Newcastle owners PIF U-turn in talks over £820m deal that will cause controversy at Premier League HQ
Adam Williams
7 – 8 minutes
When the Premier League’s lawyers finally approved PIF’s takeover of Newcastle United, it marked the start of a new era not just on Tyneside but in world football.
Since establishing their enclave of Saudi Arabia in the North East, the Public Investment Fund (PIF) have made Newcastle the subjects of global discourse in geopolitics.
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Football has always been a vehicle for the ultra-rich and ultra-powerful to wield cultural influence, but the entry of sovereign wealth funds with cryptic and esoteric aims is a new phenomenon.
Infographic explaining the role of sovereign wealth funds in football, citing the owners of Newcastle United, Manchester City, and Paris Saint-Germain
For their part, PIF insist that they run Newcastle as they would any other business. That is a dubious claim.
PIF manage assets worth in the region of £750bn and a football club with annual turnover of £250-300m in a good year is probably in the bottom five per cent of their revenue-generating properties.
It is also highly unusual – if not unprecedented altogether – for PIF governor Yasir Al-Rumayyan to be directly involved in day-to-day operations at one of the fund’s smallest businesses.
Yasir Al-Rumayyan, Governor of Saudi Arabia’s Public Investment Fund looks across the practice range ahead of day one of the Alfred Dunhill Links C…
Photo by Richard Heathcote/Getty Images
It was even more abnormal for the crown prince of Saudi Arabia himself, Mohammed bin Salman, to have lobbied the UK government to lean on the Premier League to approve the takeover.
Why then have PIF invested in the Magpies and what, when the fog on the Tyne clears, do they want to have achieved at St James’ Park in a few years time?
It’s partly about power, influence and, yes, sportswashing.
However, the likes of Simon Chadwick, Professor of Sport and Geopolitical Economy at Skema Business School, argue that PIF’s project in Newcastle is not a solely a vanity project to launder the state’s image.
Granted, Newcastle chairman Al-Rumayyan has made an ally in Donald Trump since the takeover, with whom he has been discussing the potential merger of PIF’s LIV Gold and the PGA Tour.
The images of the pair sat together at UFC 309 alongside Dana White, UFC’s CEO who Mark Zuckerberg has just appointed to the board at Meta, tell you all you need to know about the power of sport.
(L-R) His excellency Yasir Al Rumayyan talks with former U.S. President Donald Trump during the pro-am prior to the LIV Golf Invitational – Bedmins…
Photo by Jonathan Ferrey/LIV Golf via Getty Images
But, Chadwick suggests, Newcastle aren’t just a cultural foothold in football.
“The smash-and-grab mentality at Paris Saint-Germain or Manchester City is absolutely not the case at Newcastle,” he said last year, when there were suggestions PIF’s interest in the club was waning.
“Just look at the considered development of the commercial team. The people they’ve brought in are experts with strong background in the areas they’ve been appointed in.
Chart comparing Newcastle United’s squad cost, which is made up of wages plus amortisation, to their annual revenue
“It’s obvious to me that Saudi Arabia acquired an investment asset, not a vanity project. I’ve said for a while now that if there comes a point where they need to sell it they will sell it.”
Whatever PIFs aims, they are currently being obstructed by the Premier League, who have taken a handful of Arabian Desert sand and deposited it in the gears of the state-backed Newcastle machine.
Profit and Sustainability (PSR) and Associated Party Transaction (APT) Rules represent a ceiling to their ambitions, the kind that doesn’t exist as a factor in the Saudi Pro League or 2034 World Cup plans.
Infographic explaining the PSR (Profit and Sustainability Rules, formerly known as FFP) for Premier League, Championship and UEFA clubs
But the world of football finance never sleeps. This week, PIF are negotiating another deal that could see them increase their power in the Premier League in a very different way.
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PIF in talks to acquire Premier League broadcaster
Newcastle’s owners have a fractious relationship with Richard Masters and the Premier League’s central office.
Things got off to a rocky start when the league refused to ratify PIF’s takeover because of complaints from one of its broadcasters – Qatar-based beIN SPORTS – about media piracy of their coverage in Saudi.
A fan of Newcastle United hold a flag of Saudi Arabia during the Premier League match between Newcastle United and Tottenham Hotspur at St. James P…
Photo by Robbie Jay Barratt – AMA/Getty Images
The rest is history, of course, and the Premier League eventually approved the deal.
But Newcastle have since taken umbrage with the league’s commercial rules, giving evidence in favour of Man City in the recent round of APT lawfare in the arbitration courts.
Infographic detailing the Premier League’s Associated Party Transaction (APT) rules
Now, the Magpies’ owners could potentially spark more controversy at Premier League HQ with a minority investment in Premier League broadcaster DAZN worth £820m.
DAZN own the TV rights for the competition in Spain and Portugal and, after acquiring media privileges for the 2025 Club World Cup, has been mooted as a potential domestic Premier League rightsholder.
Incidentally, this move was predicted by Liverpool University football finance lecturer Kieran Maguire when he spoke exclusively to TBR Football late last year.
A general view during the UEFA Champions League match between Newcastle United FC and AC Milan at St. James Park on December 13, 2023 in Newcastle …
Photo by Harriet Massey/Newcastle United via Getty Images
As reported by Bloomberg, PIF are in advanced negotiations to invest in London-headquartered DAZN in a reversal of their stance a few weeks ago, when they said they had not engaged in talks with the firm.
Although not unprecedented, a group being both a rightsholder and an owner of a Premier League club would likely raise some conflict of interest concerns.
But it is emblematic of just how interconnected football’s business ecosystem has become.
For example, Comcast, who own the Premier League’s primary broadcaster Sky Sports, are the main funders of Atairos, the private equity firm that in turns owns a 31.1 per cent stake in Aston Villa.
Map showing the nationalities of every owner or co-owner in the Premier League
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Could PIF sell Newcastle United?
If, as PIF maintain, they want to run Newcastle as they would a traditional investment, that invites the possibility that they could one day sell the club for a profit.
Yasir Al-Rumayyan, chairman of Newcastle United, during the Premier League match between Newcastle United and Leicester City at St. James Park on M…
Photo by James Gill – Danehouse/Getty Images
If they were to cash in tomorrow, the soaring valuations of Premier League clubs coupled with the infrastructure and squad upgrades PIF have made could in theory make them a tidy profit already.
The takeover that saw them acquire an 85 per cent stake in 2021 was worth £305m. When Amanda Staveley sold here six per cent stake last year, the deal with Reuben Brothers valued the club at £1bn.
Amanda Staveley attends the UEFA lunch between Milan and Newcastle at Ristorante Cracco on September 19, 2023 in Milan, Italy
Photo by Alessandro Bremec/NurPhoto via Getty Images
Whether there would actually be a market for the club at that price is another question.
In any case, PIF insist they are in it for the long haul and, with the owners spending the maximum amount allowed under PSR every season, there is currently no reason to doubt that.
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