New Dawn at Newcastle: Saudi-led consortium complete takeover of Newcastle United FC

October 13, 2021

3 min read

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What's going on here?

A Saudi Arabian-backed ÂŁ305m takeover of Newcastle United FC has been completed.

What does this mean?

The news concludes over 18 months of negotiations between the Premier League and the consortium consisting of the Saudi Public Investment Fund (PIF) which will act as majority owner, PCP Capital Partners (a venture capital and private equity firm) and RB Sports & Media. A deal was initially struck in April 2020, but the consortium walked away when the Premier League offered arbitration to settle a disagreement on who would control the club. However, with Saudi Arabia settling an alleged piracy (the act of illegally reproducing or disseminating copyrighted material) dispute with Qatar-based broadcaster beIn Sports (which owns rights to Premier League matches in the Middle East) and giving “legally binding reassurances” to the league that the state would not control PIF, an agreement has now been reached.

The takeover brings an end to Mike Ashely’s 14-year spell as Newcastle owner, during which he was heavily criticised by the club’s supporters for a severe lack of investment and ambition. But with PIF possessing assets of ÂŁ250bn – more than the owner net worth of the other 19 Premier League clubs combined – the Magpies could be considered the wealthiest club in the world. Amanda Staveley, owner of PCP Capital Partners which will own 10% of the club, said the new owners are making a “long-term investment” to ensure Newcastle are “regularly competing for major trophies”.

What's the big picture effect?

The takeover has been seen as hugely controversial, largely due to the human rights abuses stemming from the Saudi state, namely the imprisonment of women’s rights campaigners and the prohibition of homosexuality – the death penalty is the country’s legally prescribed punishment for same-sex sexual acts. Perhaps most notoriously, however, is the accusation against the Crown Prince of Saudi Arabia, Mohammed bin Salman, that he ordered the murder of journalist Jamal Khashoggi in 2018 – which he denies. Despite the Premier League’s insistence that PIF is separate from the Saudi state, human rights organisations and campaigners still believe the connection is clear with Salman being listed as its chair. Sacha Deshmukh, chief executive of Amnesty International UK, has urged the Premier League to change its owners and directors’ test “to address human rights issues” in light of the takeover, and that it “needs to better understand the dynamic of sportswashing (the practice of using sport to improve one’s image) and tighten its ownership rules”.

Managing the public relations of a Saudi Arabian-backed takeover will unsurprisingly be at the top of the consortium’s agenda, and will likely continue into the long term. It is worth noting, however, that the Saudi state has already shown its capacity to handle such issues when hosting fights for British heavyweight Anthony Joshua, the Spanish Super Cup and a Formula 1 grand prix, which is set to take place for the first time in December. With law firms Allen & Overy, Freshfields and Reed Smith all acting for the new owners, it is expected that they will be working closely with the consortium’s public relations experts over the coming months.

So what does this mean for the future footballing landscape? On the plus side, it means that the upper echelons of the Premier League will now become more competitive. If it wasn’t already confirmed, the takeover represents the final nail in the coffin of the “Big Six” – a commercially-incentivised label propped up by mainstream sports media to describe the league’s richest teams. With clubs such as Leicester, Aston Villa and now Newcastle operating with deep pockets, suddenly the league becomes more unpredictable – and commercially more attractive. It will also mean huge investment in Newcastle’s surrounding area, from new housing to renovating the club’s stadium. PIF will look to mirror what Sheikh Mansour of Manchester City has done to revitalise the local community there. However, the move will increase pressure on football authorities to revamp Financial Fair Play (FFP) regulations. With Newcastle already set to spend as much as ÂŁ190m in the January transfer window, many will claim that reform is more urgent than ever – for the security of long-term sustainability and the preservation of meaningful competition in the “beautiful game”.

Report written by Charlie Parkman

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