Newcastle United owners the Saudi Public Investment Fund are considering selling a stake in the club in order to fund a new stadium and training ground. But who might buy it?
The Times reported last week that PIF are open to parting with about 25 per cent of their shares, which equates to about 21.25 per cent of the club in total, excluding the stake owned by Reuben Brothers.
Sources have briefed that Newcastle are now commanding a valuation of £1.5bn. Even accounting for the hundreds of millions of pounds in funding PIF have put in since the £305m takeover in 2021, that is a quite remarkable markup.
Since the news broke, some commentators have suggested that PIF’s interest in Newcastle is waning, either because of wider problems within the sovereign wealth fund, Profit and Sustainability Rules (PSR), or the complexities of replacing St James’ Park with a new stadium.
The timing, just weeks after PIF pulled funding for LIV Golf and in a period when the Saudis have scaled back umpteen so-called ‘giga projects’, was certainly curious, especially given the pitiful season which has just come to an end on the pitch under Eddie Howe.
However, PIF have stressed that they are, in fact, still committed to Newcastle.
So, who might that 21.25 per cent stake appeal to?
“There is a case for someone with high net worth to use this as part of a plan to achieve a closer relationship with PIF,” says University of Liverpool football finance lecturer and Price of Football Podcast host, speaking exclusively to Geordie Boot Boys.
“The Public Investment Fund is a valuable market in its own right, and investing in Newcastle United might simply be an entry fee.
“The potential benefits from an individual or corporate point of view could be very significant on the back of that. It helps to cement and develop relationships with powerful people in PIF. Business is often about who you know. If you can prove yourself to be a good business partner in a venture like Newcastle United, that sends a good signal.
“When it comes to contracts, I always talk about personality, integrity and competence, i.e., do I like you, can I trust you, and can you do the job? Buying into Newcastle is a way of cementing that.
“Perhaps that might be a US corporate, but we can only speculate.”