Saudi Arabia spends hundreds of billions to host the 2034 World Cup. What’s the plan behind it?

The FIFA Congress voted on December 11, 2024, and Saudi Arabia became the exclusive host of the 2034 World Cup. Saudi Arabia's bid budget is as high as US$200 billion, eight times the cost of the United States, Canada and Mexico in 2026. It is another sky-high plan for oil-rich countries after Qatar spent US$220 billion to host the World Cup in 2022.

The first reaction from the outside world was that Saudi Arabia once again used petrodollars to buy sports influence. But digging deeper will reveal that Saudi Arabia’s abacus is smarter than imagined. The 2034 World Cup is just a part of Saudi Arabia’s 2030 Vision Plan. Behind it is a big game to transform the image of the entire country.

What is Saudi Vision 2030?

Saudi Crown Prince Mohammed bin Salman MBS proposed the Saudi Vision 2030 in 2016, with the core goal of weaning the Saudi economy away from oil dependence. Saudi Arabia's oil revenue accounts for more than 70% of its GDP. This single economic structure is extremely vulnerable to oil price fluctuations.

The key strategy of the vision is to turn Saudi Arabia into a global center for entertainment, sports, and tourism. The World Cup is just one piece of the puzzle. Others include NEOM Future City (investment of US$500 billion), F1 Saudi Grand Prix, LIV Golf, the right to host the Champions League final, etc.

What is Saudi Arabia doing with the World Cup?

The first is to transform the country’s image. Saudi Arabia has long been labeled by the outside world as a petroleum country, a conservative country, and a country with poor human rights. The World Cup allows fans in 220 countries around the world to see footage of Saudi Arabia every day for 30 days. The value of this exposure cannot be measured in money.

The second is to attract foreign investment. It is expected that 2 million tourists will visit Saudi Arabia during the World Cup, and they will become a potential diversion for Saudi investment. MBS's goal is to increase the number of annual tourists to Saudi Arabia from 15 million to 150 million in 2030, with the World Cup being a key catalyst.

The third is domestic public opinion. Young people in Saudi Arabia account for 60% of the population, and their enthusiasm for football far exceeds that of their elders. Hosting the World Cup for young people can consolidate the legitimacy of MBS's domestic rule, which is the most direct benefit at the political level.

Sky-high price project for 11 stadiums

Saudi Arabia has promised to build 11 new stadiums for the 2034 World Cup, located in 5 cities including Riyadh, Jeddah, and New Neom Future City. The most luxurious one is the King Salman Stadium in Riyadh with a capacity of 92,000 people and a single stadium investment of US$5 billion.

What's even more exaggerated is that the New Neom Stadium is located on a 350-meter-high cliff, 350 meters above the desert floor, and is built on a glass rooftop on the edge of the cliff. With a construction budget of US$7 billion, this stadium is the most expensive single building in the history of the World Cup.

Saudi opposition

Amnesty International, Human Rights Watch and many other international NGOs oppose Saudi Arabia hosting the World Cup. The reasons include Saudi Arabia’s legal restrictions on women, suppression of LGBTQ, exploitation of foreign workers, Khashoggi incident and other historical issues.

The construction of the 2034 World Cup is expected to require 1 million foreign workers, mainly from South and Southeast Asia. The 2022 World Cup in Qatar caused international shock due to the death of 6,500 workers. Larger-scale projects in Saudi Arabia have made the issue of labor rights a hanging sword. FIFA recently asked Saudi Arabia to sign a labor protection commitment, but its execution is questionable.

Warm-up of Saudi Professional League

Ronaldo's joining Saudi Arabia's Riyadh Victory Club in 2023 is a symbol of the rise of the Saudi league. Afterwards, the Saudi League successively signed first-tier European stars such as Benzema, Neymar, Mane, Kante, Gabi, Militao, etc., with the total signing fee in a single season exceeding US$2 billion.

Behind this lavish spending is the national strategy of the Saudi Public Investment Fund PIF. PIF directly controls the four major Saudi league clubs, making them benchmarks for European giants. Saudi Arabia hopes that the Saudi league will become the top five leagues in the world before the 2034 World Cup.

Copying the Qatar model

Saudi Arabia's overall idea for hosting the World Cup completely replicates the 2022 Qatar model. Qatar spent US$220 billion to host a World Cup, and the national brand value is estimated to have increased by more than US$40 billion. Qatar has changed from a small country on the map to a country known around the world, and the tourism and aviation industries have benefited from this.

Saudi Arabia wants to be a bigger version of Qatar. Saudi Arabia’s land area is 180 times that of Qatar, its population is 14 times that of Qatar, and its available resources far exceed those of Qatar. If Qatar is successful, Saudi Arabia will only be more successful.

What to do if oil prices fall

The biggest risk for Saudi Arabia hosting the World Cup is falling oil prices. 70% of Saudi Arabia's fiscal revenue comes from oil. When oil prices fell below $60, Saudi Arabia began to lose money. With oil prices stabilizing between US$75 and US$85 in 2024, Saudi Arabia will have fiscal surplus. But if oil prices remain low in the next 10 years, Saudi Arabia's funding for hosting the World Cup in 2034 will be a problem.

MBS's response is to speed up its transition away from oil dependence. Saudi Arabia is investing heavily in hydrogen energy, solar energy, AI, and electric vehicles, and hopes that non-oil revenue will account for more than 50% of GDP in 2030. This is a strategy that complements the World Cup.

The rise of football in the Middle East

With Saudi Arabia hosting the World Cup, Qatar having already hosted the World Cup, and the United Arab Emirates hosting the Asian Cup, the Middle East has gradually become the new center of football. The Saudi League, Qatar League, and United Arab Emirates League are all spending heavily on signing European stars. The bonuses, transfer fees, and wages of Middle Eastern clubs are 2 to 3 times that of European clubs.

This gold-dollar route has aroused vigilance in European football circles. Real Madrid, Barcelona, ​​and Manchester United began to worry about the flow of European football resources to the Middle East in the future. FIFA and UEFA have recently discussed whether to restrict the financial operations of Middle Eastern clubs, but the actual effect is limited.

What to watch in 2034

The 2034 World Cup will be held in the desert for the first time, with the highest temperature possibly reaching 50 degrees. Saudi Arabia promises that all stadiums will be equipped with air conditioners to maintain the temperature at 24 degrees. The luxury, air-conditioned stadium consumes as much energy per game as a small city uses in a day.

The World Cup schedule is expected to be from November to December 2034, avoiding the hottest months in Saudi Arabia from June to August. This schedule will once again disrupt the rhythm of the European clubs' season, and the clubs are already protesting with FIFA.

Saudi Arabia’s real bet

Saudi Arabia's hosting of the 2034 World Cup is not just for the success of one tournament, but also a bet on the development direction of a country in the next 50 years. If Saudi Arabia can give the world the impression that Saudi Arabia has modernized in 2034, foreign investment will continue to pour in. If Saudi Arabia fails or a serious human rights scandal breaks out, the investment of hundreds of billions of dollars will become a huge joke.

MBS bet on Saudi Arabia's national credibility and its own political future. The World Cup is just a pawn in this gamble, and the outcome after all the pawns are placed can only be seen after the final whistle blows in December 2034.