For those who aren't up to speed,
Newcastle is my home football club, it was recently taken over by a consortium of buyers led by the Saudi Arabian sovereign wealth fund known as the Public Investment Fund (PIF). This earned Newcastle United (NUFC) the new title of "richest club in the world"*.
First of all, the money
* while our owners are the richest football club owners in the world, there is no guarantee that we get access to even a fraction of that wealth.
So how much are we talking about here anyway? As I mentioned above, the buyout was performed by a consortium of investors, their net worths are as follows:
Saudi PIF: $500 billion
Reuben brothers: $21 billion
Amanda Staveley: $170 million
The former owner, Mike Ashley looks relatively poor in comparison with a measly $3.4 billion.
The sale was completed for $402 million, a 228% markup from its purchase by Ashley in 2007 for $176 million.
Social Implications
I live right in the centre of Newcastle, just across the road from the stadium, so I've seen first-hand how enthused the supporters have been to become the richest club in the world. Skinheads who'd normally have told a Saudi to "fuck off back to Pakistan flannel head" were now walking around town proudly wearing tea towels on their heads, singing about Mohammed bin Salman Al Saud. If the purchase was a publicity stunt, it worked. Perceptions of Saudi Arabia are sure to improve when they own a top-flight football club in the most popular league on earth.
Another thing I'd like to mention is that Newcastle is now likely to be the destination for a lot of money. All these footballers on high salaries, the visits from wealthy owners, and the Nouveau riche that will be attracted to the glitz and glamour. My prediction is that Newcastle businesses will do well, but more so that now is an excellent time to puy property and land in the area (if you're looking for potential investments).
Investor profiles
The investors in Newcastle United have equally interesting backgrounds. Varying from crafty deal brokers to oil-rich royalty.
Amanda Staveley
Amanda Staveley has a track record of deal brokering and is known for her connections to middle eastern wealth and royalty. In 2008, Staveley played a prominent role in the investment of £7.3 billion in Barclays by the ruling families of Abu Dhabi and Qatar, and by the Qatari sovereign wealth fund [source]. In 2008 she also assisted Sheikh Mansour of Abu Dhabi in his purchase of Manchester City, so this is not her first rodeo!
Reuben brothers
The Reuben brothers together make the second richest family in the UK. Interestingly, NUFC is not their only large investment in Newcastle. They have also made the following investments:
- Monument Mall: bought for $65 million
- Pilgrims Quarter: plans for a $265 million (not including the price of land) office/shopping/leisure development right in the city centre which has already been confirmed to be the new regional headquarters for HMRC when completed.
- A five-star hotel and restaurant development: (also city centre) for an undisclosed cost, to be built in place of an old fire station
- Bank House Development: A 14 storey apartment block, to be located right next to Pilgrims Quarter.
In total, almost $1 billion was invested in a very short space of time. The investments are both synergistic and beautifully timed, monument mall for example sold for $100 million a few years back, but was on sale thanks to the pandemic. The offices are located across the road from monument mall, meaning the extra 9000 workers will contribute to retail footfall. A successful football club will mean the wealthy are more likely to move their businesses to the Pilgrim Quarter offices and move their families to the Bank House Development.
Saudi PIF
The Saudi Public Investment Fund is one of the largest sovereign wealth funds in the world. It was set up to help invest the profits of the nations oil wealth for the people. There was a fair amount of controversy surrounding this deal due to Saudi Arabia's human rights, women's rights, digital piracy & free press violations. Eventually, Saudi Arabia cleaned up their sports piracy problem and the sale was allowed to go ahead, much to the dismay of many human rights activists. Many see this as an investment by the Saudi royal family rather than an investment on behalf of the people of Saudi Arabia.
Thanks for reading, hope this was interesting!