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PIF secure £5.6bn investment deal as Newcastle United target 65,000 St James’ Park rebuild

Adam Williams

Tue 7 January 2025 7:15, UK

St James’ Park is the soul of Newcastle United but the Saudi Public Investment Fund and fans alike are open to building a new home ground to provide the financial firepower to challenge football’s elite.

Newcastle are still awaiting the results of a feasibility study that will outline the pros and cons of moving to a new stadium or remaining at an expanded and improved St James’ Park.

Matchday income has skyrocketed at the since PIF bought the club in October 2021 as attendances and supporters’ acceptance of higher ticket prices have risen thanks to improved standards on the pitch.

In 2022-23, the last year for which financial data is publicly available, Newcastle earned £38m through the turnstiles.

They haven’t release their 2023-24 accounts yet, but it is reliably forecasted that Champions League gate receipts will see that figure rise considerably.

With Eddie Howe’s side in magnificent form, they harbour hope that they could get a seat at Europe’s top table again in 2025-26. Whether they can strengthen this January, however, is contingent on PSR.

Position	Team	Played MP	Won W	Drawn D	Lost L	For GF	Against GA	Diff GD	Points Pts
1	LiverpoolLiverpool	19	14	4	1	47	19	28	46
2	ArsenalArsenal	20	11	7	2	39	18	21	40
3	Nottm ForestNottingham Forest	19	11	4	4	26	19	7	37
4	ChelseaChelsea	20	10	6	4	39	24	15	36
5	NewcastleNewcastle	20	10	5	5	34	22	12	35
6	Man CityManchester City	20	10	4	6	36	27	9	34
7	B’mouthBournemouth	20	9	6	5	30	23	7	33
8	Aston VillaAston Villa	20	9	5	6	30	32	-2	32

Chief operating officer Brad Miller, who will oversee the stadium project, has projected that the Magpies’ matchday income will double regardless of whether they opt for a rebuild or to remain in situ at NE1.

Either way, the plan is to be able to accommodate 60-65,000 fans on matchdays.

As well as potentially dramatically changing the city’s skyline, a stadium redevelopment would be transformative for Newcastle’s Profit and Sustainability Rules (PSR) position.

The chips have been stacked against in terms of PSR – formerly known as financial fair play, or FFP – since PIF’s takeover, with losses over three years capped at £105m under the Premier League system.

PIF’s model is to always spend the maximum under PSR, and increased matchday and commercial income from a new stadium would give Howe and sporting director Paul Mitchell more flexibility in the market.

It is a matter of when and not if Newcastle take action on the stadium front, but there are myriad issues to resolve before they can break ground.

One of those is financing, with costs reportedly likely to reach £1bn in either scenario.

As their £720bn-strong portfolio of assets will attest, PIF are not short on capital. Liquidity (i.e., how readily they can access funds), however, is a slightly different affair.

With a slew of mind-blowing giga-projects to fund such as The Line, a 110-milelong city housed in a single building, still rely on external investment to an extent.

Newcastle’s stadium project is a drop in the ocean here in any case, but news from the world of finance shows how PIF will continue to fund projects going forward.

• READ MORE: Newcastle have just been offered a chance to sign £82m Manchester United player in shock deal

PIF bank £5.6bn capital injection

Most stadium projects in European football are financed by long-term loans secured on future income, with the club itself – not the owner – servicing the debt over a period of time.

However, Islam – the state religion of Saudi Arabia – forbids earning or paying interest on loans. That means Newcastle’s project is unlikely to be funded by traditional debt.

PIF almost certainly have the liquidity to privately finance the stadium project, but they do also rely on a different form of Islamic financing, such as Murabaha contracts.

In Murabaha, funds are raised with the promise of a return at a marked-up price.

As reported by , PIF have now raised £5.6bn via this tool with the aim of financing future investments.

That £5.6bn essentially will essentially function as PIF’s overdraft.

And when the time comes to redevelop or rebuild St James’ Park, the funds will likely come from a similar source.

• READ MORE: Ally McCoist says ‘unstoppable’ Newcastle star is simply the best player in the Premier League in his position

St James’ Park commercial boom can supersize Eddie Howe’s budget

As infrastructure costs are exempt from PSR, PIF are free to spend as much as they please on building the most lucrative and space-age stadium for Newcastle

A conservative estimate for annual matchday income at a revamped ground boasting a capacity of 65,000 is around £70-80m.

Because of PIF’s model of maxing out the budget as far as PSR allows, that extra £30-40m in revenue will go straight to the playing budget.

But the financial benefits would not come from ticketing revenue alone – commercial income will soar almost overnight too.

Under Mike Ashley, stadium naming rights agreements at Newcastle were a no-go. The infamous ‘Sports Direct Arena’ was a short-lived experiment.

Under PIF, there is more acceptance of the club’s need to raise revenues to compete at the very top on the pitch, so a branding deal – perhaps with a PIF portfolio company – would be more palatable.

Estimates vary, but football finance experts consulted by TBR Football suggest that a £10-20m deal is realistic and would have no problems under the Premier League’s APT rules.

The opportunity to host more non-football events, as Spurs have discovered at the Tottenham Hotspur Stadium, can also be extremely lucrative.

As soon as the cement has dried, St James’ Park could quite easily be the north east’s go-to venue for promoters looking to stage concerts or combat sports events, two big earners in the events business.

There also a number of less easily quantifiable but potentially just as valuable brand benefits, with sponsors willing to pay more to be associated with a team whose home is a best-in-class stadium.

Newcastle’s commercial income was £47m at the last count and is expected to have risen to £64m by the time they release their 2023-24 accounts in the next few months.

That could increase by 80-100 per cent once the stadium project is finalised and their commercial strategy has had a few years to mature.