Overview
As sports franchise valuations continue to rise and professional sports leagues seek new markets and long-term financing sources, sports are increasingly being viewed not only as entertainment, but also as a sophisticated global investment vehicle. Sovereign wealth funds (SWFs)—government-owned investment vehicles typically funded through foreign exchange reserves or commodity revenues—have historically invested in sectors such as infrastructure, healthcare, renewable energy, artificial intelligence, and fintech.[1] More recently, however, several SWFs sponsored by countries in the Middle East have expanded into professional sports through investments in teams, leagues, tournaments, and multi-franchise ownership structures.
This influx of foreign institutional capital presents meaningful opportunities for leagues and franchise owners, including access to long-term financing, infrastructure investment, and global commercial partnerships. At the same time, investments involving state-backed entities—as opposed to traditional private equity investment—can raise complex issues concerning governance, reputation, anti-money laundering (AML), sanctions, and national security.
Saudi Arabia's investment in LIV Golf, a men's professional tour, provides perhaps the clearest example of both the opportunities and risks associated with sovereign-backed investment in professional sports. Backed by the Kingdom of Saudi Arabia's (KSA) Public Investment Fund (PIF), LIV Golf demonstrated the ability of sovereign capital to rapidly finance league development, attract elite players through unprecedented levels of compensation, and challenge existing market structures within professional golf.[2] The league also accelerated broader commercial discussions within the sport regarding player compensation, media rights, and global expansion.
At the same time, LIV Golf illustrates the potential downsides of sovereign-backed investment when investors move beyond passive ownership and seek to influence league operations, governance, and competition structure. Despite billions of dollars of investment, the project was an overall financial loss to PIF.[3] Beyond that, the league also generated significant reputational scrutiny regarding KSA's political and human rights record, prompted litigation and commercial conflict with the PGA Tour, and faced ongoing questions regarding long-term financial sustainability, fan engagement, television ratings, and media-rights value.
The tensions accompanying LIV Golf's formation were reflected almost immediately, as golfers who joined LIV Golf initiated a lawsuit against the PGA Tour alleging antitrust violations arising from player suspensions.[4] LIV Golf subsequently joined the action as a plaintiff, and PIF and its governor, Yasir Al‑Rumayyan, were later brought into the case. Nearly a year after the litigation began, and shortly after a court ruling requiring PIF and Al‑Rumayyan to give depositions in New York City rather than in the Kingdom of Saudi Arabia,[5] LIV Golf and the PGA Tour announced in June 2023 plans to form a new commercial entity backed by PIF.[6] The parties voluntarily dismissed their claims against one another, but litigation continued for several more months after The New York Times filed a motion to intervene and unseal court records.[7] Ultimately, the proposed arrangement between LIV Golf and the PGA Tour first described as a "merger" and later reframed as an "agreement," was expected to be finalized by the end of that year but never materialized.[8]
Recent reports that PIF may reduce or ultimately discontinue funding following the 2026 season further underscore the unique business and geopolitical considerations that can accompany state-backed investment in sports ventures.[9]
As professional sports become an increasingly global institutional asset class, leagues and franchise owners must balance the benefits of sovereign investment against the unique legal and reputational risks associated with tapping into international capital markets.
Foreign Capital and the Changing Landscape of Sports Ownership
Historically, sports franchises were often viewed as niche, sentiment-driven assets associated with ‘face of franchise' legacy owners. Today, however, teams are increasingly being repositioned as sophisticated global investment assets capable of generating long-term enterprise value through media rights, sponsorships, real estate development, and international brand expansion. Accordingly, professional sports leagues have increasingly opened their ownership structures to institutional and foreign investment in recent years. Private equity investment initially drove much of this trend, but SWFs have become increasingly active participants in the sports industry.
Several recent transactions illustrate the expanding role of sovereign capital in professional sports. Last year, Abu Dhabi-backed Mubadala Capital, a $330 billion global investor, entered into a reported $10 billion investment alliance with TWG Global,[10] whose portfolio includes interests in prominent sports franchises such as the Los Angeles Dodgers, Los Angeles Lakers, and Los Angeles Sparks.[11] And Qatar's SWF, the Qatar Investment Authority (QIA), has expanded its investment in Monumental Sports & Entertainment, the parent company of the Washington Wizards, Washington Capitals, and Washington Mystics, alongside private equity firm Arctos Partners.[12] Sovereign-backed investment has also expanded beyond direct ownership interests into broader commercial partnerships within the sports industry, including recent agreements between FIFA and KSA's PIF related to the 2026 FIFA World Cup.[13]
As SWFs continue to expand their presence across professional sports, leagues and franchise owners are increasingly tasked with balancing the benefits of institutional capital against the governance, reputational, and regulatory risks associated with state-backed investment.
League-Level Approaches and Business Considerations
Against the backdrop of increased SWF investment in professional sports, leagues have begun to evaluate how to permit certain forms of institutional and foreign investment while maintaining safeguards designed to preserve league governance and operational control.
Since 2022, the NBA and WNBA have permitted SWF investment subject to league approval and review, although such investments are limited to passive, non-controlling interests and generally may not exceed a 20% ownership stake.[14] The NHL [15] and MLB[16] similarly do not have rules prohibiting certain institutional and sovereign investments, subject to league-specific ownership limitations. These restrictions reflect a broader effort by leagues to balance access to institutional capital against concerns regarding governance, competitive integrity, and operational independence.
The distinction between passive investment and operational influence remains particularly significant in light of the LIV Golf experience. While certain leagues have welcomed minority sovereign investment, others may be less comfortable permitting state-backed entities to acquire controlling interests that would allow them to exert influence over league governance, competitive structures, scheduling, media strategy, or player relations. LIV Golf demonstrated how sovereign-backed entities can reshape the competitive landscape of a sport itself, while simultaneously creating heightened scrutiny regarding governance independence and reputational exposure.
LIV Golf also raises broader questions regarding the long-term sustainability of sovereign-backed sports ventures. Although KSA's PIF accelerated LIV Golf's launch and disrupted the professional golf market through unprecedented player compensation and large-scale financial backing, the league struggled on multiple fronts and some believe it is on the verge of folding.[17]
The LIV Golf episode also demonstrated the challenges that may arise when sovereign-backed investors move beyond passive ownership and become directly involved in league formation and competitive strategy. Unlike minority investments in existing franchises or leagues, LIV Golf positioned itself as a direct competitor to established golf institutions, resulting in litigation, governance disputes, player eligibility conflicts, and broader reputational scrutiny surrounding the league's political associations.[18]
More broadly, LIV Golf's trajectory suggests that sovereign capital alone may not be sufficient to guarantee long-term commercial success in professional sports. Fan loyalty, media ecosystem integration, institutional legitimacy, and alignment with existing league structures remain critical components of sustainable sports enterprises. As leagues continue evaluating sovereign investment opportunities, LIV Golf may ultimately serve less as a model for future league creation and more as a cautionary example of the limits of capital-driven disruption in sports governance.
As a result, some leagues and franchise owners may prefer investment structures that provide access to foreign capital while limiting concerns regarding operational influence and governance control. Sponsorship agreements, naming rights transactions, and stadium development or financing arrangements may offer opportunities to attract sovereign-backed investment while helping preserve league autonomy, team decision-making authority, and brand integrity.
Legal and Regulatory Considerations
SWFs present distinct legal and compliance considerations compared to traditional private investment vehicles such as venture capital, hedge funds, and private equity. Unlike private institutional investors, SWFs are government-owned entities that may operate with varying levels of transparency and disclosure obligations depending on the jurisdiction involved.[19]
These characteristics can create heightened regulatory scrutiny in the US, particularly where transactions involve politically exposed persons, sanctions-sensitive jurisdictions, or corruption-related concerns. Sports leagues and franchise owners considering sovereign investment should therefore conduct robust diligence regarding the following:
- Source of funds.
- Ownership and governance structure.
- Sanctions exposure.
- AML compliance procedures.
- Anti-corruption controls.
- Antitrust risk.
- Reputational and geopolitical risk.
Certain risks may be mitigated where SWFs invest indirectly through regulated private equity or investment fund structures that are already subject to AML and compliance obligations. In such cases, intermediary financial institutions and regulated investment vehicles are typically required to maintain compliance programs designed to identify suspicious activity, monitor transactions, and satisfy applicable regulatory obligations.[20]
National security review may also become relevant in certain transactions. Although passive minority investments may be unlikely to trigger significant scrutiny from the Committee on Foreign Investment in the United States (CFIUS), transactions involving governance rights, operational control, or access to sensitive information may receive greater regulatory attention.[21]
As SWF investment in professional sports continues to evolve, Steptoe's Sports Integrity Team remains well-positioned to advise leagues, franchise owners, investors, and other stakeholders on the complex business, regulatory, compliance, and reputational considerations associated with state-backed investment.
[1] Sovereign Wealth Funds, Practical Law Glossary Item No. 9-501-8646. Thomson Reuters (2026).
[2] Vittori, Jodi and Lakshmi Kumar, The Public Investment Fund and Saudi Arabia's Engagement in Global Sport, Sovereign Wealth Funds: Corruption and Other Governance Risks (Ch.6). Carnegie Endowment for Int'l Peace (June 26, 2024) https://carnegieendowment.org/research/2024/06/sovereign-wealth-funds-corruption-illicit-finance-governance-risks#chapter-6-the-public-investment-fund-and-saudi-arabias-engagement-in-global-sport.
[3] Saudi Fund to Back Away From LIV Golf Under Mounting Financial Pressures. N.Y. Times: The Athletic (Apr. 17, 2026) https://www.nytimes.com/athletic/7202925/2026/04/17/saudi-arabia-sports-investment-liv-golf/.
[4] Phil Mickelson, Talor Gooch, Hudson Swafford, Matt Jones, Bryson Dechambeau, Abraham Ancer, Carlos Ortiz, Ian Poulter, Pat Perez, Jason Kokrak and Peter Uihlein, Plaintiffs, v. PGA TOUR, INC., Defendant, 2022 WL 3083626 (N.D. Cal. Aug. 3, 2022).
[5] Jones v. PGA TOUR, Inc., 2023 WL 2838116, at *1 (N.D. Cal. Apr. 6, 2023).
[6] PGA TOUR, DP World Tour and PIF Announce Newly Formed Commercial Entity to Unify Golf. PGA Tour (June 6, 2023) https://www.pgatour.com/article/news/latest/2023/06/06/pga-tour-dp-world-tour-and-pif-announce-newly-formed--commercial-entity-to-unify-golf.
[7] Beall, Joel. Judge Partially Denies Request to Unseal PGA Tour-LIV Golf Documents. Golf Digest (Aug. 25, 2023) https://www.golfdigest.com/story/liv-golf-pga-tour-documents-nyt-2023.
[8] Kelly, Todd. LIV Golf Timeline: Upstart League's History in Battle with PGA Tour. Golfweek (Apr. 15, 2026) https://golfweek.usatoday.com/story/sports/golf/liv/2026/04/15/liv-golf-timelime-upstart-leagues-history-battle-pga-tour/89625187007/.
[9] Miller, Brody. LIV Golf Founder Yasir Al-Rumayyan PIF. NYT: The Athletic (Apr. 29, 2026) https://www.nytimes.com/athletic/7242283/2026/04/29/liv-golf-founder-yasir-al-rumayyan-pif/.
[10] TWG Global & Mubadala Capital to Enter Multi-Billion Dollar Investment Alliance. Business Wire (Apr. 29, 2025) https://www.businesswire.com/news/home/20250429513906/en/TWG-Global-and-Mubadala-Capital-to-Enter-Multi-Billion-Dollar-Investment-Alliance.
[11] Sports, Media & Entertainment. TWG Global, https://www.twgglobal.com/sports-media-and-entertainment/ (last visited May 18, 2026).
[12] Friend, Tom. Laurene Powell Jobs Sells Monumental Stake to Arctos, QIA. Sports Business Journal (Dec. 17, 2025) https://www.sportsbusinessjournal.com/Articles/2025/12/17/report-laurene-powell-jobs-selling-monumental-stake-to-arctos-qia.
[13] PIF Named 2026 World Cup Official Tournament Supporter as Saudi Steps Up Football Ambitions. Reuters (May 14, 2026) https://www.reuters.com/sports/soccer/pif-named-2026-world-cup-official-tournament-supporter-saudi-steps-up-football-2026-05-14/.
[14] Novy-Williams, Eben and Scott Soshnick. Qatari Wealth Fund Buying Into Wizards Parent in $4.05B Deal. NYT: The Athletic (June 22, 2023) https://www.nytimes.com/athletic/4626022/2023/06/22/nba-nhl-qatar-investment-wizards-capitals-mystics/.
[15] Id.
[16] Maese, Rick and Ben Golliver. Qatari Fund Seeks to Buy Minority Stake in Wizards, Capitals and Mystics. Washington Post (June 22, 2023) https://www.washingtonpost.com/sports/2023/06/22/qatar-monumental-sports/.
[17] Pingue, Frank. LIV Golf Seeking $350 Million in Funding After Losing Saudi PIF Backing. Reuters (May 21, 2026) https://sports.yahoo.com/articles/liv-golf-spent-billions-raided-133227396.html.
[18] Ferguson, Doug. Saudi-Backed LIV Golf, PGA Tour File Joint Motion to Dismiss Lawsuits. Associated Press (June 16, 2023) https://apnews.com/article/liv-lawsuits-pga-tour-dismissal-saudi-arabia-fab5777b05c9cbc69eb38c0ab1bdf34a.
[19] Vittori, J. and L. Kumar, supra note 2, Summary.
[20] See, e.g., anti-money laundering program requirements for banks (31 C.F.R. § 1020.210 et seq.); brokers or dealers in securities (31 C.F.R. § 1023.210 et seq.); mutual funds (31 C.F.R. § 1024.210 et seq.); and futures commission merchants and introducing brokers in commodities (31 C.F.R. § 1026.220 et seq.).
[21] See America First Investment Policy, Memorandum from the White House, Sec. 2(h) (Feb. 21, 2025) https://www.whitehouse.gov/presidential-actions/2025/02/america-first-investment-policy/.
