Explained: Why did the Newcastle United takeover fail?

The Magpies were the subject of a bid from a consortium allegedly backed by the Saudi regime.

The impending takeover of Newcastle United by a Saudi-backed consortium was one of the headlines as Premier League resumed in June. Though the deal didn’t go through after weeks of lengthened negotiations, the rumours around the same refuse to die down anytime soon.  Most recently, a group named Newcastle Consortium Supporters Ltd threatened the Premier League with legal action and accused them of breaching the law of the competition. They have asked the communications surrounding the failed takeover to be made public as supporters seek further clarity on the reason behind the move falling through.

In this article, Khel Now attempts to explain the whole saga.

Who were the interested buyers?

Saudi Public Investment Fund (PIF), the sovereign wealth fund of Saudi Arabia, PCP Capital Partners led by British businesswoman Amanda Staveley and RB Sports & Media owned by David Reuben and Simon Reuben were behind the proposed takeover. The Reuben brothers are believed to be the second richest people in the United Kingdom. Staveley is renowned for her connections in the middle-east and had facilitated Sheikh Mansour’s famed purchase of Manchester City in 2008. The PIF was slated to own 80% of stakes in the deal, whereas the other two partners would share 10% each. They tabled a bid of around £300 million to gain control over the Magpies.

Where’s the catch?

Concerns began raising as soon as the involvement of the PIF in this move came into light. Over 16 weeks had passed since the documentations about the administration of the club under the new ownership were presented. Given the Saudi Arabian regime’s visible participation in the bid, the British government was pushed from several quarters to reveal their stance on the issue. However, the Boris Johnson-led dispensation restrained from taking any sides throughout this long-drawn process.

“I'm very uncomfortable with the level of expectation of involvement on government with things that are very clearly decisions for football. There is obviously the fit and proper persons test to go through with any acquisitions of this nature and I think that is absolutely appropriate. It's something that I'm keeping an eye on but it is a decision for those involved. It would be inappropriate for me to interfere at that kind of level,” Sports Minister Nigel Huddleston told Sky Sports.

The Magpies’ supporters have become increasingly frustrated of Mike Ashley, under whom the club has endured two relegations. However, noises were made regarding Saudi Arabia’s track record on human rights. It needs to be noted that the kingdom’s history on such subjects is beyond the scrutiny of the Premier League’s owners’ and directors’ test. But, such protests do tend to garner attention on the internet.

For example, Hatice Cengiz, the fiancé of the late journalist Jamal Khashoggi made an appeal to the supporters of Newcastle United to oppose this takeover by the Saudi owners. Khashoggi was assassinated by agents of the west Asian kingdom in October 2018. Such instances appeared to be acting as a blockade in the smooth passage of the deal. But, the reason behind its ultimate failure was something different, which directly impacts the revenue stream of the Premiership.

What’s the main reason?

Saudi Arabia and Qatar have been involved in a diplomatic conflict right from the time of the Arab Spring. Both nations are at loggerheads on a number of issues. For example, Qatar maintains positive relations with Iran, who share a rivalry with Saudi. On the eve of the 2018/19 season, the Premier League sold its broadcasting rights in the Middle East and North Africa (MENA) region to beIN SPORTS for three seasons from 2019-20 to 2022-23.

The beIN SPORTS is headquartered in Doha, Qatar. Its sister channel Al Jazeera is banned in Saudi and is reported to support the ‘Arab Spring’ too. It has further emerged that beIN SPORTS official telecasts of the Premier League matches are hijacked and rebroadcasted by beoutQ, which is a private television broadcaster in Saudi Arabia. In July, amid the negotiations for the takeover of Newcastle United, beIN SPORTS was banned in Saudi Arabia. Henceforth, there is no legal way to watch the Premier League games in the Mohammed bin Salman led kingdom.

The ruling regime has denied allegations of pirating the broadcast of the matches. However, it is deemed to be highly unlikely for a move of this magnitude to take place in the kingdom without the approval of the reigning power. Hence, despite immaculate planning and presentation by Amanda Staveley, the Premier League and some other clubs did not sanction this takeover. The PIF asserted that it is autonomous from the powers of the Saudi Arabian authorities, an argument that the league refused to buy.

Eventually, it seemed rather obvious for the Premier League to block the sale of one of its clubs to a proxy body of a kingdom that is obstructing its official broadcast partners in the concerned region. The PIF remains adamant on going ahead with the purchase in the coming times. Mike Ashley is keen to sell and the supporters are eagerly waiting for the same too. However, all of it looks doubtful as long as Saudi Arabia disrupts beIN SPORTS from operating properly in the Arab country. For that, they will have to allow the further expansion of a Qatari body, which arguably looks unfeasible currently.

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