An investment firm owned by Saudi Arabia’s Public Investment Fund (PIF) has emerged as a frontrunner to back a new cycling league, three people familiar with the matter told Reuters, the latest move by the kingdom to buy into global sports.

SRJ Sports Investments, founded last year, is in exclusive negotiations over a potential investment of around 250 million euro ($270 million) in the venture being spearheaded by a number of major European cycling teams, one of the people said.

If successful, it would mark Saudi Arabia's first significant involvement in cycling after pouring billions into other sports worldwide such as football, motorsports and martial arts. Sports is one of the pillars of the government's Vision 2030 economic diversification plan that seeks to build new industries and create jobs. Some critics have called it an effort to distract from its human rights record.

SRJ is expected to finalise commercial aspects of a deal over the next two months after prevailing in an auction over other investors including private equity fund CVC, the person said.

Consulting firm EY had been seeking expressions of interest from investors for a new project, Reuters reported in October. Some top cycling teams are concerned that the lion's share of profits from the main races, including the Tour de France, go to their organisers and a new league could be a way to recalibrate earnings, sources previously told Reuters.

The venture, which may amalgamate new and existing races, is being led by a handful of teams including Visma-Lease a Bike and billionaire businessman Jim Ratcliffe’s Ineos Grenadiers, those sources said.

The sources for this story, speaking on condition of anonymity, cautioned a deal may not be sealed and talks are ongoing.

EY and Ineos Grenadiers declined to comment. Representatives for SRJ did not respond to requests for comment.

"This idea is being explored, as many more ideas are being explored to come up with a sustainable business model for cycling in the future," Visma-Lease a Bike told Reuters.

The talks do not involve Amaury Sports Organisation (ASO), which controls the Tour de France and La Vuelta, or RCS Sports, which controls the Giro d'Italia, and it's unclear whether either might join in future, the person added.

Representatives for RCS Sports, its parent company RCS Media Group, and ASO did not respond to requests for comment

Attempts to create a new cycling league have been explored in the past, including in 2012 when eight teams founded a project called World Series Cycling (WSC), though the plans failed to materialise.

SRJ was established in August by PIF in a bid to "accelerate the growth of the sports sector" in Saudi Arabia and the Middle East and North Africa.

It acquires and creates new sports events intellectual property, commercial rights of popular sports competitions and host major global events in Saudi Arabia, according to SRJ's website.

It took a stake in the Professional Fighters League, to help it recruit top mixed martial arts fighters worldwide, and became an investor in a new regional league PFL MENA, SRJ said in August.

($1 = 0.9235 euros)

(Reporting by Amy-Jo Crowley and Anousha Sakoui in London Additional reporting Julien Pretot in Paris and Elvira Pollina in Milan. Editing by Louise Heavens and Mark Potter)