Analysing Saudi Arabia’s growing influence in motorsport

Ahead of this weekend’s Saudi Arabian Grand Prix, the BlackBook speaks to Martin Whitaker, chief executive of the Saudi Motorsport Company, and considers the wider impact of the country’s ongoing efforts to increase its presence in motorsport.

This weekend, Saudi Arabia will host its third Formula One race in the span of a little more than 15 months.

The race debuted as the penultimate round of a tumultuous 2021 season, with title contenders Max Verstappen and Lewis Hamilton eventually leaving the Jeddah Corniche Circuit level on points.

The narrative of that nail-biting title battle somewhat overshadowed Saudi Arabia becoming the host of a Formula One race for the first time. Like most circuit deals, the Gulf state’s agreement with Formula One is not public, but the ten-year contract is reportedly worth US$650 million.

As part of this contract, Jeddah is set to host Formula One until at least 2026, when the race is expected to move to a more permanent, purpose-built motorsport complex in Qiddiya, just outside of Riyadh.

“The fact of the matter is that Qiddiya is still very much part of the plan,” explains Martin Whitaker, chief executive of the Saudi Motorsport Company (SMC), which is responsible for hosting and promoting all motorsport events held in the kingdom. “But, they have not started any construction work yet so Jeddah has effectively stepped up to become a more permanent venue.”

Staging a Formula One race brings significant global awareness for Saudi Arabia, but joining the calendar was merely the latest in a series of moves that have deepened the Gulf state’s involvement in motorsport more broadly.

Long-term ambitions

The SMC was set up in 2021 by the Saudi Automobile and Motorcycle Federation (SAMF), which is chaired by Prince Khalid Bin Sultan Al Abdullah Al-Faisal, to bring all motorsport events held in Saudi Arabia under a single commercial entity.

The country has featured on the Formula E calendar since 2018, has hosted the historic Dakar Rally since 2020, and has kicked off the Extreme E season since 2021. Last year, the SMC signed a memorandum of understanding (MoU) with Dorna Sports geared towards hosting a future MotoGP race in Saudi Arabia, while the World Rally Championship (WRC) also has a keen interest in racing in the kingdom.

All of this forms part of the Saudi Vision 2030 framework, which aims to move away from the country’s dependency on oil, diversify its economy and develop its public sectors, among many other ambitious long-term goals. Sport has so far played a big part in that, with the kingdom steadily growing its event portfolio in recent years to include major soccer matches, heavyweight boxing bouts and golf.

But when it comes to motorsport specifically, the hope is to host international events and to train local champions in the sport.

“I think the most interesting thing is that we’re seeing this as an opportunity to engage with a lot of young people,” explains Whitaker. “We are using it as an opportunity to develop career paths for young Saudis.”

Reema Juffali is the country's first female racing driver and, in November 2019, became the first woman to compete in a race in Saudi Arabia

In the future, the country is seeking to build its own circuit racing programmes, culminating in a motorsport hub in Jeddah that will house academies for local talent. The SMC is also engaging with university students, particularly through an agreement with the University of Business and Technology (UBT) in Jeddah, which has seen engineering, technical and media students become involved in motorsport activity.

“It’s not about just finding young Saudi competitors for the future or young Saudi champions, whether it’s two wheels or four wheels,” Whitaker adds. “It’s about giving the opportunity to young people who want to be involved in the sport.

“My interests are in increasing the participation of young people and their potential career paths in the future. It’s not whether they’re going to become a Formula One driver in the future, [but] if that then in turn leads them to having a job in motorsport or any sport, then that has to be a good thing as well.”

The SMC now has around 150 employees, with the majority of those being young Saudis. Whitaker also claims that around 40 per cent of the workforce is female, in line with another focus of Vision 2030, which is to afford more opportunities to women in a country where women’s rights have historically been severely restricted.

Still, it is Saudi Arabia’s broader human rights record that has led to questions over whether the country genuinely wants to leverage motorsport as a vehicle for change, or if it is simply a platform being used by the kingdom to ‘sportswash’ its image.

Appearing at every turn

As well as hosting an increasing number of events, another way that Saudi Arabia has been increasing its presence in motorsport is through sponsorship.

The Saudi government has a 95 per cent share in oil company Aramco, whose global partnership with Formula One is worth UK£378 million over ten years, according to Motor Sport Magazine. When combined with race fees, that reportedly puts Saudi Arabia among the biggest contributors to Formula One’s finances.

Aramco is also one of the title partners for the Aston Martin team, which this week deepened its ties with Saudi Arabia by announcing a global sponsorship deal with Saudia, the country’s national flag carrier.

Elsewhere, Extreme E has a partnership with Enowa, the energy, water and hydrogen subsidiary of Neom, a city being constructed in the Saudi Arabian desert which is also the title sponsor of McLaren’s electric racing teams. Formula E, meanwhile, holds a principal partnership with Sabic, a chemical manufacturing company owned by Aramco.

While these partnerships bring in valuable revenue for the teams and series involved, Aramco is one of several oil companies which have been accused of using their sports partnerships to ‘greenwash’ their environmental impact.

Aramco, which last week reported a record net income of US$161 billion for 2022, the largest annual profit ever recorded by an oil and gas company, is the biggest contributor to global greenhouse gas emissions since 1965, with environmentalists estimating it to be responsible for around four per cent of the total damage. In addition, Saudi Arabia promised to increase oil production only last year, despite the aim to become less reliant on oil laid out in its Vision 2030 framework.

These issues are particularly pertinent for Formula One, whose alliance with Aramco is also focused on introducing 100 per cent sustainable fuels by 2026. But if those efforts are being funded directly by such a historically environmentally damaging source, then how closely does that really align with the series’ sustainability goals?

In an interview with the BlackBook last year, Julia Pallé, Formula E’s sustainability director, argued that Saudi Arabia “needs to be around the table” because it has “the financial power” to support the series in the fight against climate change.

Speaking now, Whitaker points out that there are plenty of other fossil fuel companies involved in Formula One working towards similar targets.

“You can be pretty certain that they are all looking at how they can maximise the opportunity of changing the environmental issues that we all face from a global perspective through the implementation of sustainable synthetic fuels,” he adds. “I know for a fact that Aramco is very keen on using Formula One as a platform to develop those fuels.”

What happens next?

Back on the track, Formula One will be hoping that this weekend doesn’t see a repeat of the events from its second visit to the high-speed street circuit in Jeddah, which offered a stark reminder that the sport has a responsibility to consider its partnerships and race destinations carefully.

During Friday practice for last season’s race, the cameras occasionally picked up billowing black smoke obscuring the horizon while cars circled the track. A missile strike had been carried out on an Aramco-owned oil facility by Yemen’s Houthi movement, part of a conflict that has raged since 2015 following Saudi intervention in the Yemeni Civil War.

It was a moment that saw sport and politics collide, drawing attention to Saudi Arabia’s well-documented human rights abuses and its colossal carbon footprint.

Stefano Domenicali, chief executive and president of Formula One, has defended the sport’s close ties with the kingdom, pointing out that hosting a race in the country sees the series play “a very important role in the modernisation” of Saudi Arabia.

This is something that Whitaker agrees with, noting that, with 67 per cent of the Saudi population being under 30, this partnership “is a healthy demonstration of what sport can do for a population”.

Qatar returns to the Formula One calendar following its debut in 2021 on a ten-year contract

More broadly, it’s hard to ignore not just Saudi Arabia’s increasing influence in motorsport, but the Middle East as a whole. Qatar becomes the fourth country in the region to host a race this season, following its initial debut in 2021, and will continue to do so until at least 2032.

Bahrain has a long-term contract until 2036, while both Abu Dhabi and Saudi Arabia have signed deals up to 2030. Whitaker believes that, once the planned track in Qiddiya is constructed, discussions will move towards securing Saudi Arabia’s future on the calendar for even longer.

After all, Saudi Arabia appears to be pushing the hardest with Formula One. If reports are to be believed, the country’s Public Investment Fund (PIF) valued the series at more than US$20 billion in exploratory talks with Liberty Media, but discussions faltered in the early stages due to the American media company’s stance on selling the property.

It’s one thing to have a company with state connections being a major sponsor of the sport, but a state-linked investment fund controlling the commercial interests of the series would be unprecedented. Still, that scenario is unlikely to come to fruition any time soon with Formula One going from strength to strength under Liberty Media’s stewardship.

Shareholders are predominantly happy, so there’s little to no requirement for the current owner to sell. However, Bloomberg estimates the current market value of Formula One to be around US$15.2 billion, which is nearly four times what Liberty paid for the series, so the Americans would be forgiven for being tempted should the PIF return to the table.

Plus, with the PIF estimated to have around US$620 billion in assets under management, it seems the only limit to Saudi Arabia’s pursuit of Formula One could be how interested it genuinely is in a long-term investment.

Want to hear more from the Saudi Motorsport Company? Join us at BlackBook Motorsport Forum on 27th April in London, uniting key stakeholders in the global motorsport for the only dedicated B2B industry event. Click here to find out more and book your seat in the room today.


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