January 20, 2021

Newcastle United takeover: Who was behind £300m takeover bid and why did it fail?

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Goal brings you all you need to know about the abandoned Saudi Arabian takeover of the St James’ Park club

Newcastle United will have to wait for new owners, with a £300 million ($375m) takeover bid to take the Premier League club out of the hands of Mike Ashley running out of steam.

Magpies fans have been agitating for a change of owner for years now, having witnessed two relegations under Ashley’s stewardship, with a feeling of frustration festering among devotees of the Tyneside club.

Ashley is all too aware of that sentiment and he placed the club up for sale back in 2017. After some false starts, it appeared that he may have found a buyer in 2020.

However, it didn’t work out. Goal brings you everything you need to know about who was behind the takeover bid and what caused it to fail.

Who was buying Newcastle United?

No one is buying Newcastle United at present, much to the disappointment of Newcastle fans.

Saudi Arabia‘s Public Investment Fund (PIF), which is headed up by Crown Prince Mohammed bin Salman, was the main mover behind the recent bid to purchase Newcastle United from Ashley.

The takeover plans would have reportedly seen the Saudi PIF acquire an 80 per cent stake in the club. The remaining 20% was to be split between Amanda Staveley’s PCP Capital Partners (10%) and British businessmen, the Reuben brothers (10%).

However in July 2020, after months of negotiations, the PIF withdrew their bid, saying that it was “no longer commercially viable” for them to proceed.

A statement said: “With a deep appreciation for the Newcastle community and the significance of its football club, we have come to the decision to withdraw our interest in acquiring Newcastle United Football Club.

“Unfortunately, the prolonged process under the current circumstances coupled with global uncertainty has rendered the potential investment no longer commercially viable.”

The PIF is Saudi Arabia’s sovereign wealth fund, which invests in various different projects around the world. PCP Capital Partners is a venture capital company and the Reuben brothers – David and Simon – are primarily in the property investment sector. 

Yorkshire native Staveley, who helped broker the purchase of Manchester City by Abu Dhabi’s Sheikh Mansour in 2008, has been involved in negotiations regarding the potential purchase of Newcastle for a number of years, having attempted to strike a deal with Ashley in 2017 when he initially put the club up for sale.

After that deal disintegrated, Ashley described the talks as “exhausting, frustrating and a complete waste of time”, but Staveley was not put off by the sports retail magnate’s dismissive comments, telling The National in 2019 that it was “water under the bridge”.

She was hopeful of getting the most recent deal over the line and revealed to The Times that she was “heartbroken for the Newcastle fans” after it became clear that the purchase would not be completed.

Interestingly, it is not the first Premier League club that the Saudi investors have been involved in discussions with. There had been reports in 2019 that Mohammed bin Salman was considering a £3.8 billion ($4.9bn) takeover of Manchester United.

The takeover talks were dismissed as “completely untrue”, but discussions were held between the club and the PIF about an “advertisement sponsorship project”.

What were the difficulties with the Newcastle takeover?

A number of issues arose since April when the Saudi takeover of Newcastle appeared to be gathering momentum.

Pressure applied by broadcasters and human rights groups as well as, it is reported, other Premier League clubs, erected barriers in the negotiations. Those barriers caused delays and frustration, with the consortium noting in its statement that “time itself became an enemy of the transaction.”

Piracy

One of the chief sticking points related to a dispute with Qatari television company beIN Sports and allegations of broadcast piracy, which is something that the Premier League had to treat seriously.

In June, the BBC reported that Angus MacNeil, a member of the British parliament, had written a letter to the government condemning the idea of broadcast piracy in Saudi Arabia and urging them to block the takeover.

Saudi authorities appeared to be dealing with the issues and were reported to have moved closer to a deal, but a set-back occurred in July when beIN Sports was banned from operating in Saudi Arabia.

In a statement, beIN said: “We would question – as we have for three years – how Saudi citizens can watch Premier League matches legally in Saudi Arabia with this ‘permanent’ ban on the Premier League’s licensed broadcaster.”

The stand-off between the Qatari broadcasters and the Saudi government is part of a wider dispute between the two countries, which has been ongoing for a number of years and has been described in some quarters as a “cold war”.

When it was confirmed that the deal was off, however, Staveley denied that the dispute was a problem in the takeover. She told The Times: “The piracy issue was not an issue but we tried to resolve it anyway.”

Opposition from Premier League clubs

Staveley has also suggested that the takeover bid was hampered by opposition from a number of Premier League clubs, who, she claims “didn’t want it to happen”.

It is not clear which clubs exactly were against the bid, but The Times reports that Tottenham and Liverpool were among them.

Amnesty International

As well as the financial and legal complications related to the broadcast dispute, Amnesty International declared that the Premier League risked becoming “a patsy” if it sanctioned the takeover.

“I believe there are serious questions to address in determining whether the owners and directors of the company seeking to acquire NUFC are meeting standards that can protect the reputation and image of the game,” Amnesty’s UK director Kate Allen said in a letter to Premier League chief Richard Masters.

“If the Crown Prince, by virtue of his authority over Saudi Arabia’s economic relations and via control of his country’s sovereign wealth fund, becomes the beneficial owner of NUFC, how can this be positive for the reputation and image of the Premier League?

“So long as these questions remain unaddressed, the Premier League is putting itself at risk of becoming a patsy of those who want to use the glamour and prestige of Premier League football to cover up actions that are deeply immoral, in breach of international law and at odds with the values of the Premier League and the global footballing community.”

The BBC reported in June that complaints made by Hatiz Cengiz, the fiancee of assassinated journalist Jamal Khashoggi, had also been heard by Premier League bosses.