LONDON — Saudi Arabia’s sovereign wealth fund has come close to buying a Premier League football team after the kingdom reached a deal that resolved the league’s biggest objection to the proposed sale of Newcastle United.
A $400 million deal in which Newcastle owner Mike Ashley would transfer control of the team to an ownership group led by the Saudi Arabian Public Investment Fund was reached more than a year ago. However, the sale collapsed after a years-long dispute between Saudi Arabia and the Qatar-based television network beIN Media Group, which owns the broadcast rights of the Premier League in the Middle East.
Saudi Arabia had barred beIN from operating within its borders since 2017 amid a diplomatic dispute with its small but immensely wealthy neighbor, Qatar. BeIN, the Premier League, and other major sports property owners later accused Saudi Arabia of hosting and operating a pirate television network, pirating billions of dollars worth of content sold to a Qatari broadcaster.
The Newcastle sale was drawn into this dispute last year when beIN officials lobbied Premier League officials and the British government not to approve the takeover. The league has never had to make a decision: The Saudi group, facing increasing public pressure, referred to an “unpredictable long process” withdrew his offer.
Last year, Saudi Arabia, Qatar and a group of neighbors ended the three-year blockade of Qatar and re-established diplomatic and economic relations. normalization of diplomatic relations.
Under Premier League rules, prospective buyers of league teams are required to meet the appropriate and appropriate standard required of new owners. The group involved in the Newcastle takeover, which includes British businesswoman Amanda Staveley and two billionaire property investor brothers, walked away after the league negotiated the sale for months.
The most problematic issue for the Premier League at the time was the proposal to sell one of its members to an entity that the league itself blames. damage the business of an important trading partnerr. With an agreement To settle the beIN piracy dispute on the spot, there is nothing in Premier League rules that prevents a team from selling to an entity that is an arm of the nation-state. For example, the reigning Premier League champions Manchester City is controlled by a member of the United Arab Emirates’ ruling family.
Smoothing the path to a sale can also be a separate legal issue. In May, Ashley was infuriated by the collapse of the deal to sell Newcastle filed a lawsuit He is demanding millions of dollars in damages against the Premier League and accusing the league of obstructing the sale. The Premier League was not known to block a sale before, and with the Saudi group’s withdrawal it became clear that Ashley did not do so with Newcastle, despite allegations.
The Saudi takeover will be the latest infusion of sovereign Gulf money into European football, and will not only have City owners, but also Qatar’s French champion Paris St.-Germain. The seemingly bottomless resources of these ownership groups have since built teams that have ranked among the best in Europe and reshaped the modern football economy.
Long-suffering fans of Newcastle are hoping to enjoy the same rapid rise since news about Saudi interests first surfaced. Fans of the club took to social media by the thousands to support the sale, signing petitions and even taking legal action against the Premier League to further the takeover.
Newcastle narrowly missed the Premier League title twice in the mid-1990s, but haven’t won a major domestic trophy since the 1955 FA Cup. The last of the club’s four British titles came in 1927, and the club’s more recent history has been dominated by fan opposition against retail mogul Ashley, who bought the team in 2007.
Saudi-led investors had offered to spend as much as $320m over five years to transform Newcastle into a Premier League competitive powerhouse and invest in infrastructure around its stadium.
While the magnificence and global reach of the Premier League have long made it a magnet for the world’s super-rich – owners now include American billionaires, a Russian oligarch, a Chinese holding company and a Gulf royalty – the Saudi state is likely to buy led to scrutiny. never seen before.
When the deal was first announced, human rights groups and even the widow of murdered journalist Jamal Khashoggi urged Premier League CEO Richard Masters to block the sale because of the Public Investment Fund’s involvement. It is led by Crown Prince Mohammed bin Salman, the de facto ruler of Saudi Arabia.
Such criticism is likely to resurface if Saudi Arabia revives and completes its deal with Ashley.
Buying into a major international football league with global reach will follow similar recent pressures on the sports industry by Saudi Arabia. The kingdom has planned for years to develop its economy beyond oil, and sports and entertainment have emerged as key parts of a broad investment strategy. Millions of dollars have been spent so far to attract boxing, golf and motorsport events to Saudi Arabia, but officials realize that none of them have the appeal of football.
Earlier this year, the head of the country’s football federation urged FIFA to examine the possibility of increasing the frequency of the men’s World Cup every two years instead of four. Saudi Arabia works behind the scenes to win rights hosting the event.