Saudi Public Investment Fund Purchases Newcastle United
Tomas Beariault ‘25
On Thursday October 7th, 2021, thousands of fans flocked to St. James Park, to celebrate the takeover of their soccer team, Newcastle United, by the Saudi Arabian Public Investment Fund. Most fans of the historic North Eastern English club were sporting the classic Newcastle black and white colors, but some were wearing tea towels over their heads and brandishing Saudi Arabian flags. After 14 years of unpopular ownership, the fans were ecstatic to finally have the opportunity to support a team competing at the highest level of English soccer, as they believe a club with such a great size and history should be.
The 300-million takeover had been pursued since 2017, but a legal battle that began in April 2020 had prevented the club from switching ownership for 18 months. On April 20, 2020, it was revealed that a consortium, made up of the Saudi Arabian Public Investment Fund (PIF) (80%), the Reuben Brothers (10%), and Amanda Stavelely (10%). The PIF, the majority stakeholder in the club, is the sovereign wealth fund of Saudi Arabia and one of the largest sovereign wealth funds in the world with close to $430 billion in assets. It is a central part of the ongoing efforts to diversify Saudi Arabian revenue streams in order to reduce their oil dependency.
The chairman of the PIF, Crown Prince Mohamed Bin Salman (also known as MBS) has been leading efforts to modernize and diversify the Saudi economy, and he was at one point seen as the potential reformer of Saudi society. However, MBS’s reputation was severely tarnished after his possible role in the killing of Saudi journalist Jamal Khashoggi, and because of other human rights abuses connected to the government of Saudi Arabia. Following the initial reports of the PIF’s bid to buy Newcastle, various human rights groups raised concerns of sportswashing, the practice of using sporting events, team acquisitions, or participation in sports to improve the public image of an individual, group, corporation, or country. These accusations centered around MBS’s involvement in the killing of Khashoggi, the Yemeni Civil War and subsequent humanitarian crisis, and a general crackdown of critics of the Saudi Arabian monarchy. By acquiring and investing in one of the biggest sports teams in the UK, MBS could be hoping to first gain the support of Newcastle fans and eventually regain some credibility in the UK and internationally.
From April 2020 to July 2020, the English Premier League was conducting the Owners’ and Directors’ Test, which is intended to prevent individuals that are involved in criminal activity, match fixing, or various other breaches of football regulations. By July 30th, the PIF led consortium had pulled out of the deal after it became clear that they had not passed the Owners’ and Directors’ test. The Premier League’s statement revealed that they had blocked the takeover because of insufficient legal separation between the PIF and the Saudi Arabian government. This was an issue for the Premier League because of alleged state-sponsored piracy of Premier League games on television that had been occurring in Saudi Arabia.
After the reports first came out of the Owners’ and Directors’ test, beIN Sports, a major Qatari sports broadcaster, wrote to the Premier League stating concern with the PIF’s bid to acquire Newcastle United. beIN Sports has the sole rights to broadcast the Premier League in the middle east and north africa regions (MENA), and they alleged that the Saudi Arabian government was linked to beoutQ, a large scale piracy operation in Saudi Arabia that was illegally distributing their content. To understand why the Saudi Arabian government may have had ties to beoutQ and at the very least didn’t make efforts shut it down, it is necessary to understand a little bit about Qatar-Saudi relations. Historically, Saudi Arabia has been the most powerful country on the Arabian Peninsula, and the small adjacent country of Qatar was a sort of Saudi vassal state but in recent years Qatar has been using its abundant hydrocarbon resources to assert political independence in the Middle East and globally.
In June 2017 after years of rising tensions between the two countries, Saudi Arabia officially cut all ties with Qatar, citing Qatar’s “embrace of various terrorist and sectarian groups aimed at destabilising the region,” including the Muslim Brotherhood, the Islamic State, al-Qaeda, and groups supported by Iran in Saudi Arabia’s eastern province. One measure that the Saudi government implemented as part of this cut in ties was the banning of beIN broadcasts from being shown in Saudi Arabia. Only about three months later, beoutQ was launched to repackage and distribute beIN content in Saudi Arabia through pirated satellite signals and beoutQ set-top boxes. Included in the pirated broadcasts were often anti-Qatar propaganda. beIN’s investigation into beoutQ traced the piracy back to a prominent Saudi satellite provider Arabsat, whose largest investor is the Saudi Arabian government. In addition, prominent Saudis promoted the service on social media, including an advisor to the royal court. But in August 2019, beoutQ ceased operations for reasons that are unclear.
In January 2021, after four and a half years of isolation from Saudi Arabia and some of its Middle Eastern allies, Qatar and Saudi Arabia agreed to normalize their relations. In October 2021, Saudi Arabia agreed to lift their ban on beIN Sports. It is reported that the agreement was a concession in the negotiations with the Premier League because the sale of Newcastle United to the Saudi-led consortium was approved by the Premier League the very next day.
In the past two decades, state owned enterprises from around the world have sought to exert influence and advertise through sport, one notable example being the world of European soccer. The two biggest examples are Manchester City and Paris Saint-Germain, which have deep ties with Abu Dhabi royalty and the Qatar government, respectively. Nations have also sought to advertise themselves by buying the shirt sponsorship rights of countless teams across Europe and around the world. Newcastle fans can point to these examples to justify their continued support for their club.
This raises the question of where European soccer is headed. Will the Premier League allow itself to become a geopolitical battleground where countries with too much money can try their hand at the beautiful game? Will the fans be too blinded by the allure of money and prestige to see the sportswashing that is happening? Based on the Saudi inspired attire that some fans have begun to wear, the whitewashing has already begun, but on a larger scale, investment into the team and success against Europe’s top clubs is needed. In the meantime, I think that many soccer fans around the world can’t wait to see how much money Newcastle will spend and which star players they will sign.
