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Newcastle United owners PIF target £1.5bn takeover as Yasir Al-Rumayyan reveals new plan
Newcastle United are perhaps the Saudi Public Investment Fund’s (PIF) flagship investment in sport but they are far from the only one and towards the more modest end of the spectrum in terms of cost.
PIF own 85 per cent of Newcastle alongside the Reuben Brothers following the takeover engineered by Amanda Staveley, who has now left the club, in October 2021.
Newcastle CEO Darren Eales, who recently announced that he will step down from his role following his cancer diagnosis, has previously said that PIF will always invest the maximum amount possible.
But that maximum is capped by the Premier League’s Profit and Sustainability Rules (PSR), which limit the Magpies’ losses to £105m over a rolling three-year period.
Elsewhere in their sports empire, which is in turn part of a wider business portfolio worth almost £750m, there are no such financial limitations.
PIF are sparing no expense to host the 2034 World Cup, for example, while they are also pumping billions into motorsport, combat sports, tennis, and more.
PIF are also investing more and more in the sports-adjacent media sector, where there is perhaps less scrutiny and scope for greater returns.
The sovereign wealth fund have flatly dismissed accusations that their involvement with Newcastle is a sports washing project and instead routinely brief journalists that they see them as an investment.
Speaking of which, there have been a number of developments from PIF HQ in recent weeks that may give some indication of their long-term plans at St James’ Lark and beyond.
PIF now want huge new Saudi deal
PIF is increasingly entering the media space, with its £500m stake in Disney being most high profile investment in the sector to date.
Recently, PIF have also been linked with two investments in the sports media space specifically.
Firstly, it was reported that PIF were exploring a £760m investment in Premier League broadcasters DAZN.
They have since distanced themselves from that particular deal.
However, per Bloomberg, that have since also been linked with another Premier League broadcaster in BeIN Sports.
DAZN are headquartered in London while BeIN is based in Qatar.
But now, as reported by Sport Business, PIF are on the verge of a deal acquiring a controlling stake in Saudi media company in MBC for £1.5bn
That would reflect what PIF and Newcastle chairman Yasir Al-Rumayyan recently revealed about cutting foreign investment from 30 per cent to closer to 18-20 per cent in favour of a greater domestic focus.
Significantly, it has been reported elsewhere that this strategic pivot will not affect Newcastle, whom they are about to pledge over £1bn to redevelop St James’ Park or build a new stadium entirely.
How Newcastle can maximise their revenue after Man City’s legal case vs Premier League
In October, news broke that Man City had successfully challenged the Premier League’s APT rules, which govern commercial deals and were introduced in the wake of the Newcastle takeover.
The APT rules, or associated party transaction rules, dictate that all sponsorship contracts must be assessed for fair market value so as to prevent clubs from artificially inflating their commercial income.
In truth, both the Premier League and Man City ‘won’ aspects of the case, with Man City failing to have the fair market value component struck down but succeeding in a number of other ways.
There are aspects of the Premier League’s rules that need to be rewritten, which has caused major tensions between clubs.
Newcastle have aligned themselves strategically with Man City and gave evidence against the Premier League at the tribunal in London.
The Magpies and their Premier League peers are now somewhat stuck in limbo with regards to striking new commercial deals.
Some analysts have suggested, however, that there could be a window of opportunity to now sign big deals with PIF-linked companies.
The continuation of the fair market value aspect of the APT rules means they will not be able to form new PSR-boosting partnerships with abandon, but a more relaxed regulatory environment might be imminent.