Saudi Arabia’s sovereign wealth fund on Thursday struck a deal to acquire Newcastle United in the English Premier League, giving it a foothold in the world’s most popular sports enterprise after more than two years of on and off talks.
The investor group, led by Saudi Arabia’s Public Investment and including British financier Amanda Staveley and the billionaire Reuben brothers, had pulled out of a $380 million deal last year after the Premier League spent months scrutinizing the Saudi state’s involvement.
This time, however, the Premier League has received “legally binding assurances” that the club will not technically be controlled by the Saudi crown, but rather the sovereign-wealth fund. Though the distinction appears minor, people close to the transaction said it had held up the deal for more than a year. The club’s non-executive chairman is set to be Yasir al-Rumayyan, the head of the Public Investment Fund, which is chaired by Prince Mohammed.
The transaction, first reported by The Wall Street Journal in early 2020, has been one of the thorniest in the history of the Premier League, drawing objections from camps as diverse as human rights groups and the Qatari state.
One major hurdle was opposition from the national sports broadcaster of Qatar, BeIN Sport. BeIN had accused Saudi Arabia of running a state-backed piracy operation to steal its content. The broadcaster is one of the Premier League’s largest buyers of television rights, shelling out some $500 million for the most recent three-year cycle of television rights for the Middle East and North Africa region. Under Saudi Arabia’s diplomatic boycott of Qatar, BeIN had been banned from operating in the Kingdom.
Saudi Arabia reversed its position on Wednesday as officials indicated that it would lift the ban on BeIN’s content, which had been the broadcaster’s main objection to the Newcastle takeover, according to a person familiar with its thinking.
The Premier League had backed BeIN, submitting evidence of piracy in Saudi Arabia to the World Trade Organization. But as the Saudi-led group closed in on an agreement with the league, it informed BeIN that it would be granted a license to broadcast inside the kingdom. That should come in time for viewers in Saudi to watch what would be Newcastle’s first match under Saudi-ownership, against Tottenham Hotspur on Oct. 17, through legitimate channels.
The revival of the transaction is a coup for Saudi Arabia as Crown Prince Mohammed bin Salman puts sports and entertainment at the center of a national economic and social transformation. The Premier League is broadcast in more than 200 countries and territories and has already been used as a shop window by several of Saudi’s neighbors in the Gulf, with a member of the royal family of Abu Dhabi acquiring Manchester City in 2008 and the Dubai-based Emirates airline becoming a major sponsor of Arsenal.
“This is a long-term investment,” Staveley said. “Our ambition is aligned with the fans–to create a consistently successful team that’s regularly competing for major trophies and generates pride across the globe.”
How long Saudi might have a foothold in the Premier League remains to be seen. Newcastle has struggled in recent seasons, under its deeply unpopular owner Mike Ashley. The club currently sits in 19th place with zero victories after seven games and would be in danger of demotion to English soccer’s second tier.
Newcastle has struggled in recent seasons, under its deeply unpopular owner Mike Ashley.
Photo: lindsey parnaby/Agence France-Presse/Getty Images
Yet on a geopolitical level, the deal for a soccer team in the Northeast of England also notches a win for the Saudi Crown Prince’s more recent strategy to engage diplomatically with adversaries such as Qatar and Iran.
Riyadh earlier this year reopened its airspace and land and sea borders to Qatar, and signed an agreement to end a three-year-old blockade of the tiny Gulf state. Saudi Arabia, the United Arab Emirates, Bahrain and Egypt accused Doha in 2017 of supporting terrorism and aligning with Iran, a charge Qatar denied. But in addition to the detente around BeIN Sports broadcast, Riyadh will also host the Qatar-owned club Paris Saint-Germain in an exhibition game at the end of this year.
Qatar’s objection to the Newcastle deal wasn’t the only obstacle. Human rights advocates argued that a takeover led by Saudi’s Public Investment Fund, the main investment vehicle for Prince Mohammed, would be designed to whitewash the kingdom’s global image following the 2018 murder of journalist Jamal Khashoggi.
During its six months examining the deal, the Premier League didn’t comment on its criteria to sign off the deal and never formally rejected the consortium. But its “Owners and Directors Test” gives the league power to disqualify investors for “offense involving any act which could reasonably be considered to be dishonest” or a “directly analogous offence in a foreign jurisdiction,” according to the league’s handbook.
Rights groups had argued that language gave the soccer governing body plenty of latitude to reject the takeover.
“The Premier League is putting itself at risk of becoming a patsy of those who want to use the glamour and prestige of Premier League football to cover up actions that are deeply immoral,” Amnesty International wrote in a letter to the Premier League.
Newcastle United players celebrate a goal during a recent match against Wolverhampton.
Photo: Rui Vieira/Associated Press
Write to Joshua Robinson at Joshua.Robinson@wsj.com, Summer Said at summer.said@wsj.com and Rory Jones at Rory.Jones@wsj.com
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