Takeover of Newcastle United by Saudi PIF
Mohammed bin Salman and the Premier League: more than a game

The takeover of English football club Newcastle United by the Saudi Public Investment Fund is more than an attempt by the Kingdom to boost its own image. There are strategic economic interests behind the deal. Saudi Crown Prince Muhammad bin Salman is also looking to consolidate his position at home. By Sebastian Sons

On 7 October, when English football’s Premier League confirmed the outcome of 18 months of negotiations, it unleashed a storm of indignation, but also a wave of euphoria: after vetting by the Premier League, the Saudi Public Investment Fund (PIF) had acquired over 80 percent of the long-established, top-flight English club Newcastle United (NUFC) – dropping a bombshell on the English football industry.  

The takeover turned Newcastle United into one of the "big players" of world football almost overnight: with an estimated fortune of 400 billion U.S. dollars, the PIF investment fund ranks eighth on the list of the wealthiest state funds in the world. It has invested in several international companies such as EA Sports and Uber, and is financing countless giga-projects within Saudi Arabia, in an effort to drive forward the Kingdom’s economic transformation.

Following the announcement of the takeover, some bizarre scenes played out among some of Newcastle’s fans: 5000 supporters, a number of them dressed in the Thawb, the traditional Saudi robe, launched into wild celebrations of the club’s purchase by PIF, seeing it as the start of a new era – particularly after 14 years under the previous owner, Mike Ashley, which they regarded as a depressing period of decline. A supporters’ representative even spoke of an almost 97 percent approval rate for the deal.

Yet the takeover also came in for severe criticism from other quarters: PIF, after all, is led by no less than the controversial Saudi Crown Prince Muhammad bin Salman (MbS), who has fallen out of favour in recent years due to the military intervention in Yemen and his alleged involvement in the murder of Saudi journalist Jamal Khashoggi. PIF’s investment policy therefore also serves to consolidate the dominance of the powerful crown prince.

Emerging from the shadow of rivals

Seen in this context, the takeover is both a personal and a strategic victory for MbS: it shows that under his leadership, Saudi Arabia has the ability to join the major players of sporting politics. the Kingdom has long been trying to turn itself into an internationally recognised actor in the football industry – though until now, with only modest success. With the takeover of Newcastle United, MbS also intends to emerge from the shadow of his established rivals in the footballing world.

Fans protest against Newcastle's previous owner Mike Ashley at the Premier League match Newcastle United vs Burnley (photo: picture-alliance/empics/R.Sellers)
"Ashley out": Newcastle United's previous owner, Mike Ashley, is more than unpopular with sections of Newcastle fans. After the announcement of the takeover of the soccer club by the Saudi sovereign wealth fund PIF, they "launched into wild celebrations of the club’s purchase by PIF, seeing it as the start of a new era – particularly after 14 years under the previous owner, Mike Ashley, which they regarded as a depressing period of decline," writes Sebastian Sons. "One fan representative even spoke of an almost 97 percent approval rating for the deal." On the other hand, the takeover was massively criticised because PIF is led by the controversial Saudi Crown Prince Muhammad bin Salman

First and foremost among these is the United Arab Emirates (UAE): in 2008, Abu Dhabi United Group, headed by the UAE’s deputy prime minister Prince Mansour bin Zayed Al Nahyan, a high-ranking member of the ruling family, began its financial involvement with Manchester City. Since then, the owners have rescued the club from the lower regions of the table, jazzed it up and turned it into a top international side.

Saudi Arabia is pursuing the same goal with Newcastle. The Kingdom is trying to copy and perfect the UAE’s strategic approach in many economic areas, which has led to more intense competition between the two states. Investments such as the one in Newcastle are an example of just how much energy MbS is putting into establishing his kingdom as the undisputed number one location for doing business in the Middle East. He is pumping billions into reshaping the economy, the national tourism sector, and the entertainment business – and football is part of this all-in strategy.

Over and above this, buying a renowned club with a long history is intended to restore his own reputation. There has been a boom in "sportswashing" in the Gulf states, of which the allocation of next year’s Football World Cup to Qatar is a striking example. Saudi Arabia, too, hopes the takeover will give it an image boost. But despite the NUFC supporters‘ declarations of approval for Saudi Arabia, this calculation remains a risky game: human rights organisationsmembers of opposing fan groups and large sections of the British and international media are using the takeover to bring renewed attention to human rights violations in the Kingdom, and the Khashoggi murder.

Another focus of heavy criticism is that the crown prince is also the head of the PIF state fund, although the Premier League has given assurances that the Saudi state will have no influence over the club’s policies – a farce, as most observers have commented. This criticism has damaged the Saudi PR campaign: instead of showing the Kingdom in a better light, its shortcomings have once again become a focus of public attention.

The purchase as a vehicle for Saudi identity politics

Saudi Arabia takes a relaxed view of these hostile reactions. It would argue that the entry of Emirati investors into Manchester City, or of the Qatari investment fund into Paris St. Germain, was greeted with similar hostility, but the dust has now settled over these investments. The Saudis expect the same to happen with Newcastle. And many people in the Kingdom see the takeover as a glittering success by their crown prince. The purchase adds to his image as a moderniser, who is managing to lead a kingdom weighed down with tradition into a new era, to open it up and modernise it.

Remembering the murdered Saudi journalist Jamal Khashoggi in Turkey (photo: picture-alliance/AA/M.E.Yildirim)
R.I.P. Jamal Khashoggi: the murder of Khashoggi in the Saudi consulate in Istanbul and the military intervention in Yemen have both had a massively negative impact on the reputation of powerful Saudi Crown Prince Mohammed Bin Salman. The investment policy of the Saudi sovereign wealth fund PIF may also be seen as an attempt to rehabilitate his tarnished image in the eyes of Western public opinion. "The purchase (of Newcastle United) adds to his image as a moderniser, who is managing to lead a kingdom weighed down with tradition into a new era, to open it up and modernise it," writes Sebastian Sons

The investment in NUFC thereby also functions as an effective tool for Saudi identity politics: Newcastle is to be regarded as a symbol of the "new Saudi Arabia", which is freeing itself from old conventions. In this, MbS is taking over the role of "father of the country", who is making this transformation possible, in the process turning sport into a nationalistic all-purpose weapon, to manifest support among the largely young Saudi population.

Furthermore, the takeover needs to be seen as a hard-hitting investment policy, driving forward the country’s economic diversification. Following the example of its rivals from the UAE, the Kingdom intends its purchase of Newcastle United to prepare the way for a broad-based investment offensive in the UK. Its first source of help in this is a partnership with Reuben Brothers, a British property firm, which has taken over 10 percent of NUFC as part of the consortium.

PIF hopes that this co-operation will enable it to buy profit-making real estate in Newcastle, which will broaden its investment portfolio. The UAE pursued a similar strategy in Manchester. Newcastle’s geographically advantageous position in the north of England, on the River Tyne, also gives PIF the potential to make purchases in local container ports, increasing its maritime presence in Europe. Saudi Arabia has already invested in other ports, to improve its connections with European and international maritime routes.

In this sector, too, the Kingdom is following the Emirati example; the UAE has already built an international empire in the maritime logistics business with its logistics company DP World. PIF also wants to use Newcastle as an advertising platform with wide appeal: Saudi Arabia is planning to create a new airline, which could function as a shirt sponsor for NUFC. It is something the Emirati owner of Manchester City has already done, placing the logo of the national carrier Etihad Airways on its kit.

Resistance from the top English clubs

But there is resistance to such plans: other top English clubs like Liverpool, Manchester United and Chelsea, all run by foreign owners, regard the Saudi takeover of Newcastle as a declaration of war.

For this reason, they called an emergency meeting with the Premier League, hoping to defend themselves against the potential dominance of the newly rich club from the north of England, and to prevent such forms of indirect sponsorship in the future. 18 of the 20 Premier-League clubs agreed to this proposal, while Newcastle unsurprisingly rejected it.

Despite these challenges, there are rumours in Saudi Arabia that the takeover of Newcastle might just be the beginning of a major investment offensive in sport by PIF. Documents confirm that, in recent years, Saudi Arabia has also shown interest in buying the Italian top-flight club Inter Milan. There are also speculations that it is taking steps to invest in France’s Olympique Marseille, though so far the club has denied this.

The intention behind this may be to build a global franchise business, partly to achieve economic aims, but also to serve as talent development for young Saudi players, who could be trained by partner clubs. In any case, Saudi Arabia wants to make its own league more attractive in future, rather than just investing in foreign football clubs, and to professionalise its training programme to give the national team a better chance of success in future World Cups. This way, it may eventually be able to turn a great dream into reality and host a World Cup itself – just as Qatar will do next year.

Sebastian Sons

© Qantara.de 2021

Translated from the German by Ruth Martin

Sebastian Sons is a researcher and expert on the Arab Gulf States at the Bonn-based research institute CARPO. He completed his doctorate on Pakistani labour migration to Saudi Arabia and is the author of the non-fiction book – "Auf Sand gebaut. Saudi Arabien - Ein problematischer Verbündeter.

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