Saudi Arabia’s New Sports Law: Regulatory Changes and Sector-Wide Implications

Saudi Arabia’s new Sports Law establishes a unified regulatory framework that formalizes the sports sector as a commercial industry, introducing clearer rules on licensing, governance, investment, and dispute resolution. 

Saudi Arabia has enacted a new Sports Law under Royal Decree No. (M/121) (hereinafter, the “Sports Law”) dated December 1, 2025, introducing a unified legal framework for the regulation, commercialization, and governance of the Kingdom’s sports sector. The legislation represents a shift away from ad hoc oversight toward a structured regulatory model designed to support sustained private investment, professional management, and large-scale event delivery.

Rather than regulating individual disciplines or events in isolation, the Saudi Arabia’s new Sports Law establishes a baseline legal architecture for sports entities, commercial operators, infrastructure developers, and service providers. Operational detail will be further defined through implementing regulations and ministerial decisions, expected to follow within the coming months.

Establishing a unified regulatory framework

The Sports Law consolidates the legal foundations of the sector by clearly defining recognized sports entities, introducing a centralized registry, and formalizing licensing and compliance requirements.

Key structural elements include:

• Legal recognition of sports clubs, leagues, and federations as regulated entities;
• Creation of a National Sports Registry linking legal personality to registration;
• Standardized governance requirements and executive accountability; and
• Clear separation between sports discipline (handled by federations) and regulatory enforcement (handled by the Ministry of Sport)

Through these mechanisms, the law positions sports organizations not only as cultural or social institutions, but as economic actors subject to defined regulatory oversight.

National sports registry and entity recognition

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The National Sports Registry is intended to function as the backbone of the new system. Registration under the law is required for sports entities to obtain legal capacity and operate within the regulated framework. The Registry is expected to include core sports bodies, institutional actors such as the sports arbitration center and anti-doping authority, as well as licensed operators, including sports facilities, academies, institutes, and training centers.

From a commercial perspective, the Registry may become a key reference point for confirming counterparty authority, governance status, and licensing compliance, reducing uncertainty in transactions and partnerships.

Licensing of sports activities and facilities

The Sports Law introduces activity-based licensing for areas that involve public safety, consumer protection, or systemic risk. Licensing requirements apply across several segments of the sports value chain.

Licensable activities include:

• Organization and commercial operation of sports events and competitions;
• Construction, modification, operation, or management of sports facilities;
• Operation of sports academies, institutes, and training centers; and
• Licensing of coaches, technical staff, and trainers.

Certain exemptions and classification standards will be specified in the implementing regulations. Until then, market participants should assume that most commercial sports activities will fall within the licensing perimeter

Compliance, inspections, and sanctions

Saudi Arabia’s new Sports Law introduces a formal compliance and enforcement regime administered by the Ministry of Sport. While federations retain authority over sporting discipline, regulatory non-compliance is handled through inspection and administrative procedures.

Potential sanctions include:

• Administrative fines of up to SAR 5 million (US$1.33 million);
• Suspension or cancellation of operating licenses;
• Temporary or permanent closure of facilities;
• Disqualification from future licensing; and
• Governance interventions for non-corporate clubs, including board suspension.

Decisions may be challenged internally and before the Administrative Court. For investors and operators, the law converts previously informal compliance expectations into defined regulatory risk that can be contractually allocated and managed.

Commercialization and corporate conversion of clubs

A central reform under the law is the introduction of a formal pathway for sports clubs and leagues to convert into corporate entities under the Companies Law. This mechanism is designed to support investment, financing, and professional management.

Key features of the conversion framework include:

• Conversion subject to approval by the general assembly and the Sports Minister;
• Automatic transfer of assets, contracts, rights, and liabilities to the new company;
• Termination of the original entity’s legal personality upon completion; and
• Ministerial oversight of the use of conversion proceeds.

Importantly, conversion does not eliminate historical liabilities, making due diligence on legacy obligations essential in any investment or acquisition involving converted entities.

Foreign investment and ownership considerations

The Sports Law addresses foreign investment in a targeted and sector-specific manner, focusing primarily on ownership in sports clubs and leagues. Any limits on foreign participation in these entities will be determined through separate ministerial decisions, to be issued in coordination with the competent foreign investment authorities. At this stage, the law itself does not set ownership caps or quantitative thresholds, leaving this aspect of the regime open pending further regulatory clarification.

Importantly, the law does not introduce foreign ownership restrictions across the broader sports value chain. Activities such as event organization, venue development and management, broadcasting, sponsorship, technology solutions, and ancillary services continue to fall under Saudi Arabia’s general foreign investment framework.

Within that framework, foreign participation may take a variety of forms, including direct equity investment, joint ventures with local partners, and management or service-based arrangements.

M&A and ownership changes

The Sports Law also anticipates regulatory oversight of mergers, acquisitions, and changes in ownership involving sports companies, reflecting the strategic importance of the sector. While the law confirms that such transactions may be subject to approval requirements, it does not yet define the thresholds, scope, or procedural mechanics that would trigger regulatory review.

These elements are expected to be addressed through subsequent regulations or ministerial guidance.

Sports arbitration and dispute resolution

The law explicitly recognizes arbitration clauses contained in the constitutional documents or regulations of sports entities as valid written arbitration agreements under Saudi law. This clarification strengthens the enforceability of sports-related arbitral awards.

Parties relying on arbitration should ensure that:

• Dispute resolution clauses comply with the Saudi Arbitration Law;
• Jurisdictional alignment exists with the Saudi Sports Arbitration Centre, where applicable; and
• Clauses are carefully drafted to avoid procedural challenges

This development reduces legal uncertainty in disputes involving clubs, leagues, players, and commercial partners.

Sports infrastructure and venue development

Sports venues are treated as regulated assets rather than purely construction projects. Ministry licensing is required not only for development, but also for operation and management.

For investors and developers, this means:

• Licensing considerations must be integrated from the design stage
• Operational readiness is as critical as physical completion
• Regulatory risk should be allocated contractually between developers and operators

Failure to secure the appropriate licenses may prevent a completed facility from being legally operated

Pending regulations and next steps

As a framework law, much of the practical impact will depend on forthcoming regulations and ministerial instruments. Areas expected to be clarified include:

• Foreign ownership caps and minimum capital requirements;
• Licensing standards for events and facilities;
• Public disclosure scope of the National Sports Registry;
• Contractual frameworks for players and coaches; and
• Social insurance and sector-specific insurance mechanisms.

Key takeaways

Saudi Arabia’s new Sports Law formally positions the sports sector as a regulated economic industry rather than a collection of ad hoc sporting activities. By introducing a unified legal framework, the law provides greater structural clarity for clubs, leagues, event operators, and infrastructure developers, supporting the Kingdom’s shift toward a continuous and commercially driven sports economy.

Registration and licensing now sit at the center of regulatory compliance. Legal capacity and operational authority are tied to inclusion in the National Sports Registry and to activity-based licenses, which increases transparency but also raises the importance of regulatory due diligence in transactions, partnerships, and project development.

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The law creates a clear pathway for the commercialization of clubs and leagues through conversion into corporate entities, enabling equity investment and structured financing. However, this process does not eliminate existing liabilities, meaning investors must carefully assess legacy risks rather than treating conversion as a clean restructuring mechanism.

Foreign investment remains broadly accessible across most areas of the sports ecosystem. While foreign ownership of clubs and leagues will be subject to sector-specific rules to be defined separately, activities such as event operations, venue management, media, sponsorship, and technology services continue to fall under Saudi Arabia’s general foreign investment regime.

Finally, the law strengthens legal certainty around dispute resolution and infrastructure development. The express recognition of sports arbitration reduces enforcement risk in disputes, while the licensing framework for sports facilities underscores the need to treat venues as regulated operational assets from the earliest stages of project planning.

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