Sportswashing and Newcastle United is back in the headlines.
The media totally embarrassing themselves these past 48 hours.
Not sure who first ran the story but as happens every time with these Newcastle United Sportswashing tales, all of the rest of the media just relentlessly repeat it, without even checking if the story stands up.
On Thursday we explained why this latest Sportswashing tale was nonsense.
A legal case in the United States concerning golf, had seen Yasir Al-Rumayyan named as a minister in the Saudi Arabia government. The media running around with great excitement, as though it was a case of Charlie with his golden ticket to enter Will Wonka’s Chocolate Factory. Journalist believing they had found the big damning piece of evidence that would finally sink Newcastle United and all our (fans) hopes…
The only problem of course, as we pointed out (see HERE), was that this (Yasir Al-Rumayyan a Saudi Arabia Government Minister) is a basic fact that is known to everybody already, or at least anybody who bothered to check…you know, like journalists used to do at some point in the distant past, before running such humiliating (for themselves) ‘exclusives’.
The Premier League will have always known Yasir Al-Rumayyan is a Saudi Arabia Government Minister, the legal documents that dictate how the Saudi Arabia PIF operates, state specifically that whoever is appointed as Governor of the Saudi Arabia PIF ALSO has to be a Saudi Arabia Government Minister. The court documents supplied for this US court case from Saudi Arabia DID NOT reveal anything new, they merely stated what everybody already knew, who had bothered to do even the most basic research,
This Sportswashing Newcastle United story made even more ridiculous anyway, as it totally avoids mentioning that for example, Sheikh Mansour owns Manchester City AND is also Deputy PM of the UAE! As for Qatar potentially buying Manchester United…of course, any questions about possible / probable / certain state involvement aren’t even raised by the overwhelming majority of journalists / media.
However, what is really really laughable about Sportswashing and Newcastle United, is that it doesn’t even exist.
Let me explain.
For Sportswashing and Newcastle United to be a thing, you have to first believe that Saudi Arabia is desperate for approval, especially from those in the West.
This simply isn’t the case.
Those who are in control in Saudi Arabia and indeed many other similar states / countries, do not crave the approval of those in the UK, USA, or wherever.
They don’t need approval, they already get respect and influence where the West is concerned, because of what they can offer. Saudi Arabia has oil, wealth and is a key strategic partner (of the West) in that part of the World. When those who wield power in Saudi Arabia travel to the West, that is why they are met by Presidents, Prime Ministers and Royalty.
They don’t care what other people in other countries, whether they be politicians or the general public, think about how they run things in Saudi Arabia (or Qatar, or wherever).
The Saudi Arabia PIF haven’t bought a controlling interest in Newcastle United for Sportswashing purposes. They have done it for the reason(s) why pretty much everybody else buys Premier League clubs.
A combination of some or all of these reasons – money, power, prestige, influence.
As to who should and shouldn’t be allowed to own Premier League clubs, well, that is a completely different question. The truth is that the Premier League is like the Wild West, anything goes, seemingly anybody can and will buy up Premier League clubs. Who would now decide who does and doesn’t own a PL club, who would dictate that a club would have to be sold and using what criteria.
As I say, those are all valid questions and topics of conversation BUT Newcastle United and the Saudi Arabia PIF involvement has nothing to do with Sportswashing. Rather, just like everybody else, it is some or all of money, power, prestige and influence that has driven their desire to make Newcastle United one of their numerous global investments.
Norway are doing the same as Saudi Arabia, in terms of they now have a $1,473 billion sovereign wealth fund, which was established in the 1990s to invest the surplus revenues of Norway’s oil and gas sector, to diversify and ensure the health / wealth of their nation in the years to come. To date, the fund has invested in more than 9,300 companies in 70 countries around the world.
Indeed, ironically, the Saudi Arabia PIF isn’t even in a Champions League place…, their sovereign wealth fund is only fifth highest, though they do aspire to get into that top four and eventually potentially get to the very top.
As things currently stand in the sovereign wealth fund league table, it is Norway $1,473 billion, China $1,222 billion, Kuwait $738 billion, Abu Dhabi $698 billion, Saudi Arabia PIF $620 billion.
The idea that Saudi Arabia PIF wouldn’t care about losing fortunes on Newcastle United just so long as they get some Sportswashing payback is simply ludicrous.
The truth is, Saudi Arabia PIF picked up one of the bargains of this millennium when taking control of Newcastle United.
Look at the valuations thrown about regarding Man Utd and Liverpool, similar story with Tottenham, Arsenal and look at what Man City’s valuation has now reached.
Maybe the best one to look at though is Chelsea. I don’t think anybody would argue that the US investors are there for any other major reason than eventually to make money on their investment. They paid £2.5 billion to buy the club and part of the arrangement was a commitment to spend another £1.75 billion, a total investment of at least £4.25 billion! With them clearly thinking at some time in the future they will sell Chelsea for far more than that.
Then you have Saudi Arabia PIF investing around £300m to buy their controlling stake in Newcastle United and around £200m extra invested in NUFC since then. Peanuts! Look at Everton, their owners are said to be looking for £500m to buy the club AND another £500m to cover the cost of their new stadium!!
The Reuben family are one of the two richest families in the UK (reports variously have them ranked first or second year to year), I don’t think they get involved in many investment projects where they are expecting not to make a lot of money, never mind supposedly expecting to lose it!
Amanda Staveley was speaking at the FT Business of Football Summit in Mayfair, London yesterday (Thursday 2 March 2023):
“We tried to buy Liverpool.
“When we walked into a Newcastle United game we said why spend X Billion when you can spend three hundred and some million and put in….I think we have put in two hundred plus to date of new money since we bought the club.
“We had a particular business plan, based on a five, ten, fifteen year timeline.
“Critical to that plan was making sure we had the right partners.
“So making sure (Saudi Arabia) PIF, who are very long-term investors.
“In the last year it’s extraordinary…
“Hoping potentially there might be the chance of Champions League.
“I love the valuations that are reflecting in Chelsea….because it makes our valuation look very compelling.
“We bought the club at under two times revenue.
“When you are looking at five to seven times revenue, that is a lot of money.”
Basically, you don’t need to be a top Economist to understand that Saudi Arabia PIF and their partners have bought an absolute bargain.
There are various ways of valuing businesses and Amanda Staveley talks of them buying Newcastle United for less than two times what the annual revenues are. Clearly, already they could sell it for far far more than the £500m or so that has been invested so far. In the future, who knows just how many times more than that 2021 revenues figure they could sell NUFC for, if / when they choose to.
The thing is, only five months ago, as we were coming up to the first anniversary of the Saudi Arabia PIF led takeover of Newcastle United, the Newcastle United Chairman (and Governor of Saudi Arabia PIF and Saudi Aravia Government Minister) Yasir Al-Rumayyan was saying exactly the same…
Yasir Al-Rumayyan – 4 October 2022:
“We bought the whole team (Newcastle United) for £350m, instead of only having 30 per cent in another team (Manchester United) for £700m.
“You can see Chelsea was sold for $3.5bn (£2.5bn).
“So, my potential now is to go from £350m to at least $3.5bn (£2.5bn).
“Football of course is one of the most important sports there is, whether domestically (in Saudi Arabia) or abroad.
“It is the number one sport in the world and why the English Premier League?
“Well, because it is the best league in the world, no other league competes with it.
“There are 20 teams, three are relegated, three are promoted, the advantage of the Premier League is that any of the 20 teams can beat the best team in the league.
“When we looked at it, we looked at it from a financial perspective.
“By the way, it wasn’t the first offer we got regarding a football team. We looked in Italy, France and the UK as well.
“In the UK there was a team (Manchester United) that approached us on the basis that we take 30 per cent of the ownership and (on the condition that) we don’t interfere at all in terms of managing the club, for £700m.
“Then we bought Newcastle, who offered us 100 per cent of the ownership, but Amanda Staveley and her husband who got us the opportunity told us, ‘We like it so much, we would like to be with you’….and that was perfect.
“Then came the Reuben family, who are one of the biggest property investors (in the UK), saying that, ‘We would like to come with you’, and these are one of the biggest investors in (the City of) Newcastle (Upon Tyne).
“I said, ‘Perfect! Tell them to come’. So now they (Amanda Staveley, her husband and the Reubens) have a skin in the game.”
