Newcastle United fans eagerly awaiting Premier League ratification of the £300 million proposed takeover by the Amanda Staveley-led and Saudi-backed consortium have been cautioned not to expect a spending spree if and when the deal is eventually given the green light.
Staveley and her partners are waiting for the result of the Premier League’s owners and directors’ test. They are confident that the ruling body will not block the takeover and believe the holdup is down to timing more than questions about the suitability of Saudi Arabia’s Public Investment Fund (PIF) buying into the top flight of the English game.
Project Restart has taken most of the Premier League’s energy and attention during the Coronavirus crisis and, although frustrated by the holdup, Staveley’s group – which also includes the Reuben brothers, the London-based billionaires – believes they will receive approval to take the reins from Mike Ashley in the next few weeks.
PIF are believed to be putting up 80 per cent of the funding which has caused controversy because of Saudi Arabia’s human-rights record. The Saudi involvement has also generated excitement among supporters because of the desert kingdom’s immense wealth. However, a person close to the consortium yesterday downplayed the idea that St James’ Park could soon be awash with oil money.
“Newcastle is not about to become the richest club in the world,” the source said. “Newcastle will have very rich owners but that does not mean massive spending.”
Those involved are keen to play down the expectations of fans. Comparisons with Chelsea and Manchester City – two clubs who were transformed by massively wealthy owners – are misleading.
“Even if the environment was the same as when Roman Abramovich bought Chelsea in 2003 or Abu Dhabi went into City five years later, things would still be done differently. This takeover is based on strict investment criteria. Even if there were no financial fair play (FFP) rules in place spending would be sensible.”
City have been used as an extension of Abu Dhabi’s soft power and the injection of cash from the Emirate turned the club into a European powerhouse. However, the extravagant approach to squad building has provoked suspicion, envy and Uefa investigations.
The Premier League champions were banned from the Champions League for two years in February for breaching European football’s FFP rules. City’s three-day appeal against the sentence concludes today at the Court of Arbitration for Sport in Lausanne.
Both Chelsea and City were ‘vanity’ buys where money, at least initially, was no object. In the first few years of new ownership at Stamford Bridge and the Etihad, neither club was run with a view to sustainability. Newcastle, if the takeover succeeds, will be in a very different situation. The putative new regime at St James’ Park plans to invest in the team but only within the parameters of FFP. The club will need to pay its own way.
There has been some surprise that PIF plan to take just 80 per cent of Newcastle and not the entire shareholding. The Staveley camp explain that this is because the buyout is a strictly commercial deal and the Saudis are sharing the risk. PCP Capital Partners, Staveley’s company, and the Rueben brothers are each acquiring 10 per cent.
This reflects that the purchase of Newcastle was not driven by Riyadh but by Staveley, who has hankered for involvement in a Premier League club since participating in the City sale 12 years ago. She led the Dubai attempt to acquire Liverpool in the same year and tried again to obtain a controlling stake at Anfield more recently, although Fenway Sports Group never took the overtures seriously enough to enter face-to-face negotiations. Staveley maintains strong links in the Gulf has a good relationship with Sheikh Mansour, City’s owner.
This week the businesswoman has been distracted from the pursuit of Newcastle by a High Court case in London where she is suing Barclays for up to £1.5 billion. Staveley brokered Mansour’s £3.25 billion bailout of the bank during the financial crisis of 2008 and contends that Barclays concealed that PCP were given “manifestly worse terms” than other investors.
Opponents to Saudi involvement in Newcastle include Amnesty International, which claims the Premier League will be “a willing dupe of those trying to sportswash their abysmal human rights record” if the owners and directors’ test is positive. It is unlikely the PIF’s participation will be blocked on moral grounds.
There are also serious questions about the role of the Saudi government in the hijacking of beIn Sports’ transmissions in the Middle East. BeIn, a Premier League rights holder, alleges that beoutQ, which pirates the Qatari-based broadcaster’s content, is facilitated by Riyadh. Saudi Arabia, the United Arab Emirates, Bahrain and Egypt have been blockading Qatar for the past three years after accusing the country of sponsoring terrorism. Doha alleges that the theft of beIn broadcasts is part of an ongoing cold war in the Gulf.
Newcastle and the Premier League have unwittingly been sucked into Middle East power politics with PIF involvement.
The majority of Newcastle supporters just want Ashley out but the Saudis may not be the big-spending saviours that some imagine. The era of cautious spending is likely to continue on Tyneside, whoever controls the boardroom.