How Newcastle’s Saudi takeover ripped the £8bn-a-year Premier League in two

Three years after Saudi Arabia bought Newcastle United FC, only now are the full seismic consequences hitting home for English football.

Civil war engulfs the world’s richest domestic football competition, with a Gulf state-owned sibling – Manchester City – leading the charge. Yet it was the Newcastle deal on Oct 7 2021 – and rival clubs’ response to it – that provided the battleground on which legal rows still rage.

Paranoia and mistrust between Premier League factions over state control can only intensify as WhatsApp messages, seen by The Telegraph, cast new light on the takeover.

In the cache, Amanda Staveley, the financier who orchestrated the deal, appears to openly acknowledge on multiple occasions that Saudi Arabia’s all-powerful Mohammed bin Salman had the final say.

“The Crown Prince is losing patience,” she writes during one telling message. “I need to assure him we will get there.”

Clubs and MPs had already repeatedly expressed doubt after a US court last year published documents describing the Saudi Public Investment Fund (PIF) as “a sovereign instrumentality” and Newcastle chairman Yasir Al-Rumayyan as “a sitting minister of the government” with “sovereign immunity”.

The majority of Newcastle’s loyal fanbase may not care a jot. They partied in white Arab headdresses when the deal was ratified, and rejoiced even more when Eddie Howe rejuvenated the side, and then duly qualified for the Champions League for the first time in two decades.

Player spending sprees had been minimal compared to the early Abu Dhabi-era at City, but that is largely owing to more stringent profit and sustainability rules.

Staveley, meanwhile, no longer has any financial interest in the club, her final stake handed over in July. She appears to have quickly pivoted to exploring investment at Tottenham Hotspur in recent months. PCP Capital – the vehicle used for her investment alongside PIF at Newcastle – has been liquidated, but her great asset remains a contacts book filled with potential Middle Eastern backers.

Daniel Levy, the Tottenham chairman of 23 years, has acknowledged a “significant increase” in the team’s equity base is required, having already explored options in the region. The Telegraph detailed in January last year how Levy had first sounded out Nasser Al-Khelaifi, president of Paris Saint-Germain and the most powerful man in Qatari sport.

In recent weeks, Staveley has been spotted twice at the Tottenham Hotspur Stadium, including at an NFL game only last weekend. A potential minority share proposal with her husband, Mehrdad Ghodoussi, is anticipated.

Only a figure of Staveley’s ebullience would fail to bristle at the prospect of putting themselves through league ownership tests again.

The £305 million Newcastle purchase in 2021 took a bruising 18 months to ratify, with human rights activists and MPs relentlessly calling for the takeover to be turned down. Amnesty International said it was a naked attempt to “sports-wash” Saudi Arabia’s barbaric treatment of its population.

Yet, in the £8 billion-a-year revenue-raising world of the Premier League, those morality concerns were effectively moot at the time.

Panic and dismay

For the league, there was no rule explicitly barring state ownership, and human rights concerns as a disqualifying factor have only since been introduced.

Among the rival clubs, meanwhile, the sense of panic and dismay centred only on the prospect of a trillion-dollar wealth fund blowing them all away.

Distrust, in turn, was expressed immediately between the teams as the Newcastle consortium promised no interference from the state.

“Our partner is PIF, not the Saudi state,” insisted Staveley in one interview. The PIF is an “autonomous, commercially driven investment fund”, she said in another.

Credit: PA / Financial Times Business of Football Summit

But within five days of the deal being confirmed, the likes of Arsenal, Liverpool and nine other clubs made the first move to toughen the competition’s rulebook anyway.

“We now have a spectrum of owners of clubs with some complex structures and corporate relationships,” one leading executive told the league’s legal advisory board in Oct 2021 meetings, only recently released. “Therefore, it is an appropriate time to assess whether these rules are still fit for purpose.”

Newcastle initially stood alone in dissenting – with City abstaining – as the 18 other member clubs voted through a temporary halt to “associated-party transaction” (APT) commercial agreements, where a state-owned club could, in theory, over-inflate sponsorship deals.

New APT rules – essentially targeting Newcastle and Abu Dhabi-owned City – were eventually agreed and then tightened this year. However, club relations were deteriorating to the point that City – also fighting 115 charges for breaching competition rules – warned in February of an unprecedented arbitration claim of “discrimination”.

A two-week arbitration hearing was then heard in private in June, with up to 60 lawyers inside the room, and supporting evidence from Newcastle.

Watershed moment

The case has been a watershed moment for the league, with the final outcome still unclear. In contrasting interpretations of a 175-page judgement finally made public last week, the league claimed it had “endorsed the overall objectives, framework and decision-making of the APT system” while City also claimed they had “succeeded”.

City now no longer believe the Premier League is fit to be a regulator at all. The club’s 115 charges are an aggravating feature in such attacks, but existential threats would be unthinkable if the Newcastle deal had not happened.

Other Premier League clubs still fume that the takeover should never have been approved. The only fall guy so far, however, has been the competition chair, Gary Hoffman, who served only 18 months in the job.

An unofficial vote of confidence surrounded complaints he should have consulted clubs more, having only notified them of the outcome by email. As he departed, Hoffman said only that it was “right for me to stand aside to allow new leadership to steer the league through its next exciting phase.”

Sources in Saudi Arabia always maintained Newcastle would not be a major priority for the Crown Prince. There has been wild spending across sport – in golf, boxing, and in its own domestic football league, where Cristiano Ronaldo now stars – which make a more natural fit with the Vision 2030 plan to diversify the nation away from oil.

Next on the agenda is a tennis takeover. World Cup hosting rights also appear certain in 2034. Such huge projects dwarf the Newcastle investment, yet rumours had been swirling since early 2018 that Bin Salman had been eyeing a Premier League club.

Mike Ashley, who had put Newcastle up for sale in 2017, made his first request for Premier League’s Owners’ and Directors’ Test approval in April 2020, citing a deal with a consortium consisting of Staveley’s PCP Capital Partners, the Reuben Brothers and the PIF.

Over the ensuing months, Richard Masters, the league’s chief executive, faced intense scrutiny. He denied being put under pressure by the government to look favourably on the deal. “You are suggesting we were put under pressure to go one way or another,” he told MPs. “That has not happened.”

The main pressure points at the time appeared to come from two separate legal cases, via arbitration and then at the UK Competition Appeal Tribunal (CAT). Behind the scenes, however, the league was waiting for a geopolitical grudge match to ease between Saudi and neighbouring Qatar before it could even consider next steps.

Hostilities against BeIN Sports, which owns the league’s TV rights for the region, within Saudi Arabia, trace back to the Arab Spring and a former BeIN subsidiary, Al Jazeera, being blamed by rulers for fuelling the flames of rebellion. Riyadh-based piracy outfit beOutQ had been repackaging BeIN’s feed as part of one of the world’s biggest sporting piracy cons for almost the entirety of the league’s clearing process.

Coincidentally or not, it came off air just a day before the Newcastle deal was announced. Sources close to the talks maintain that “legally binding” assurances were already in place. Since then, BeIN hostilities have resumed again. The Telegraph disclosed how its TodTV streaming service has been blocked since the opening ceremony of the 2022 World Cup in Doha.

‘Fair game’

Further reinforcement beckons from the new Government which has pledged in the King’s Speech to deliver the Conservatives’ long-promised independent football regulator.

Lisa Nandy, the Culture, Media and Sport Secretary, says she is “really focused” on delivering “a sustainable, fair game” in her football governance bill, but the power to intervene in club ownership issues has yet to be clarified.

However – with FOI requests exposing in 2023 how the previous government believed a failure in the takeover posed a risk to Saudi Arabia and United Kingdom relations – the prospect of major interventions at Newcastle appears to be minimal.

Nobody, least of all the Premier League, is spoiling to set off another legal bomb in this season of turbulence for the beleaguered competition.

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