Blades' Saudi link may scupper Magpies deal

LONDON • The confusion over official filings from the owners of Sheffield United has highlighted a potential pitfall for the Saudi bid to buy their English Premier League rivals Newcastle - the issue of a conflict of interest.

British media reports have indicated that the Saudi-backed takeover of the north-east club from British retail magnate Mike Ashley is close to being completed.

However, the issue of the Blades being connected to the ruling House of Saud risks lingering over both teams and could return to focus when they face each other.

The Premier League will not comment on its approval procedure, but the matter is certain to have been considered given English football's rules on club ownership. Those rules state that a person will be disqualified if "he is involved in or has any power, either directly or indirectly, to determine or influence the management or administration of another club".

The question the league must determine is whether the Blades, who are owned by Prince Abdullah Mosaad Abdulaziz Al Saud, who is a Saudi royal, will be at risk of coming under the influence of Newcastle's potential majority owners - the Saudi sovereign wealth fund.

A group fronted by British financier Amanda Staveley, with an expected 80 per cent Saudi investment from the Public Investment Fund (PIF), has made a reported £300 million (S$520 million) bid to buy the Magpies.

While there is no suggestion PIF has any direct financial involvement in Sheffield United, the question is whether, given the nature of Saudi business practice, it could influence the Yorkshire club's decision-making.

"Real-world Saudi politics may mean there is some connection, even influence, between the owners - but proving it in concrete terms may be an issue, especially if the ownership structure of both clubs is via separate corporate entities," said leading sports lawyer John Mehrzad.

What is clear is that the rules would allow the league to block any takeover if it felt there was an issue with "influence".

"If a rational decision-maker could interpret the rules to the exclusion of a PIF director, then the Premier League can do so," said Christopher Flanagan, managing editor of the International Sports Law Journal.

"So it is likely, in essence, to come down to whether or not a rational person would conclude that a director (or shadow director, which may include majority owners) could exercise influence over United."

Mehrzad has noted energy drink giant Red Bull's involvement in clubs in German Bundesliga outfit Leipzig and Austria's Salzburg, whose ownership structures were rejigged to satisfy European football's governing body Uefa.

"The ownership structure could probably be reconfigured under similar lines to avoid Newcastle's new owners falling foul of Premier League rules - if 'influence' between those two clubs can be established in the first place," he said.

REUTERS

A version of this article appeared in the print edition of The Straits Times on May 23, 2020, with the headline 'Blades' Saudi link may scupper Magpies deal'. Print Edition | Subscribe