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One vehicle created by Saudi Arabia’s sovereign wealth fund is the country’s first foray into mixed martial arts by investing $100 million in the US professional martial arts league and hosting regional championships.

The minority stake purchase is SRJ Sports Investments’ first deal since Saudi Arabia’s $650 billion Public Investment Fund established the vehicle earlier this year, the people said.

The deal marks PIF’s first major foray into mixed martial arts, following investments in football and golf. Under the agreement, the PFL will establish a MENA league by the second quarter of 2024, people familiar with the matter said. The joint venture will be headquartered in Saudi Arabia.

The PIF bought English football club Newcastle United in 2021, while teams in the Saudi Arabian Football League have spent nearly $1 billion this year to recruit stars such as Cristiano Ronaldo. In golf, PIF signed a partnership agreement between the US PGA Tour and its LIV Golf Championship in June, but faced opposition from US lawmakers.

Critics have called the campaign a “campaign purge” aimed at deflecting criticism of Saudi Arabia’s human rights record. But Saudi officials insist it is an important part of a plan to diversify the economy away from oil revenues while attracting tourism and investment.

In terms of combat sports, Saudi Arabia already hosts high-profile boxing events. The country will host a bout in October between heavyweight champion Tyson Fury and mixed martial arts artist Francis Naganu.

However, the stake in the PFL, founded by entrepreneur Donn Davis in 2017, marks a shift towards hosting the league, sources said. The PFL’s Middle East League will be one of six regional leagues where martial artists compete during the season before competing in a global championship.

The move will challenge the neighboring UAE, which has long been a patron of combat sports in the region. Saudi Arabia is vying with the UAE to become the region’s financial hub.

The UAE previously held a stake in leading mixed martial arts organization Ultimate Fighting Championships and regularly hosts such events. It also has its own UAE Warriors League.

Its supporters hope that the PFL’s independent league will dominate the sport in the region. The PFL pays up to $1 million in prize money and has signed Olympic champions such as American judo gold medalist Keira Harrison. The company aims to replicate the practice in the Middle East, a person familiar with the matter said.

Saudi Arabia will also partner with the PFL to host the PFL PPV Superfights, pay-per-view fights with fighters including Ngannou and influencer and boxer Jake Paul.

The PFL stake follows the kingdom’s previous template for investing in industries it wants to expand. PIF has been looking to take stakes in new companies, such as electric car maker Lucid or video game publisher Scopely, which it acquired earlier this year for $5 billion.

The PFL is the second most popular league in mixed martial arts in terms of viewership, behind the UFC, the PFL said. Its investors include Waverley Capital, Washington Wizards owner Ted Leonsis and Ares Capital.

Additional reporting by Samuel Agini in London

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