Newcastle United
Newcastle United

After nearly two years of negotiations, a $380 million deal is now imminent

After more than two years of talks, Saudi Arabia’s sovereign wealth funds moved closer to a deal to buy Newcastle United in England’s Premier League. This would give it a foothold within the most beloved sports enterprise in the world.

According to sources familiar with the negotiations, the league will approve the transaction by the end of this week. After months of scrutiny by the Premier League, the investor group that included Amanda Staveley, a British financier, and the billionaire Reuben Brothers, pulled out from a $380m deal.

According to someone with direct knowledge of this deal, the Premier League received “legally binding guarantees” that it will not be technically controlled by the Saudi crown but the sovereign-wealth funds. Although the difference may seem minor, people familiar with the transaction claimed that it had delayed the deal for more then a year. Yasir Al-Rumayyan will be the club’s non-executive chair, according to the person. He is also the head of Public Investment Fund.

Prince Mohammed is the chairperson of the fund. Spokespeople did not respond to our request for comment.

The Wall Street Journal first reported the proposed transaction in early 2020. It has been one of most controversial in the history Premier League. This led to objections from a variety of camps, including human rights groups and the Qatari government.

BeIN Sport, Qatar’s national sports broadcaster, was opposed to the project. BeIN had accused Saudi Arabia, in a state-backed piracy operation, of stealing its content. This broadcaster is a member of the Premier League.

The largest buyer of television rights was $500 million. This was for the latest three-year cycle in television rights for the Middle East, North Africa and North Africa regions. BeIN was banned from operating within the Kingdom due to Saudi Arabia’s diplomatic boycott against Qatar.

Saudi Arabia’s position was reversed on Wednesday when officials suggested that they would lift the ban against BeIN’s content. This had been the main objection of the broadcaster to the Newcastle takeover according to someone familiar with its thinking.

BeIN was supported by the Premier League, which submitted evidence of piracy to the World Trade Organization. As the Saudi-led league closed in on an agreement, BeIN was informed by the group that it would be granted a license for broadcasting inside Saudi Arabia. This should be done in time to allow Saudi viewers to view Newcastle’s match against Tottenham Hotspur, Oct. 17 through legitimate channels.

Saudi Arabia’s Crown Prince Mohammed bin Salman has made the revival of this transaction a major coup. He places entertainment and sports at the heart of a national economic transformation. The Premier League can be viewed in over 200 countries and territories. It has been used by many of Saudi Arabia’s Gulf neighbors as a shop window. In 2008, a member from Abu Dhabi purchased Manchester City and Emirates became a major sponsor for Arsenal.

It remains to be seen how long Saudi Arabia will maintain its foothold in the Premier League. Under its unpopular owner Mike Ashley, Newcastle has had a difficult season. The club is currently in 19th position with zero wins after seven games. It would be in danger to be demoted to English soccer’s second-tier.

On a geopolitical scale, however, the agreement for a soccer club in the Northeast of England is also a win for Saudi Crown Prince’s recent strategy to engage diplomatically against adversaries like Qatar and Iran.

Riyadh signed an agreement to end the three-year-old blockade against the tiny Gulf state. Saudi Arabia, Bahrain, Egypt, Bahrain, and the United Arab Emirates all accused Doha of supporting terrorists and aligning itself with Iran in 2017. Qatar has denied this accusation. Riyadh will host Paris Saint-Germain, a Qatar-owned team, in an exhibition match at the end this year.

Qatar’s objection to Newcastle’s deal was not the only problem. Human rights activists argued that the takeover by Saudi’s Public Investment Fund (Prince Mohammed’s main investment vehicle) would be used to whitewash the kingdom’s image globally following the 2018 killing of Jamal Khashoggi.

The Premier League did not comment on the criteria for signing off the deal during its six-month review and didn’t officially reject the consortium. According to the league’s handbook, the “Owners and Directors Test”, which gives the league the power to disqualify investors for any “offense involving any act that could reasonably be considered dishonest or a “directly similar offence in another foreign jurisdiction”, the league can still disqualify them.

Rights groups argued that language allowed the soccer governing body a lot of freedom to reject the takeover.

Amnesty International sent a letter to Premier League stating that “The Premier League is at risk of becoming a patsy for those who want the glamour and prestige associated with Premier League football to cover up crimes that are deeply moral.”