The tangled tale of the Saudis and Newcastle United

The proposed £300m Saudi-led takeover of English football club has become highly political. The Daily Mail revealed a message sent by Saudi crown prince Mohammed bin Salman to British Prime Minister Boris Johnson following the collapse of the deal last year. It reads: “We expect the English Premier League to reconsider and correct its wrong conclusion.”

In April 2020, Newcastle owner Mike Ashley agreed to sell the club to an investment consortium including Public Investment Fund of Saudi Arabia (PIF), the British financier Amanda Staveley and the billionaire Reuben brothers.

The Newcastle Chronicle this week published a series of emails between the UK government and the Premier League showing how British officials constantly sought information for months on exactly when the sale — seen as crucial to Anglo-Saudi relations — would be completed.

Instead, the transaction got stuck in the approval process for club takeovers. As the Premier League’s chief executive Richard Masters has stated, its board decided PIF was controlled by the Saudi government. (Bin Salman, the de facto ruler of Saudi Arabia, is also chair of PIF.)

That determination meant the Saudi officials would have needed to provide information on whether its leadership passed the league’s “Owners’ and Directors’ Test”. That includes a stipulation that potential owners can be barred if they have committed an act in a foreign jurisdiction that would be considered a criminal offence in the UK, even if not illegal in their home territory.

While human rights activists point to the Saudi state’s role in the killing of journalist Jamal Khashoggi as a potential disqualifying factor, another issue is the World Trade Organization’s ruling that the country was behind beoutQ, an Arabic language pirate network which had been illegally streaming Premier League football matches across the Middle East.

The consortium did not accept the Premier League’s position that it is ultimately controlled by the Saudi government, and refused to engage in an independent arbitration that would determine the issue. And so the Saudis pulled put.

A Saudi official declined to comment on whether Prince Mohammed directly contacted Johnson in regards to the Newcastle deal, but said: “There were appropriate diplomatic conversations and reassurances that there would not be government involvement in the deal, or the running of the club and it would be run by the consortium.” The UK government and Premier League declined to comment.

All of this still matters because the Premier League and Newcastle are currently holding arbitration hearings regarding the failed takeover, with the club hoping the deal can be resurrected.

But a key issue remains whether PIF can be separated from the Saudi state. Bin Salman’s alleged lobbying of Johnson will be a relevant consideration in that process. It will undoubtedly take some time to sort out.

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The Political Economy of Football V2

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