* State intervening in sectors seen as strategic
* Deal would take rights away from privately controlled MBC
* Government gives sports a push in diversification drive
* Follows detention of MBC chief in corruption crackdown
* Government plans to privatise some teams in league (Recasts with comment by Saudi Telecom and head of authority, no comment by MBC, context, analysis)
By Marwa Rashad
DUBAI, Feb 6 (Reuters) - State-run Saudi Telecom has tentatively agreed to pay $1.8 billion for rights to broadcast Saudi Arabian professional soccer matches over 10 years, a fresh sign of government intervention in business areas which it considers strategic.
The kingdom’s biggest telecommunications operator signed a memorandum of understanding with the government’s General Sports Authority to pay 6.6 billion riyals ($1.8 billion) for exclusive rights, the authority said on Tuesday.
The deal, if finalised, would take the rights from privately controlled regional broadcaster MBC group, which in July 2014 signed a 10-year deal to obtain them. That agreement was worth 4.1 billion riyals, according to Saudi broadcaster Al Arabiya.
It was not clear whether the decision to end the arrangement with MBC was related to Saudi Arabia’s sweeping crackdown on corruption, which has seen dozens of businessmen agree to hand over more than $100 billion of assets to the state in financial settlements of allegations against them, according to officials.
Saudi businessman Waleed al-Ibrahim, who has management control of MBC, was detained for nearly three months in the crackdown and released late last month.
Ibrahim, who could not be reached for comment, agreed to an undisclosed settlement after admitting to unspecified violations, according to senior Saudi officials.
MBC said he had been found innocent of any wrongdoing in the probe and would keep management control of MBC.
MBC declined to comment when contacted by Reuters on Tuesday. The head of the authority, Turki Al al-Sheikh, wrote on Twitter that the Saudi Telecom deal would be the biggest sponsorship contract in the Middle East, and much larger than the MBC contract.
The government is keen to develop the sports industry as part of reforms to diversify the economy beyond oil exports, and the authority said its deal was in line with that drive.
Saudi Telecom is 70 percent owned by the Public Investment Fund, Riyadh’s top sovereign wealth fund, according to Thomson Reuters data. In the past year, the fund has begun investing in many industries - from real estate to tourism and waste recycling - that it wants to develop faster than the private sector can manage on its own.
Some analysts believe the PIF and other state bodies will increasingly dominate parts of the economy after the corruption crackdown made some private businessmen more cautious about investing.
Saudi Telecom’s memorandum of understanding covered exclusive rights to broadcast matches of Saudi Arabia’s Professional Football League and the national team, as well as sponsorship rights, the authority said.
During the two-month period of the memorandum, a detailed agreement would be negotiated, it added.
Saudi Telecom’s chief executive Khaled Biyari told Al Arabiya that his company expected good returns from the deal and would provide packages for customers to watch the Saudi football league on television, via digital media and through the company’s fibre optic network.
“As is the case with all our investments, an investment deal with this size was definitely backed by detailed study of the expected returns,” he said.
Jadwa Investment, a top local investment bank, was appointed last year to advise on the planned privatisation of as many as five soccer clubs in the Saudi Professional League.
The Saudi Telecom deal may be a step towards privatisation deals, but the authority did not mention the issue. (Writing by Andrew Torchia; Editing by Edmund Blair)