In the days following Donald J. Trump's re-election as president, one of his most notable stops was the Ultimate Fighting Championship event at Madison Square Garden.
Mr. Trump's appearance in the front row, with his closest confidants like Elon Musk sitting next to him, attracted attention. But most of those who participated in the battles could recognize it the other person sits next to the president-elect.
Yasir al-Rumayyan, the governor of Saudi Arabia's giant sovereign wealth fund, the Public Investment Fund, watched the action from ringside and is getting closer to being part of the action. A company owned by the foundation is close to forming a boxing league with Ultimate Fighting Championship owner TKO. A deal for a new competition featuring only up-and-coming boxers affiliated with the league could be announced within weeks, according to three people familiar with the matter.
TKO said in a statement on Wednesday that it had “nothing to announce” but would “evaluate any unique and attractive opportunities that would fit well with our business portfolio and create additional value for our shareholders”.
The Wealth Fund did not comment.
Potential investment in TKO follows a Saudi Arabia's effort In June, to create a multibillion-dollar boxing league that aims to unite the world's best boxers, fighting for titles that have been divided by rival promoters for decades and governed by an alphabet soup of sanctioning bodies. The effort, while not entirely abandoned, has become complicated and expensive, even for a country like Saudi Arabia, which has spent billions over the past half-decade to become a player in some of the world's biggest sports.
Investment in the new league will be made by Sela, a subsidiary of the State Investment Fund. TKO is majority-owned by entertainment and sports conglomerate Endeavor and represented by UFC empresario Dana White. is a longtime friend of Mr. Trump's – will be the managing partner. According to people familiar with the matter, who spoke on condition of anonymity before the official announcement, TKO was offered a share of the stock and a share of the revenue in return.
Saudi Arabia has sponsored some of the biggest and richest boxing fights in recent years. It has hosted major title fights, most recently a face-off between Oleksandr Usyk and Tyson Fury, which ended with Mr. Usyk becoming the first undisputed heavyweight champion in over a generation. Such battles, which have proven nearly impossible to negotiate for years, have come about thanks to millions of dollars put on the table by Turki al-Sheikh, a government official with close ties to the kingdom's Crown Prince Mohammed bin Salman.
A former bodyguard, Mr. al-Sheikh has become perhaps the most powerful man in boxing, appearing ringside and even in the ring in the biggest fights. He also receives frequent messages of appreciation from some of the famous fighters and boxing promoters who refer him. as “Your Excellency.” He forged a partnership with Mr. White, who over the past two decades has built the UFC from a $2 million company to a $10 billion-plus company. Negotiations have been underway in the United States, Europe and Saudi Arabia for more than a year.
There was Mr. Al-Sheikh offered in interviews he said he was planning a new boxing venture. And he has made no secret of his frustration with the way the sport is run, as the best fighters rarely face each other in their prime. In November, he bought the sport's century-old bible, Ring Magazine, and vowed to restore it to glory.
Mr. Al-Sheikh also cooperated with the sanctioning body, the World Boxing Council. Boxing Grand Prixtournament for young boxers.
For TKO, which owns both the UFC and World Wrestling Entertainment, the venture is low-risk given that the Saudis are footing the bill. “If we were in boxing, we would expect to do it organically, not through M&A,” TKO president Mark Shapiro said in November, referring to mergers and acquisitions.
He added: “I mean, we don't write checks.”
If the deal is completed, TKO will earn about $30 million in annual management fees. Saudi Arabia is expected to pay significantly more than other countries to host the league, according to details of the plan reviewed by The New York Times. Two fights there will bring more than 40 million dollars. Other fights are planned for the US and Europe, where hosting fees will be lower.
According to one person familiar with the matter, TKO is talking to other parties, including other Arab nations, about a boxing league.
TKO's parent company, Endeavor, has had a sometimes strained relationship with Saudi Arabia, and this potential partnership suggests it has largely been repaired. Endeavor after the 2019 assassination of Saudi journalist Jamal Khashoggi He returned 400 million dollars Saudi Arabia's sovereign wealth fund invested in the company.
For the Saudis, getting a partner like Mr. White would come at an opportune time. He He joined the Meta board this week and at the last three Republican National Conventions. Mr. Trump regularly hosted UFC events at his property during the organization's early years, and he attended many of the fights. Mr Trump and Mr al-Rumayyan are also close, with the Saudi-owned LIV Golf Championship holding several events at Mr Trump's courses, including one planned for April in Florida.
Saudi officials have described sports and entertainment as key pillars of a strategy known as Vision 2030 as part of efforts to wean their economy off its dependence on oil exports and liberalize society. Critics have described these efforts differently, positioning them as a way of using sports to divert attention from Saudi Arabia's human rights record, a tool known as sportswashing.
What TKO will gain is a partnership with the world's largest sports investor. Saudi Arabia has invested in teams, talent and events across a range of sports and recently secured the rights to the 2034 men's World Cup, the most watched event on the planet.
The UFC's U.S. media rights deal with ESPN expires this year, as does the network's contract with Top Rank, the network's top boxing promoter. TKO may attempt to merge the new boxing league's rights with the UFC's to help solidify the fledgling boxing league.
But applying the UFC playbook to boxing will be very difficult. Boxing is a more heavily regulated sport than mixed martial arts, with the federal Muhammad Ali Act requiring a separation between the role of manager and promoter in boxing and the public listing of purse figures.
Unlike the UFC, the league would not include the most prominent boxers. And they may not think there is a positive side to joining it. While the fractured nature of boxing means its earning potential is not maximized for promoters and managers, top boxers earn more than top MMA fighters.
UFC in October settled an antitrust lawsuit was sued for $375 million by ex-fighters who claimed the company illegally deposited the fighters' salaries. Documents submitted as evidence in that lawsuit showed that the UFC paid its fighters less than 20 percent of its earnings.
In boxing, the numbers are reversed, with fighters combined earning more than 50 percent of the revenue from any fight.