Newcastle Takeover Explained
Finally, a collective sigh of relief from Newcastle supporters in Tyneside. With the Saudi takeover of the club complete, there are high hopes amongst the long suffering fan base that the club might finally rise back into the upper echelons of English and European football.
The Saudi-led consortium along with PCP Capital Partners and the Reuben brothers paid around 305M Pounds for the purchase of the club. The consortium includes the Public Investment Fund (PIF) of the Kingdom of Saudi Arabia (KSA).
The PIF is the sovereign wealth fund of the KSA, helmed by Crown Prince Mohamed Bin Salman Al Saud, and governed by Yashir Bin Othman Al-Rumayyan, who is also set to become the Non-executive Chairman of Newcastle United. The PIF, which has an estimated US$500M in Assets Under Management (AUM) will hold a controlling stake of (80%) in the club, with the remaining 20% evenly split between Amanda Staveley and the Reuben brothers.
The initial attempt to buy the club in 2020 hit a dead end in July when the PIF failed the Premier League's Owner's and Director's test. Contesting the verdict, former owner Mike Ashley hired Daniel Jowell QC (Queen's Counsel), to head his legal dispute with the Premier League. However, with the announcement of the takeover, he has now pulled out of the arbitration hearing originally set for January 2022.
One of the other reason for the initial bid's failure was also due to piracy claims from BeIN Sports, owned by neighboring Qatar and headed by PSG President Nasser Al-Khelaifi. BeIN Sports holds the broadcast rights for the Premier League, UEFA and FIFA competitions for the Middle East and Africa in a deal which runs till 2025.
The piracy scandal could be traced back to when Saudi Arabia, the United Arab Emirates (UAE), Bahrain and Egypt cut ties with Qatar following allegations it supported extremists and was also too close to the Islamic Republic of Iran. Although the allegations were denied, Saudi Arabia went on to ban BeIN Sports in the kingdom.
BeIN Sports proceeded to send a list of websites to the Saudi Arabian government, informing them of the piracy of their content in the kingdom. Qatar also accused Saudi Arabia of failing to take effective action against the alleged piracy by pirate broadcaster BeOUTQ.
In 2018, Qatar proceeded to file an official complaint with the World Trade Organisation (WTO) stating "Our website is still blocked in Saudi Arabia and we have received no official communication from the Saudi authorities to suggest that our license has been reinstated."
Premier League CEO Richard Master got involved in 2020, stating in a letter that intellectual property rights were "critically important to the league's commercial interests."
As a result of all this pressure, Saudi Arabia has lifted its 4-year ban on BeIN Sports, which meant that the company could broadcast legally again in the kingdom. Saudi authorities also promised to shut down all illegal websites in the country, and also to pay $1B in damages to BeIN Sports.
The takeover bid has also faced opposition from human rights groups. Amnesty international has voiced its opposition to the takeover, telling the Premier League to take into account the kingdom's abysmal human rights record. Crown Prince Mohamed Bin Salman was also revealed by US intelligence to be behind the murder of journalist Jamal Kashoggi in 2018.
The initial takeover bid failed the initial Owner's and Director's test primarily because the consortium failed to separate itself from the Saudi state. That has now been resolved, and the Premier League has received assurances that the state will not be involved in the day to day running of the club.
The takeover has proved to be immensely popular with Newcastle supporters. A poll by the Newcastle United Supporters' Trust found that almost 94% of its members were positive of the takeover bid.
The new owners' immediate priorities are two-fold. Firstly, they want to bring in a manager with quality, which basically would mean the end of Steve Bruce's reign at Tyneside (their first choice is AS Roma manager Jose Mourinho). Secondly, they want to plan for a stadium upgrade/redevelopment within the next couple of years.
As the club are currently without a win after 8 games in the Premier League, the new owners will have a challenge on their hands to fulfill their stated ambition of "We can be as big as PSG."
Time will tell how committed the owners are in bringing the club to that level.