Futbol Finance: Newcastle United Becomes Richest Club in the World
(via Scott Heppell/Associated Press)
After years of Newcastle fans wanting Mike Ashley to sell the club, the Magpies fans now have their wish granted as Saudi Arabia’s Public Investment Fund (PIF) have completed the purchase of the club for 300 million pounds ($409 million). This purchase now makes Newcastle not only the richest club in the Premier League by a large margin, but also the richest club in the world. To put into perspective just how much money the club has, you could combine the assets of all of the other owners in the Premier League and Newcastle’s owners would still have more money. They are worth a reported $435.8 billion, which means the takeover of Newcastle is only about 0.09% of the fund’s total value. The next richest owner is Manchester City’s Sheikh Mansour, who is worth about $31.2 billion. Since Pep Guardiola has taken over at Man City in 2016, the club has spent close to a billion pounds on transfers. Newcastle’s owners have over 10 times the assets that Mr. Mansour has, so this takeover can bring a power shift in the Premier League along with potentially world football.
Last year, PIF were close to acquiring Newcastle but there were some obstacles they had to get over. There were concerns from the Premier League about how much control the Saudi state would have in running the team. Part of the agreement to buy the team included an assurance that Saudi Crown Prince Mohammed bin Salman and the state would not have a say in the team. Another obstacle in the takeover is that since 2017, Saudi Arabia has blocked the Qatari sports network BeIN Sports, one of the Premier League’s biggest broadcast partners, from operating within its territory due to the conflicts between Qatar and Saudi Arabia. Qatar have also accused
Saudi Arabia of failing to take effective action against piracy of BeIN’s content. Saudi Arabia have now overturned the ban on BeIN in the kingdom which has helped clear the path for the takeover of Newcastle.
PIF becomes 80% owners of the club with the Reuben brothers and PCP Capital Partners owning the other 20%. This deal is akin to when Manchester City and PSG were taken over by state-owned funds. Since PSG and Manchester City were taken over by these state-owned funds, they have enjoyed much success on a domestic level, although both clubs are still seeking European glory. We’ve seen both clubs open up the checkbook and spend heavily since the new owners have come in. PSG have shattered the transfer record with the signing of Neymar in 2017 along with the signing of Kylian Mbappé the next summer. Of course, this past summer saw PSG have arguably the best transfer window ever with the signings of Lionel Messi, Sergio Ramos and Achraf Hakimi to name a few. Man City on the other hand, have spent over a billion pounds since Mansour has taken over and continue to break transfer records in the Premier League. Just this past summer, we saw them break the record for most expensive English player ever when they captured the signing of winger Jack Grealish for $129 million.
While the takeover from PIF will be well received by many Newcastle fans, human right organizations have made their objections to the deal and have called on the Premier League to change the rules to ensure that those accused of human rights violations cannot take charge of soccer teams. Along with that, many soccer fans across the globe do not like that clubs can be owned by states and the money they are injecting in the club.
Many Newcastle fans were seen outside of St. James Park celebrating the takeover as they had enough of Mike Ashley holding the club back. Certainly, PIF’s takeover of the club should mean that Newcastle will soon be playing for trophies as we’ve seen after PSG and Man City went from mediocre clubs to two of the top clubs in the world. Newcastle are already being linked to players like Philippe Coutinho and managers like Antonio Conte, something Newcastle fans could have never imagined under the ownership of Mike Ashley. It is to be determined how Newcastle will plan to use the money and how much they will spend, but it is exciting times for Newcastle fans and it should make the Premier League even more competitive than it already is.
Greg Termolle is a 2L at Pace Law. He can be followed on Twitter @Gregterm.