The fans celebrated the deal like a title win: All of a sudden, the English Premier League bottom Newcastle United became the richest football club in the world. With the takeover at the beginning of October, the Saudi Arabian state fund PIF (Public Investment Fund) owns around 80 percent of the traditional association from the English northeast. Ten percent each goes to the companies RB Sports & Media and PCP Capital Partners.
The change in ownership is said to have brought the club around 360 million euros, according to a report by the sports magazine The Athletic”. The agreement marks the brilliant end of an 18-month negotiation and legal dispute with the Premier League. The reason for the legal scramble was the question of who would pull the strings after the takeover “Toon” would hold in hand. In the end, the binding promise was given that the Kingdom of Saudi Arabia would not control the association.
Football as a diversification strategy
“PIF is essentially a state savings account for the Saudi Arabian government”writes the British BBC. After all, the PIF’s chairman is none other than Crown Prince Mohammed bin Salman. The 36-year-old heir to the throne is accused of numerous human rights violations. Last stood “MBS” under international criticism for the alleged murder of journalist Jamal Khashoggi.
The takeover costs of 360 million euros represent only a fraction of the financial power of the new owner consortium led by Saudi Arabia. According to media reports, the new owners have a total financial volume of several hundred billion euros – which is by far the wealth of the richest club owners to date puts it in the shade. As a Saudi Arabian sovereign wealth fund, PIF earns most of its money from oil exports.
Arab investors see buying into top European football as a long-term investment, explained football expert Professor Simon Chadwick from the Emlyon Business School to the BBC. But last but not least, the billion dollar business of football also serves to exert political influence, according to Chadwick: “When you own a football club, you can develop relationships with key stakeholders”.
However, Arab money is not only used for sport. The purchase of Newcastle United for PIF is just one of many diversification strategies. The fund has invested in some of the world’s best-known brands, according to the BBC, including Disney, Uber, Facebook, Starbucks and the pharmaceutical company Pfizer.
But Arab investors are not the only investors in top football. The ultra-rich have been investing billions in sport for a long time. A look at men with very deep pockets.
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I have been working in the news industry for over 6 years, first as a reporter and now as an editor. I have covered politics extensively, and my work has appeared in major newspapers and online news outlets around the world. In addition to my writing, I also contribute regularly to 24 Hours World.
