In the days after Donald J. Trump was re-elected president, one of his most high-profile stops was at an Ultimate Fighting Championship event at Madison Square Garden.
Mr. Trump’s appearance in the front row was notable, as was the presence of some of his closest confidants, like Elon Musk, who sat alongside him. But few in attendance for the fights would have recognized the other man sitting beside the president-elect.
Yasir al-Rumayyan, the governor of Saudi Arabia’s vast sovereign wealth vehicle, the Public Investment Fund, watched the action from ringside, and is getting even closer to being part of the action. A company owned by the fund is close to creating a boxing league with TKO, the owner of Ultimate Fighting Championship. A deal for what would be a new competition, featuring up-and-coming boxers tied exclusively to the league, could be announced within weeks, according to three people familiar with the matter.
TKO said in a statement on Wednesday that it had “nothing to announce,” but that it “would evaluate any unique and compelling opportunity that could fit well in our portfolio of businesses and create incremental value for our shareholders.”
The wealth fund did not comment.
The potential investment in TKO follows a Saudi Arabian effort in June to create a multibillion-dollar boxing league that would aim to unite the world’s best boxers, who for decades have been divided by rival promoters and fighting for titles controlled by an alphabet soup of sanctioning bodies. That effort, while not completely abandoned, had proved complicated and expensive, even for a country like Saudi Arabia, which for the past half decade has disbursed billions to become a player across some of the world’s biggest sports.
The investment in the new league will be made by Sela, a subsidiary of the Public Investment Fund. TKO — which is majority controlled by the Hollywood talent agency Endeavor and embodied by Dana White, the U.F.C. empresario, a longtime friend of Mr. Trump’s — would be a managing partner. In return, TKO has been offered an equity stake and a share of the revenue, according to the people familiar with the matter, who spoke on the condition of anonymity ahead of the official announcement.
Saudi Arabia has backed some of the biggest and richest boxing bouts in history in recent years. It has played host to major title fights, most recently a face-off between Oleksandr Usyk and Tyson Fury, which ended with Mr. Usyk as the first undisputed heavyweight champion in more than a generation. Fights like that, which for years proved almost impossible to negotiate, have taken place thanks to the millions of dollars put on the table by Turki al-Sheikh, a government official with close ties to the kingdom’s crown prince, Mohammed bin Salman.
Mr. al-Sheikh, a former security guard, has become perhaps the most powerful man in boxing, seen at ringside and even inside the ring for the biggest bouts. He is also a frequent recipient of messages of thanks from some of the best-known fighters and boxing promoters, who refer to him as “His Excellency.” He pushed for a partnership with Mr. White, who over the last two decades has turned the U.F.C. from a $2 million company into one worth more than $10 billion. Talks have been taking place for more than a year in the United States, Europe and Saudi Arabia.
Mr. al-Sheikh had suggested in interviews that he was planning a new boxing venture. And he has made no secret of his frustration at the way the sport has been run, with the best fighters rarely meeting in their prime. In November, he purchased Ring Magazine — the century-old bible of the sport — and vowed to re-establish its prominence.
Mr. al-Sheikh has also teamed up with the World Boxing Council, a sanctioning organization, to create the Boxing Grand Prix, a tournament for young boxers.
For TKO, which owns both the U.F.C. and World Wrestling Entertainment, the venture has little risk, given that the Saudis are footing the bill. “If we were to get involved in boxing, we would expect to do so in an organic way, not an M&A way,” said Mark Shapiro, TKO’s president, on an earnings call in November, referring to mergers and acquisitions.
He added, “So, i.e., we’re not writing a check.”
Should the deal be completed, TKO will earn management fees of close to $30 million a year. Saudi Arabia is expected to pay significantly more in hosting fees to the league than any other country, according to details of the plan reviewed by The New York Times. Two fights there will bring in more than $40 million in fees. Other bouts are planned for the United States and Europe, where the hosting fees will be far lower.
TKO has also been talking with other parties, including other Arab nations, about the boxing league, according to one of the people familiar with the matter.
Endeavor, TKO’s parent company, has at times had a strained relationship with Saudi Arabia, and this potential partnership suggests that it has largely been repaired. In 2019, after the killing of the Saudi journalist Jamal Khashoggi, Endeavor returned $400 million that the Saudi sovereign wealth fund had invested in the company.
For the Saudis, getting a partner like Mr. White would come at an opportune time. He joined the board of Meta this week, and has spoken at the last three Republican National Conventions. Mr. Trump regularly hosted U.F.C. events at his properties in the organization’s early years, and he has attended many fights. Mr. Trump and Mr. al-Rumayyan are also close, with the Saudi-owned LIV golf championship holding several of its events at Mr. Trump’s courses, including one scheduled for April in Florida.
Saudi officials have described sports and entertainment as major pillars of a strategy, known as Vision 2030, to pivot their economy away from its reliance on oil exports, and as a part of efforts to liberalize society. Critics have described those efforts differently, positioning them as a way of using sports to distract the focus from Saudi Arabia’s human rights record, a tool known as sportswashing.
What TKO would get is a partnership with the biggest sports investor in the world. Saudi Arabia has invested in teams, talent and events across a wide range of sports, most recently securing rights to the 2034 men’s soccer World Cup, the most-watched event on the planet.
The U.F.C.’s U.S. media rights agreement with ESPN expires this year, as does the network’s deal with Top Rank, a top boxing promoter. TKO could try to bundle the rights to its new boxing league with the U.F.C. rights to help shore up the fledgling boxing league.
But applying the U.F.C. playbook to boxing will be extremely difficult. Boxing is a much more heavily regulated sport than mixed martial arts, with the federal Muhammad Ali Act mandating a separation in boxing between the role of manager and promoter, and the public listing of purse figures.
Unlike U.F.C., the league would not include the most prominent boxers. And they may not think there is an upside to joining it. While the fractured nature of boxing means its earning potential isn’t maximized for promoters and managers, top boxers earn far more than top M.M.A. fighters.
In October, the U.F.C. settled an antitrust lawsuit filed by former fighters — who claimed that the company illegally suppressed fighters’ pay — for $375 million. Documents submitted as evidence in that suit showed that the U.F.C. paid less than 20 percent of its revenue to its fighters.
In boxing, those figures are reversed, with fighters combining to earn well over 50 percent of the revenue from any fight.
