Magpies won't soar so quickly
A successful Saudi bid for Newcastle unlikely to have same impact as UAE takeover of City
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Newcastle's Sean Longstaff (right) celebrating with his brother and fellow midfielder Matthew after scoring against Oxford in their FA Cup fourth-round replay in February. The Magpies have reached the quarter-finals, with their win in this competition in 1955 their last piece of domestic silverware.
PHOTO: AGENCE FRANCE-PRESSE
LONDON • A bid by a Saudi Arabian state fund to secure ownership of Newcastle is drawing scrutiny, but even if it succeeds, it is unlikely that the petrodollars will transform the Premier League club into a powerhouse in the near future.
The prospect of the takeover fuelling a rapid rise to the top, in the manner of Manchester City's four title triumphs under their United Arab Emirates owners, has fired the imagination of many Newcastle fans.
But several analysts believe that the investment impact may not be on such a scale - City's owners have invested more than €1 billion (S$1.55 billion) since 2008, the first club to do so.
A group fronted by British financier Amanda Staveley, with an expected 80 per cent investment from the Saudi sovereign wealth fund PIF and 10 per cent buy-in from billionaire brothers David and Simon Reuben, have made a reported £300 million (S$528 million) bid to buy the club from British businessman Mike Ashley.
The proposal, however, is facing several obstacles, with the prospect of Saudi ownership of a top English club widely condemned by human rights groups. The Gulf kingdom was criticised after the 2018 murder of prominent Saudi journalist Jamal Khashoggi at its Istanbul consulate, on top of the ongoing Yemen war and the continued detention of women's rights activists.
There is also the long-running dispute with Qatari broadcaster beIN Sport regarding claims of Saudi tolerance of pirate entity beoutQ.
It is an issue which has been raised by some British parliamentarians and is now being reviewed as part of the Premier League's "owners' and directors' test".
Investors wanting to become owners of English clubs have to show they have no unspent criminal conviction for fraud, are not bankrupt and have not been banned from serving as a company director.
Newcastle fans, however, are beside themselves at the prospect of major investment in their team, who have not lifted silverware since the 1955 FA Cup despite claiming one of the country's largest fan bases, with the 52,354-capacity at St James' Park regularly sold out.
The timing of the bid, though, is far from ideal due to the coronavirus pandemic and credit ratings firm Moody's last week cut Saudi Arabia's outlook to "negative" from "stable", saying the oil price crash has raised risks for the kingdom.
"It is a relatively risky undertaking at a time when it looks like the kingdom will need a lot of liquid assets to finance deficits and maintain its currency peg," said Steffen Hertog, associate professor in comparative politics at the London School of Economics.
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£40m
Newcastle's record signing, the fee for Brazilian striker Joelinton. It remains to be seen if this figure will be surpassed should the Saudi Arabian state fund take over the club.
Like other observers, he believes the Saudi involvement is aimed at improving the country's influence and image outside of its borders, but economic realities may limit PIF's ambitions, despite reportedly managing US$300 billion (S$425.28 billion) in assets.
"It definitely is part of an Abu Dhabi-style soft power strategy, but I'm not sure how much extra money they will pour into the club.
"Given current fiscal developments and the travails of some of the PIF's other assets, there are likely to be constraints to Saudi generosity."
Neil Quilliam, chief executive of consultancy firm Castlereagh Associates, concurred, adding: "PIF does not have the experience or capacity to be 'hands on', so would likely take a back seat."
REUTERS
