You are here

Saudi Arabia withdraws bid to buy Newcastle United

nz_NewcastleUnited_310767.jpg
Saudi Arabia's sovereign wealth fund on Thursday withdrew its bid to become the latest foreign owner in England's Premier League, pulling out of an agreement to buy Newcastle United after a tumultuous takeover process and significant pressure on the league to block the sale.

[RIYADH] Saudi Arabia's sovereign wealth fund on Thursday withdrew its bid to become the latest foreign owner in England's Premier League, pulling out of an agreement to buy Newcastle United after a tumultuous takeover process and significant pressure on the league to block the sale.

Without criticising the Premier League directly, the group led by Saudi Arabia's Public Investment Fund attributed the collapse of the deal in part to "an unforeseen prolonged process".

The Premier League, which had been vetting the proposed sale since April, made no comment on the withdrawal.

The Saudi-led consortium, which included the British businesswoman Amanda Staveley and a British-based property company in addition to the kingdom's sovereign wealth fund, was set to pay about US$400 million for the team and its stadium, which has been owned by the sportswear magnate Mike Ashley since 2007.

While the Premier League's glamour and global reach have long made it a magnet for the world's superrich — its team owners include American billionaires, a Russian oligarch, a Chinese holding company and the brother of the ruler of the United Arab Emirates — Saudi Arabia's bid for a team led to a level of discord rarely seen.

Your feedback is important to us

Tell us what you think. Email us at btuserfeedback@sph.com.sg

Human rights groups and even the widow of murdered journalist Jamal Khashoggi wrote to the Premier League's chief executive, Richard Masters, to urge him to block the sale because of the involvement of the Public Investment Fund, the Saudi sovereign wealth fund led by Saudi Arabia's de facto ruler, Crown Prince Mohammed bin Salman.

A more important challenge to the takeover, at least for top Premier League officials, had come from beIN Media Group, the Qatar-owned television network. The network, one of the Premier League's biggest broadcaster partners, has for three years accused Saudi Arabia of being behind industrial-scale piracy of its programming.

Only weeks before it began considering the Saudi takeover bid, the Premier League had written to the United States government to urge it to keep the kingdom on a watch list of countries that breach intellectual property rules.

Once the Saudi bid became public, senior beIN officials lobbied the league and even the British government not to allow a Saudi state vehicle to join the ranks of club owners, and the Premier League spent months deliberating the so-called fit and proper test that is applied to all new owners.

The Premier League was not known to have ever previously blocked a sale, and with the Saudi group's withdrawal, it did not have to do so in this case.

"Unfortunately, the prolonged process under the current circumstances coupled with global uncertainty has rendered the potential investment no longer commercially viable," the investment group said in a joint statement. It said its agreement with Newcastle's owners to buy the team had expired and appeared to blame uncertain economic conditions as the reason to walk away. Ashley had collected more than US$25 million as a nonrefundable deposit.

Premier League matches have a reach that surpasses any other similar global sports competitions, with its teams counting millions of passionate fans on continents thousands of miles away from the stadiums where games take place.

That reach has attracted perhaps the most diverse ownership group in sports: During the past two decades, British businessmen who once dominated the league's ownership ranks have been edged out by billionaires from the US, Europe, Asia and Africa — a membership that currently boasts a Russian-Israeli oligarch (Chelsea's Roman Abramovich), one of Africa's richest men (Aston Villa's Nassef Sawiris) and the heirs to a Thai duty-free shopping empire (Leicester's Srivaddhanaprabha family).

The Saudi-led investors had proposed spending as much as US$320 million over five years to turn Newcastle into a competitive force in the league and to invest in infrastructure around its stadium.

The Saudi fund would not have been the league's first Gulf-state owner: Manchester City, who won the league in two of the past three seasons, is controlled by the ruling family of the United Arab Emirates.

While the league spent weeks in an uncomfortable spotlight created by the Saudi bid, Newcastle fans had largely rejoiced at the prospect of the unpopular Ashley being replaced by deep-pocketed owners.

Since the first details of the proposed takeover emerged earlier this year, many Newcastle fans promoted it on social media, with some even changing their profile pictures to incorporate images of the Saudi flag or Salman, the kingdom's crown prince.

Most seemed to hope that the Saudis' wealth would allow the team, whose raucous home support endures despite a middling on-field record, to compete for titles again. Newcastle narrowly missed missing winning the Premier League title twice in the mid-1990s but has not won a major domestic trophy since the 1955 FA Cup. The last of the club's four English titles came in 1927.

AFP

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes