses even when the established PGA Tour pulled away following the January 6 siege of the Capitol by Trump supporters in 2021.

The Trump Organization, which encompasses the president's business interests, this week also signed a deal to build a $1 billion development known as Trump Plaza in the Saudi city of Jeddah, further cementing the ties between Saudi Arabia and the US administration.

Additional reporting by Ronit Borpujari

Edited by: Chuck Penfold