Video game companies are taking Saudi money because everyone else is too

Me: The Saudi Arabian government’s been accused of human rights violations. This deal in particular has been kind of viewed as a way to launder that reputation, to appear modern and future-oriented despite some of those serious human rights concerns. Among those — and I kind of say this without emotion3 — the killing of a dissident journalist who worked for the paper I work for. I'm curious how and if that factored into your thinking as this deal was negotiated?

Craig Levine: I mean, look, first, this is a financial investment that's being made by PIF [the Public Investment Fund], one of the largest sovereign wealth funds that has very large positions within some of the largest gaming companies. They have been big backers of things like SoftBank Vision Fund, into Uber and DoorDash, and Disney and Live Nation. So this is a financial investment that they're making with Savvy Gaming Group, and Savvy Gaming Group into ESL. So first and foremost, that's the basis of it.

The second thing to your question is absolutely, that was part of getting to know the team: making sure that this was going to be an enabler of our values and our culture and not in any way limit what we can do. We've been big advocates in the world of diversity and inclusion dating back to our launch of AnyKey several years ago and even most recently our GGForAll platform. So it was super important that we took the time to understand the people behind [Savvy] and to make sure that the new relationship together, and ownership structure, would enable that vision across shared values like I was sharing. And as you see more out of Savvy Gaming Group and you hear more from Brian [Ward, CEO of Savvy] as he becomes more outspoken about it, we really we have a joint vision in terms of how we want to approach things like diversity, inclusion and equality just as a topic or just as an example. So, yeah, it's an investment and we took the time to make sure we understood the people and values that would be enabled through this.

The other thing that's super interesting to understand is — I’m going to get the number probably a little bit wrong — something like 70% of the population of the Middle East is under 30 years old. It's a region that's one of the fastest growing gaming markets in the world, which is, again, incredibly exciting and important for us as we think about regions of growth areas in the future that are going to shape this. You know, we believe gaming is an inclusive culture and that's a community that we want to be serving.4

Me: To that point, one of the tensions that I'm really curious about is that a lot of gamers are very online, obviously have very defined stark politics, and a lot of them have strong feelings about deals like this. So on the one hand, you're kind of raising this point of “there are these growing gaming markets.” And on the other hand, there is this existing market that, to my eye at least, has pretty strong feelings about arrangements like this. I believe Rainbow 6 just canceled a major in the UAE because of kind of similar concerns. I'm curious how you view that balance of seeking new audiences and catering to old audiences that have very defined perspectives?

Levine: I think you've got to separate governments and you have to separate consumers.5 [Ed. note: You’re going to want to read this footnote.] For us as a commercial business, we're interested in the pursuit of that consumer base and relevance there. And who's anyone to say that the population, players, gamers, community within these regions shouldn’t have access to the kinds of content experiences that we create. So I think that's point one.

We don't have plans here that we're going to start relocating our global events within the region, which is a little bit, you know, what that event was. That's Ubisoft's decision. [Ed. note: Ubisoft is the publisher of Rainbow 6.] I can't speak to their thought process behind it. But from an ESL perspective — or ESL FACEIT Group perspective, excuse me — for us, we want to build local products. We want to engage local community. We want to give those players path to the pro. … Fan access to us is different than decisions about, you know, we would never ask players or competitors to compete anywhere in the world that they weren't comfortable in.

Me: You mentioned that you have pretty strong feelings about the values of Savvy, and Savvy enabling the continuation of ESL FACEIT’s values. I've seen a lot of people theorize that this acquisition will change the culture and the tone and tenor of your work, which I think is actually not likely to be the case. Instead, it seems to me that they will allow you to continue doing the work you're doing — GGForAll, similar initiatives — and that that is the sportswashing element of this. They allow you to continue the good work that you're doing and that provides, you know, some cover for the sovereign wealth fund, for the government it's attached to to say: “Hey, we're modern, we're future oriented.” Does that sort of thing bother you, or keep you up at night? Is that a thing you think about as the head of ESL, or does it just come down to a business decision for you?

Levine: I mean, look, personally, I've been in the esports industry for over 22 years. I've made my entire career here. I wouldn't do anything that I didn't think was the best. I wouldn't advocate for anything that I didn't think was in the best interests of the business and the organization. So, you know, again, we took the time to really get comfortable and understand what's happening. You know, again, as a financial investment, the autonomy that we're going to have… And again, it's a region that we want to have access to for the growth of the business. We're confident that this isn't going to limit us in any of the ways that you were describing, because that would be short sighted. And I think if you look at the history of ESL, one of the things that we're really proud of is being here, being a leader for 22 years. So yeah, we got comfortable with it again through all the steps I spoke about before: Understanding the people behind it, the values, how this was going to enable what we're doing and ultimately deliver a strong financial return as any business is able to do for shareholders.

This is a financial investment that's being made by PIF, one of the largest sovereign wealth funds that has very large positions within some of the largest gaming companies. They have been big backers of things like SoftBank Vision Fund, into Uber and DoorDash, and Disney and Live Nation.

There have been some changes in Qatar, which we can probably attribute to Qatar's pursuit of sports, or its deployment of sport as a policy instrument. But clearly there are things about Qatar that we know about — for example, migrant worker rights. And there is a fundamental disconnect between what Qatar purports to be doing around changes to its labor market rights and what's actually happening on the ground in the country. And so I think we can then say, well, is a country like Saudi Arabia deliberately setting out to mislead, or alternatively, is it trying to do things that ultimately it would actually find much more difficult to achieve than imagined, which is what has happened in Qatar's case?

LIV money is ugly money: the chairman of the Public Investment Fund is Mohammed bin Salman, the Saudi leader who, among other human-rights violations, in 2018 sent a fifteen-member hit squad to murder the dissident journalist Jamal Khashoggi. (The assassins cut his body into small pieces with a cadaver saw and packed them in suitcases.) The LIV lineup includes Graeme McDowell, who won the U.S. Open in 2010 but has had only sporadic tournament success since then. When he was asked about Khashoggi’s assassination at a press conference last week, McDowell referred to it as a “situation,” and added, “If Saudi Arabia wanted to use the game of golf as a way for them to get to where they want to be, and they have the resources to accelerate that experience, I think we’re proud to help them on that journey.”

Source: Saudi Arabia Astroturfs the Golf Course

The younger generation of Al Saud rulers — represented by the recently appointed crown prince — have created the illusion of a “new” Saudi Arabia, one defined by youth, moderation and liberalization. But far from embodying a break with “traditional” Saudi rule, the new generation has simply doubled down on the tried and tested approaches to modern Saudi statecraft.

Like its predecessors, the current regime uses great repressive force to maintain its rule. It relies on the very same programs of reform and modernization to shore up international support while exacerbating sectarian tensions and violently crushing all forms of political opposition, including the very forces of moderation it purports to support.

Source: Don’t be fooled by the comforting rhetoric coming from Saudi Arabia’s crown prince (from 2017)

“What this strategy helps us do is change the conversation from ‘why’ to ‘why not,’” regarding Saudi Arabia, [Prince Faisal bin Bandar bin Sultan Al Saud, head of the Saudi Esports Federation, told Sports Business Journal].