The new Sports Law aims to set clearer ground rules for investing in Saudi sport, commercializing clubs and competitions, and delivering major events, while leaving operating details to be settled through implementing instruments.
Key Regulatory Framework and Licensing Requirements
Saudi Arabia’s new Sports Law (issued under Royal Decree No. (M/121), dated 1 December 2025) (the Law) may best be read as a regulatory reform aimed at strengthening the sector’s investment framework. It consolidates core legal infrastructure, including recognized sports entities, a national registry, licensing and approval mechanisms, governance and liability standards, enforcement and inspection powers, and a dedicated sports arbitration pathway.
The Law formalizes clubs and competitions as regulated economic actors. Clubs and leagues may operate as companies, convert into corporate form, establish subsidiaries, exploit intellectual property, and commercialize competition rights within a supervised licensing regime.
Saudi Arabia introduced the Law as it moves from episodic event hosting to operating a continuous sports economy, creating a need for consistent rules governing event licensing, venue operations, ticketing, and underlying contractual arrangements. It is intended to serve as a common baseline for these activities.
The Law also provides for a transition period: in-scope entities must regularize their status within one year of the Law’s effective date, subject to an extension by the Sports Minister. The Sports Minister will issue the Implementing Regulations (the Regulations) within 180 days of the Law’s publication, and the Law takes effect 180 days after its publication in the Official Gazette, which occurred on 12 December 2025.
New Licensing Processes and Compliance Requirements
1. A Clearer “Sports Entity Stack” and a National Registry
The Law identifies four principal sports entities (the Saudi Olympic and Paralympic Committee, federations, clubs, and leagues) and ties legal personhood to registration in the National Sports Registry for entities established under the Law. The Registry also covers key sector actors, including the arbitration center, the anti-doping body, and operating participants such as sports facilities, academies, institutes, and schools.
For dealmakers, this creates a single reference point for legal capacity, governance status, and, over time, regulated disclosures that counterparties may rely on in diligence and contracting.
2. Approvals and Licenses
The Law applies approvals and licensing to activities that present safety and consumer risk, including:
- Sports events (not sports competitions): Government bodies require Ministry approval to stage events (subject to exceptions), and non-government parties require a Ministry license. The commercial management and operation of sports events and competitions also require a Ministry license.
- Facilities: Construction or modification of sports facilities, as well as their operation or management, require Ministry licensing, subject to exemptions to be set in the Regulations.
- Training and education: Sports centers, institutes, and academies require Ministry licensing; sports schools are licensed in coordination with the Ministry of Education; and technical and training staff must be licensed.
- the foreign ownership cap for sports companies and the minimum capital requirement;
- the approval conditions expected to govern M&A and changes in ownership interests in sports companies;
- the licensing detail for event operations and venue operations, together with sport facility classification and development standards;
- how the National Sports Registry will operate in practice, and what information it will make public;
- a regulatory framework governing contractual relations between clubs/federations and players/coaches; and
- measures to register players and coaches with social insurance and develop appropriate insurance products.
3. Discipline, Inspection, and Sanctions
The Law distinguishes federation-led sports discipline (preserving federation autonomy) from regulatory non-compliance enforced by the Ministry through inspection and a dedicated adjudication process. The Ministry may investigate violations, impose capped fines, and refer serious cases to the Violations Adjudication Committee, whose decisions are appealable.
Administrative sanctions include fines of up to SAR 5 million (approximately USD 1.33 million), license suspension or cancellation, temporary or permanent facility closure, disqualification from licensing, and - for non-company clubs - governance measures such as board suspension or dissolution. Decisions may be challenged internally and before the Administrative Court. For operators and investors, compliance is now a defined and manageable risk rather than an informal expectation.
Sports Entity Commercialization: Club Conversion and Investment Opportunities
1. Clubs and Leagues as Companies
The Law allows clubs and leagues to operate either as nonprofit sports bodies or as companies under the Companies Law and establishes a formal conversion pathway; a nonprofit club or league may convert into a company by resolution of its general assembly, subject to ministerial approval. Upon conversion, the new company succeeds to the name, logos, assets, contracts, rights, and obligations of the original entity and assumes all preexisting liabilities. The original entity’s legal personhood terminates once incorporation and transfers are completed. In practical terms, it may enable equity investment and structured financing without disrupting existing contractual arrangements underlying sporting operations.
Two transaction-level implications follow. First, because liabilities transfer to the new company, conversion does not operate as a clean slate; diligence on legacy contracts, disputes, and contingent liabilities is therefore critical. Second, the Minister retains authority over the proceeds of conversion, to be applied in accordance with the Law’s objectives as further detailed in the Regulations. Thus, parties may wish to treat the proceeds as a regulated element of the transaction and follow the Regulations as they are issued.
2. Foreign Investment
The Law addresses foreign investment only in relation to clubs and leagues, leaving foreign ownership limits, if any, to be set by a Minister decision in coordination with the competent foreign investment committee. These limits are targeted and do not extend to other sports-related activities, such as event operations, venue management, media, sponsorship, technology, or services, which remain subject to Saudi Arabia’s general foreign investment regime. Within that framework, foreign participation in other sports-related activities may continue to take the form of equity investments, revenue-specific joint ventures, and management or services arrangements under applicable commercial law.
3. M&A and Ownership Changes in the Regulatory Frame
The Law contemplates that the Ministry will coordinate with other agencies to set requirements for approvals for mergers, acquisitions, and dispositions of ownership interests in sports companies, consistent with the sports sector interest. As provided, the law’s text does not specify which transactions trigger approvals, the review process, or timing. In the interim, transactions may anticipate a regulatory approval condition precedent, long-stop dates aligned to potential review periods, and interim operating covenants to preserve licensing and compliance status.
4. Beyond Clubs and Leagues
The Law’s potential commercial opportunity is not limited to equity investment in clubs or leagues. It also establishes a licensed operating lane for sophisticated service providers, particularly those supporting Saudi Arabia’ s major event pipeline, venue development, and the broader ecosystem of ticketing and fan-experience operators. Under the law, the development, operation, and management of sports events and venues as a commercial activity requires a Ministry license, which seeks to bring regulatory clarity and reduce uncertainty for operators.
Governance Risk Assessment: National Registry Verification and Dispute Resolution
1. Counterparty Authority
Defined entity types, mandatory registration, and activity-based licensing materially increase certainty around who's authorized to do what. Counterparty verification becomes less reliant on representations and increasingly capable of independent confirmation. As the Registry develops, it may become the primary reference point for assessing legal standing. Investors may wish to request early evidence of (i) the Registry’s entries and updates; (ii) required Ministry approvals, if any; and (iii) applicable operational licenses, if any is required. Proper use of the register may shorten diligence timelines and reduce execution risk as practice matures.
2. Governance Shifts from Custom to Contract
The new Sports Law establishes standardized governance structures for non-company sports entities, specifically requiring general assemblies, boards, and executive positions, while also mandating specific content in their constitutional documents. It also formalizes board and executive liability, including a defined path for liability claims. All stakeholders must align both the entity’s constitution and the statute’s authority split with the Law’s and Regulations’ governance clauses.
3. Structured Sports Arbitration Pathway
The law expressly recognizes arbitration clauses contained in the constitutional documents or regulations of sports entities as written arbitration agreements for the purposes of the Saudi Arbitration Law. This closes a long-standing legislative gap and materially reduces enforcement risk when arbitral awards are challenged. That said, dispute-resolution clauses must be drafted deliberately; they should comply with the requirements of the Saudi Arbitration Law and, where parties intend to rely on the Saudi Sports Arbitration Centre, align with its jurisdiction and procedural framework.
4. Sports Venues: Development and Operation
For venue investors and developers, the law might make two points commercially decisive. First, a Ministry license is required before constructing a sports facility and the Regulations will classify facilities and set the relevant standards. Second, operating or managing a sports facility is a separately licensed activity, again to be detailed in the Regulations, with exemptions to be specified. This means that venue projects should be treated as regulated assets, not construction-only projects. Investors and developers should consider building project documents around the licensing scheme and allocate regulatory design and compliance risk accordingly, so the operator does not inherit a venue that is physically complete but not licensable.
Forthcoming Regulatory Developments: Implementing Regulations and Ministerial Decisions
The Law is a framework statute, and most details will arrive through the Regulations and ministerial instruments. Key points for consideration include:
Strategic Considerations for Sports Sector Stakeholders
The Law aims to reset the baseline for how sports projects and transactions are structured in Saudi Arabia. Stakeholders may wish to plan for regulatory alignment early, define entities and rights clearly, identify which activities require Ministry licensing, and factor those requirements into contracts. The next step might be tracking implementation; as the Regulations and related Ministerial/Cabinet instruments are issued, investors and operators should consider checking their deal documents and operating plans against the new requirements and update them as needed.