Saudi Arabia’s Public Investment Fund (PIF) is set to turn Newcastle United into one of the world’s most valuable football clubs if its planned GBP300 million takeover of the English Premiership side finally gets approval.

The deal has been caught up in Gulf rivalries, accusations of piracy in sports broadcasting, and controversies over PIF’s political relationship with the government. The plan hit the woodwork in 2020 as EPL bosses dragged their heels on whether PIF passed its owners and directors test amid concerns the fund was too close to the Saudi government. The proposed PIF-led takeover has also been criticized as “sportswashing” for the Saudi government by its opponents and critics, although the British government has previously signaled its support for the deal.

According to The Athletic, the Saudi takeover is expected to go through after the the Saudi government settled a legal dispute with Qatar-based beIN Sports over piracy. The dispute arose after Saudi-based beOUTQ hacked beIN Sports' regional stream and redistributed it. Although the Saudis closed down beOUTQ in 2019, they continued to prevent the broadcast of beIN Sports.

With the block now lifted and legal disputes settled, the acquisition of an 80% stake in the club by a PIF-led Saudi consortium is set to go ahead; the remainder would be split between British businesspeople Amanda Staveley and the Reuben brothers. Retail mogul Mike Ashley’s 14 year tenure as chairman would come to an end and he would be replaced by PIF Governor Yasir Al-Rumayyan.

Facing a second poor season in the league and languishing at the bottom of the table, Newcastle could benefit from the kind of financial bolstering enjoyed by Manchester City under Abu Dhabi royal Sheikh Mansour, who also serves as vice-chair of one of the emirate's SWFs, Mubadala. Eyeing the success of City under Arab ownership, most Newcastle fans appear to support the PIF takeover.

The challenges to the Newcastle United takeover demonstrate the political complexities faced by SWFs, which are often regarded as appendages of their government owners, driving both economic and political interests. Football is not only big business in Europe, especially in England, it carries significant cultural capital with club chairman occupying positions of high importance for most fans. By owning Newcastle United and turning around its fortunes in the Premiership, PIF will generate both financial returns from media rights and popular cultural esteem among football fans, including rivals.

The motivations behind sovereign wealth fund investment in European football clubs are comparable to trophy real estate assets, which are traditionally favored by Middle Eastern funds and billionaires. Yet, the opaque nature of Gulf funds and their strong ties to ruling families – PIF is chaired by Saudi Arabia’s powerful Crown Prince Mohammad bin Salah – can chafe with democratic states where economic gains are balanced against ethics, transparency and accountability.

PIF is not the first SWF to take a stake in a football club. QIA's bought out French Ligue 1 side Paris Saint-Germain in 2011, making it one of the world's wealthiest clubs. Last year, Bahrain's Mumtalakat bought a 20% stake in Ligue 2 club Paris FC with a view to driving it into Ligue 1 within three years. Earlier this year, Mubadala was touted by La Repubblica as a front runner for a stake in the Italian Serie A side Inter Milan.

These takeovers have had no more political and cultural impact than the commercial sponsorship. Fans will judge club owners by the sporting success they generate - and positive engagement between the owners and fanbase. If PIF can change Newcastle for the better, any lingering concerns will likely melt away. With its deep pockets, the Saudi fund has a high chance of delivering on fans' expectations.

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Related funds PIF
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