The Saudi Arabia PIF majority ownership of Newcastle United has always been a complex one.
Why exactly did they but the club and most importantly, what do they intend to do with it?
This summer has been full of surprises for Newcastle United fans.
No surprise that many of them are now questioning even more what is going on?
Some helpful insight has now been provided, in my opinion.
The complex Saudi Arabia PIF ownership and ‘backing’ of Newcastle United significantly explained by what follows below.
Chris Waugh covers Newcastle United for The Athletic and after asking fans for questions to answer on the current state of play at NUFC, he was asked this one…
‘We’re constantly told the owners are still 100 per cent supportive. If so, why did the club get milked for nigh-on £10million to buy Jaissle out of his Al Ahli contract? Buy-out clauses for breaking a contract are always negotiable. It was a perfect chance to support the club by shaving millions off, yet the owners chose not to. Why?’
Chris Waugh beginning his answer: ‘PIF’s lack of ‘favours’ for Newcastle in this regard is something supporters have had to get accustomed to, and it certainly does not fit with the assumptions made when the takeover first happened nearly five years ago. Without getting into the legalities around breaking contracts, Newcastle were negotiating with an autonomous entity in Saudi club Al Ahli. I realise many will struggle to grasp that, or may cynically suggest that is a disingenuous representation of how things work, but that is what multiple sources at St James’, PIF (Saudi Arabia’s Public Investment Fund) and associates of the club’s majority owners insist. Newcastle and Al Ahli may both be part-owned by PIF, but different figures within that organisation are on the boards of the two clubs. They are treated independently and so, although they are a higher-profile club in the Premier League, PIF will not ask Al Ahli to merely acquiesce to Newcastle’s demands. PIF, as a sovereign wealth fund, is on the boards of both clubs, but it leaves the footballing staff in charge to run things.’
I think this is very important for Newcastle United fans to understand, especially those who seem to think that the entire Saudi Arabia Public Investment Fund (PIF) is there to try and bring success to NUFC.
The man from The Athletic going on to say: ‘The same explanation has been offered as to why Riyadh Air, or another PIF company, does not just pour money into Newcastle through sponsorship deals. They are independent businesses within PIF’s portfolio, and so, according to those with inside knowledge, a clear business case must be provided as to what Riyadh Air would gain from such a partnership. They are not there merely to subsidise Newcastle, but to thrive as a business in their own right.’
I think the reality is, Newcastle United are just one of many businesses that the Saudi Arabia PIF has bought control of, in order to later sell at a later date and make a profit.
Chris Waugh then explaining: ‘With Jaissle, Al Ahli did not want to lose the 38-year-old, who has led them to back-to-back Asian Champions League titles, and that is why they demanded that Newcastle meet his release clause, which was reportedly around €11million (£9.4m; $12.7m). Al Ahli also did not want them to confirm Jaissle until they were advancing in their efforts to replace him, which led to a four-day delay in announcing the German as Howe’s successor. PIF did not step in and tell Al Ahli to merely release Jaissle for free, because that is not how the individual clubs and companies under its control operate — they are treated as separate entities, rather than made to do favours for other PIF-owned assets. The sceptics among the fanbase will point to this as another example of PIF being disengaged and losing interest, though the message from those at Newcastle and those close to ownership is that this is not the case.’
I think the bottom line is that the Saudi Arabia PIF haven’t suddenly abandoned Newcastle United, it is merely a continuation of their hands-off approach of running one of their numerous businesses that they hope to prove successful, within certain guidelines and probably limitations…