As Saudi Arabia’s Public Investment Fund reportedly withdraws from LIV Golf and rethinks its global sport footprint, Australia’s Sports Diplomacy Strategy 2032+ has a rare window to define what Indo-Pacific sport diplomacy should look like. The opportunity is real, but the governance architecture is not yet built.
This is important for Australia.
In the past fortnight, multiple outlets have reported that Saudi Arabia’s Public Investment Fund will stop funding LIV Golf after 2026. The PIF has reportedly invested more than five billion US dollars in the circuit since 2022. A fresh capital injection of 266 million US dollars was approved only a few months ago. However, the fund has already sold one of its Saudi Pro League clubs, and its new strategic direction pivots away from international image-building toward domestic investment. The Iran war and its pressure on sovereign spending have concentrated minds in Riyadh.
For the past decade, the dominant narrative in sports diplomacy commentary has positioned Indo-Pacific states, principally Saudi Arabia and Qatar, and to a lesser extent Japan and South Korea, as ahead of Australia in using sports as an instrument of economic statecraft. The mega-events, acquisitions, league launches, and stadium diplomacy in the Pacific were all framed as evidence that Australia was being outspent and outmanoeuvred. Stuart Murray’s Lowy Interpreter piece in 2023, Sam Risdon’s work at Devpolicy, and the sports diplomacy chapters written in support of the Sports Diplomacy Strategy 2032+ all assume an implicit hierarchy in which Australia is catching up.
The LIV Golf story suggests that this hierarchy was never stable. A sports statecraft model that depends on a sovereign wealth subsidy without a self-sustaining commercial logic is vulnerable to any external shock that forces a sovereign to reallocate. The Iran conflict did not destroy the LIV. It simply removed the political tolerance for a five-billion-dollar loss on a circuit that was losing audience, talent, and legitimacy. The model was always going to hit this wall in terms of accuracy. The war simply brought the wall forward.
Japan offers a useful contrast to the US. Under Prime Minister Sanae Takaichi, Japan is doubling its defence budget, revising the Three Principles on the Transfer of Defence Equipment, and deepening security cooperation with the Philippines, Australia, and India. Sports are present in Japan’s Indo-Pacific posture through development aid and cultural exchange, but it is a third-order instrument behind defence, official development assistance, and trade. The Japanese approach to sports as statecraft has been quieter, more sustained, and more integrated with broader regional relationships. It is also crucially less exposed to sudden reversals because it is not built on outsized sovereign bets on any single asset.
Between these two poles, Australia is building a model that looks increasingly coherent rather than lagging behind.
The Sports Diplomacy Strategy 2032+, launched by Assistant Foreign Minister Tim Watts, sets out nine actions spanning economic growth, Indo-Pacific engagement, integrity, and regional resilience. PacificAus Sports, a AUD$ 52 million program running since 2019, has reached 850 players and officials across more than 120 events in Tonga, Solomon Islands, Vanuatu, Papua New Guinea, Fiji, and Samoa. The $ 600 million Pacific Rugby League Partnership, announced in December 2024, will see the PNG Chiefs debut in the NRL in 2028, alongside grassroots and community investment across four Pacific nations. The Sports Diplomacy Consultative Group, convened in late 2024, formally linked DFAT to twenty-two national sporting organisations.
These are not isolated investments. They form a multi-instrument approach that sits between the Saudi model of sovereign spending and the Japanese model of integrated regional engagement. Arguably, it is its own thing. A middle power sports diplomacy architecture oriented toward the Pacific and increasingly Asia, grounded in long-term partnerships, and connected to broader foreign policy instruments rather than running parallel to them.
The opportunity is to name this as a model, defend it publicly, and address the three areas where it remains underdeveloped.
First, the integrity architecture. Australia has invested heavily in Pacific sports pipelines without publishing a clear framework for how emerging athletes will be contracted, commercially protected, and governed at scale once they enter elite competition. The 2023 FIFA Football Agent Regulations, currently suspended worldwide pending a European Court of Justice ruling, are a cautionary case of what happens when governance is designed after rather than before athlete market formation. DFAT, the Australian Sports Commission, and the NRL have a narrow window before Brisbane 2032 to build this architecture.
Second, measurement. Australia spends significantly on sports diplomacy but has no public framework for measuring soft power returns. The United States, United Kingdom, and IOC use structured indices. A transparent measurement framework, published annually, would distinguish Australia’s approach from the opaque Saudi model and build domestic political support for sustained investment.
Third, Asian commercial engagement is increasing. Australia’s sports diplomacy is overwhelmingly Pacific-focused. Asia, where Australia’s longer-term economic and security interests lie, receives less attention. There is an opportunity to build sports commercial partnerships with Japan, South Korea, Indonesia, and India that go beyond cultural exchange into sports law, sports technology, and governance expertise. This is where Australian expertise is genuinely world-class, and the market is least contested.
Sports diplomacy in Asia is entering an inflection point. The biggest spender walks back. The most strategic player does not lead in sports. Australia has quietly built something different. Whether it is enduring depends on whether the current window is used to harden the architecture below it.
Darren Coughlan FIML is Discipline Lead Lecturer in Sport Management at the International College of Management Sydney and a Doctorate of Business Administration candidate at the European Institute of Management and Technology. His research focuses on sport governance, regulatory frameworks, and the commercial and diplomatic architecture of international sport. He is the author of a forthcoming textbook on athlete management and writes at otoli.substack.com.
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