Why did Saudi Arabia Buy Newcastle?
Saudi Arabia’s recent, unprecedented acquisition of Newcastle United has left many people wondering why the kingdom chose to invest so large a sum of money. To answer this question, it is important to understand the motivations behind the deal and the effect it will have on the club’s future.
For the past 10 years, Newcastle United has been owned by businessman Mike Ashley, who became an unpopular figure among the fan base and failed to transition the club into title challengers in the Premier League. As a response to this, Saudi Arabia’s Public Investment Fund, who has an estimated net worth of $400 billion, negotiated with both Ashley and financier Amanda Staveley to purchase the club.
The new owners plan to invest over £300 million into the club in an effort to make it competitive in the coming years and have also shown intent to invest in the wider local community. This move was welcomed wholeheartedly by the club’s supporters, who hope that their team will become a challenging force again.
In an interview, Richard Elliot, an industry analyst, believes that Saudi Arabia’s acquisition of the football club was primarily made as a strategic move. He explains that Saudi Arabia is no stranger to investing in football clubs, as it recently became one of the owners of the world’s richest football team, Manchester City. In his opinion, the PIF had purchased Newcastle United as a means to increase its market power in the Premier League, while also setting an example to other teams who may be considering investments from the Middle East.
Geopolitical Impact Of The Deal
Due to the controversial human rights record of the Saudi Kingdom, the deal has caused great controversy in the international political community. Fans and experts alike have questioned the morals of a footballing organization allowing a government with a controversial record to purchase a Premier League club. The Saudi-led takeover has sparked a wider debate on modern football’s role in geopolitics.
On the other hand, some pundits have argued that the Premier League’s decision to approve the deal was a positive move, showing international progressiveness in a country widely known for its human rights and freedom of speech issues.
Stacey Galbraith, a British Political Analyst, has argued that the kingdom’s acquisition of the club should be seen as a diplomatic move between the UK and Saudi Arabia as well as a sign of warming relations between the two nations. She further explains that the move could be paving the way for increased political collaboration in the Middle East, a move that has been welcomed by many British politicians.
Economic Benefits For Newcastle
The economic benefits of Newcastle’s new ownership have been widely discussed. Much of the club’s finances have been notoriously mishandled by its previous owners, leading to the club struggling to stay afloat. However, the high level of investment that the Saudi Kingdom has promised to inject in the club will help it to stay competitive in both the short and long term.
The desire of the new owners to contribute to the local community in form of social projects has also been widely acclaimed. These projects will include building new infrastructure, improving local schools and providing better services to those in need within the region. Not to mention, the potential increase in tourism, brought about by the prestige of playing in a Premier League team, which could bring economic growth to the area.
Ian Daley, an economist at the University of Sussex, argues that the takeover could generate more than just economic benefits for Newcastle. An additional advantage, in his opinion, comes from the fact that the new owners are likely to bring in people with strategic business experience with the aim of ushering in a new era of professional football in England, wherein clubs are owned and operated like legitimate businesses.
Effect On The Club’s Popularity
The Saudi Kingdom’s takeover of Newcastle United has also had an effect on the club’s social following and global reach. Football clubs have long been used by governments and corporate entities to increase their visibility on a global scale and Newcastle is no exception.
The move has already registered a positive response from fans around the world, who have welcomed the investment with open arms. What’s more, the new owners have promised to increase the clubs global reach even further, in an attempt to turn it into a ‘world-renowned’ club. To do this, they have planned to intensify their marketing and media presence, strengthen their commercial partnerships, and develop their digital infrastructure.
Sports writer John Jackson believes that the influx of investment from Saudi Arabia could usher in a new era of professional football in England. He further explains that, although some may be wary of the takeover at first, the potential benefits could be huge for the club and its fans.
Negative Connotations
Despite the potential of the takeover to bring Newcastle stability and success, there are also various negative connotations attached to the deal. This is mainly due to the fact that Newcastle United is now owned by a state having an alleged human rights record.
Critics of the deal have warned that Newcastle United could become a ‘beacon of influence’ in the global football world – an unfair advantage that some see as unfair considering the background of its owners. For example, there are those who think that the club could be used to promote particular political ideas, or to push pro-government agendas.
Furthermore, the takeover has raised questions over the standards that football clubs should abide by when deciding on ownership. It has also prompted questions as to whether or not a club should be allowed to be owned by a nation, or if it should be kept in the hands of private owners.
Effect On Competing Teams
Critics of the deal have argued that allowing the Saudi Kingdom to purchase Newcastle could lead to further financial inequality in the Premier League. That is to say, teams already funded by billionaires such as Manchester City, Chelsea and Manchester United could become even more superior financially, due to their wealth being combined with that of the PIF.
However, some have argued that the influx of investment will benefit the whole league in the long run, as it will force teams to become more competitive in order to keep up with the big clubs. This could push the league as a whole to become successful and competitive on the world’s stage.
On the other hand, some experts have argued that the wealthy owners of other teams may find it hard to keep up with the extreme levels of investment being put in by the Saudi PIF. This, according to some, could lead to monopolies being formed in the Premier League, making it difficult for any team other than the ‘big six’ to mount a serious challenge for the title.
Conclusion
It is clear that the acquisition of Newcastle United by the Saudi PIF has had a huge impact. On the one hand, it has been welcomed by the fans for its potential to bring success and stability to the club both short and long term. On the other hand, the club’s new owners and the ethical and morality issues associated with them, have been criticized and debated.
The deal has also brought about the contentious topics of football club ownership, geopolitics, human rights and economic growth. It is still yet to be seen how the deal will pan out, and whether or not it has been a beneficial move for the Premier League as a whole.
