A sports investor company owned by Saudi Arabia’s Public Investment Fund (PIF) has emerged as a frontrunner to back the new One Cycling reform project that hopes to revolutionise professional cycling, according to a report by the Reuters news agency and sources contacted by Cyclingnews.
Reuters suggested that SRJ Sports Investments has begun exclusive negotiations about a potential investment of around €250 million ($270 million) after a bidding process run by consulting firm EY on behalf of a select group of leading teams.
However, one source told Cyclingnews that only eight teams appear ready to become shareholders in the final project, with other leading teams not happy with the terms of the possible deal, including a risk of having to pay back funds if the project fails to generate significant new revenue.
SRJ Sports Investments, with the company suggesting SRJ should be pronounced ‘surge’, was created last year to “invest in acquiring and creating new sports events IP (Intellectual Property), commercial rights of popular and prominent sports competitions and hosting major global events in Saudi Arabia.
“These investments are expected to deliver financial returns and localise partnerships domestically and in the MENA (Middle East and North Africa) region.
It is not clear what SRJ Sports Investments would secure for its $270 million investment.
In similar deals, other sports have given up an equity stake in a new private company created to run a major sports competition, while others have agreed to share television rights income for 20 years.
The teams involved in the One Cycling project have few assets or revenue streams outside their team sponsorship, which is mostly spent on rider salaries. In theory, the new project would try to generate new revenues and perhaps increase the monetization of cycling fans.
The AlUla region of Saudi Arabia sponsors the Jayco AlUla team and has created the AlUla Tour with Tour de France organiser ASO but if the deal between SRJ Sports Investments and the One Cycling owners is successful, it would be a significant step-up in the involvement of Saudi Arabian funds in professional cycling.
Sports is one of the pillars of the Saudi Arabian government’s Vision 2030 economic diversification plan as the gulf nation moves away from traditional oil revenues. Critics have called the strategy a form of sports washing as Saudi Arabia looks to gloss over its human rights record.
Saudi Arabia’s Public Investment…
Click Here to Read the Full Original Article at CyclingNews RSS Feed…