Saudi Arabia recently joined its neighbours, Qatar (Paris Saint Germain) and the UAE (Manchester City), in the upper echelons of football ownership with its purchase of Newcastle United.
The biggest question surrounding the Newcastle takeover is how it passed the Premier League’s so called ‘fit and standards’ test which was designed to prevent individuals associated with allegations of wrongdoing from owning a football club.
The argument put forward by Amanda Staveley, a part owner of Newcastle, and the person responsible for the deal, is that the club would be owned by the PIF and not the Saudi State.
It took a couple of attempts but Saudi Arabia’s Public Investment Fund (PIF), Britain’s PCP Capital Partners and Britain’s RB Sports and Media were successful in convincing the Premier League to accept their bid to takeover Newcastle United from Mike Ashley for a reported sum of 300 million pounds.
PIF will reportedly hold 80% of the shares for the club. The move has received varied responses, but the biggest issues with the takeover have revolved around how Saudi Arabia invests its money.
Most of fans are happy to see owner Mike Ashley exit the club. Over the past few years, Ashley has presided over one of Newcastle’s worst phases in their history.
Ashley would also use the club to further his own business interests in his 14-year reign. Newcastle last won a major trophy in 1955 (The FA Cup) and the league title in 1927. Under him, the club has grossly under-invested in their team and have been relegated twice.
PIF has been active since the 1970s and has taken the bulk of savings that Saudi Arabia has made from their sale of oil. The fund has amassed $430 billion and therefore has the capacity to make an investment of 300 million pounds to take over Newcastle
This isn’t the first attempt that PIF had made to acquire Newcastle. Only last year did a bid fall after major legal battles. The primary issue with the Premier League not sanctioning the takeover was to do with piracy, Saudi Arabia and Qatar. Initially the Premier League had believed that Saudi Arabia was a major backer of online piracy.
Newcastle’s new owners could realistically spend over 150 million pounds on new talent next year.