Saudi Arabia scraps NEOM Stadium, set to drop Joy Awards

Saudi Arabia is shelving one of its planned World Cup stadiums and preparing to cancel its star-studded Joy Awards as budget cuts and regional conflict bite into the kingdom’s ambitions of becoming a Middle East entertainment capital.

Construction of the futuristic NEOM Stadium, an elevated arena inside The Line that was slated for the 2034 soccer tournament, has been suspended indefinitely, Reuters reports, while January’s entertainment industry prize ceremony is set to be canceled.

The awards drew stars including Katy Perry and Robbie Williams this year, but budget cuts that began before the Iran war have deepened the strain on the kingdom’s entertainment ambitions.

The pullback follows delays at The Line, the suspension of Riyadh’s $50 billion Mukaab project, and the withdrawal of government funding from LIV Golf.

Last month, the Red Sea Film Festival was postponed until 2027 while organizers of the Soundstorm desert festival called off the three-day event that was headlined by Cardi B last year. Uncertainty over military conflict with Iran has made it difficult to book international stars for such events, Reuters reports.

Neom faces 20% budget cut amid continued drop in Saudi oil prices

Neom, the flagship mega-project of Saudi Crown Prince Mohammed bin Salman’s Vision 2030 economic roadmap, is facing budget cuts.

The development along the Red Sea coast is expected to be allocated 20% less than its targeted budget for this year, Bloomberg reports.

The revision comes as the kingdom reconciles lower-than-expected oil prices and foreign investment that has it on track for at least three more years of projected national budget deficits.

Saudi Finance Minister Mohammed Al-Jadaan has previously said the eight-year-old Vision 2030 plan may face delays because the kingdom needs to be careful about “overheating” the economy – which may cause inflation to rise. 

“If you don’t allow your economy to catch up with your projects, basically what will happen is you’ll import a lot more,” Al-Jadaan said at the Qatar Economic Forum in May.

As a result, Saudi Arabia could lack the factories and other capacity needed to support its plans. “So giving it more time is actually wise,” he said.

Modifying the vision is not necessarily a bad sign, analysts told Bloomberg, echoing the Finance Minister’s comments. The “rightsizing” of projects is a sign the kingdom is maturing, according to Goldman Sachs’ MENA Economist, Farouk Soussa. 

“What they’re doing in terms of adjusting these projects gives us a lot of comfort,” Soussa said. “They’re basically saying they’re not going to go for broke or bet the house on any one particular thing. If it’s possible, they’ll do it. If not, they won’t. They’re being quite sensible.”