The Business Year

Donal McElwee

SAUDI ARABIA - Sports

Donal McElwee

Partner & Head of ME and Africa, Portas Consulting

Bio

Donal leads Portas Consulting in the Middle East. He has worked on 70+ engagements in the Saudi Sports Sector since 2015. Prior to Portas, worked in general management consultancy and corporate law, in the UK and US. He is a graduate of Harvard Law School and the Wharton School.

“The great thing about Saudi sports is that it is developing at such an accelerated rate, that each year brings new and exciting projects.”

Can you elaborate on Portas Consulting’s mission and operations in Saudi Arabia?

We are a management consultancy focused exclusively on serving senior leaders in sport. Our people believe in the power of sport to improve society and drive change. Our first project in Saudi was the strategy to increase participation in 2015, when the transformation of the sports sector was at its early stages. The Saudi vision, aspirations, and ambitions for sport are inspiring, and aligned with why we exist as a company. We invested heavily into developing a Saudi office and have been fortunate to have been a part of the transformation journey over the last seven years. We also have offices in Europe and Asia, serving global sports clients through our expertise-based practices, which include public sector, major events, investments, sports federations, football, women in sport and sporting infrastructure.

How is your portfolio composition evolving in the private and public sectors?

Initially, a great deal of our work was at the national level, setting the policies, plans and foundations for success. Now we are starting to see more implementation focused projects, particularly at the regional or city level. The Ministry of Sports has put in place the framework to support the rest of the ecosystem in developing their plans. For example, their sports club transformation program has led to better management, governance, and sustainability among the clubs. As a result, these clubs are now coming to us for advice on how to transform. The same is true for sports federations. The Ministry of Sports and Saudi Arabian Olympic and Paralympic Committee have put in place transformation programs to support the development of over 100 sports, and sports federations are seeking assistance on that growth journey. The private sector is also growing, with many large Saudi conglomerates taking notice of the revenue potential of the sports market.

How will you shape your competitive advantages and ensure a leading position in the sector you are operating in?


Local presence has been extremely successful for us. When we first came to Saudi in 2015, we brought a full team on the ground from London and immediately started to hire local talent. We have been extremely fortunate with our local hires, and many of them have gone on to work in senior roles within the Saudi sports ecosystem, which we are very proud of. The success factor is being willing to invest in building local talent. While it is important that we are a global company that brings best practice from around the world, the future plan is for Portas Arabia, our KSA based entity, to be led by Saudis; the transition is happening.

What iconic projects have you worked on, and what does the future have in store?

The great thing about Saudi sports is that it is developing at such an accelerated rate, that each year brings new and exciting projects. One of the big revolutions has been the change in the participation rates; when we first came in 2015, only a small percentage of the population was participating in regular sport and physical activity, and it has now grown to 48.2% of the population exercising for at least 30 minutes a week, with great credit due to the Quality of Life VRP, Ministry of Sports and Saudi Sports For All Federation, for this improvement. A major driver of the change has been the increase in opportunities for women in sports, with women having equal opportunity across the sports landscape. The number of people walking as a basic entry-level physical activity has also increased significantly and is a very visible change. Post-COVID-19, recognition of the importance of fitness for health increased. Also notable has been the growth of the Saudi gym sector, which has increased from a market size of SAR 3.6 bn in in 2017 to SAR 6.1 bn in 2021, with the number of gym members growing from 1.1 million to 1.7 million. This trend is set to continue due to increasing demand for fitness globally, the increasing participation rates in the Kingdom, a young population, disposable income and regulatory support from the government. In 2023, we would anticipate supporting the delivery of the National Sports Sector Strategy, with an increasing number of projects across all the verticals in sport, from mega events through to regional development projects.

What are the opportunities in investing in private entities and sports?

From the investors perspective, there are over 80 investment areas for them to choose from when considering the sports sector. Growth potential is a key decision-making factor for investors. If you take the gym market as an example, the penetration rate of gyms in Saudi is around 6%, compared to 18% in the UK, showing the significant room for growth. Our prediction is the gym market is worth about SAR 12 billion by 2027, and we see many new investors, local and international, coming to us for advice. Beyond fitness, the government is promoting investment into every sport. There are 100 sports federations and committees now, and every investment area that a sport needs to grow will thrive, including event management, facility operations, talent management and sports retail, to name a few.

Are you seeing an opportunity to be the entity that bridges the gap between these local opportunities and international players?

We are one of many entities with a role to play in showcasing the opportunities to international investors. The Ministry of Sports and Ministry of Investment are already supporting international investors enter the market as part of their policy setting mandates. The giga projects and development projects are also starting to bring in the best of global expertise to activate their ambitious spots plans – NEOM’s partnership with McLaren is a good example of this. For our part, we believe there has to be a balance between supporting local businesses increase their presence in sport, and bringing global expertise where it can accelerate the change. The international businesses that succeed in Saudi will be those who truly embrace the partnership opportunity, and commit for the long-term.

What are your biggest priorities?

Our main priority in Saudi is to embed ourselves as a truly local business in every sense, with a strong focus on capability building. It is a long-term commitment. Riyadh is our regional headquarter and our fastest growing office globally. We have been extremely fortunate in Saudi to have partnered with the major entities in sports and feel privileged to be part of the ongoing change journey. We truly believe there is no more exciting place to be in the world of sports right now.

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