Newcastle United fans are celebrating after the Premier League gave the green light to the £305 million takeover of the club by Saudi Arabia-backed Public Investment Fund. The takeover ends Mike Ashley’s 14-year tenure at the club.
Rumours of a potential takeover surfaced in April 2020. Public Investment Fund, PCP Capital Partners, and the Reuben brothers thought they had the deal over the line. However, Saudi Arabia’s atrocious human rights record, the ongoing large-scale piracy of sports broadcasting in the region, and fears the Saudi state would control the club put the brakes on proceedings. It appears everything has been ironed out with the Premier League sanctioning a £305 million deal.
Public Investment Fund has assets above £250 billion, making Newcastle United one of the wealthiest clubs in the world, leaving its loyal fans dreaming of making marquee signings and their team challenging for major honours. It appears “The Magpies” will get a new manager, too, with Steve Bruce the favourite with the best sportsbooks to be the next Premier League manager to leave his post. Bruce told The Daily Telegraph that he wants to continue at the helm but is aware new owners typically want a new manager.
Newcastle United: The sleeping Giant
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The term sleeping giant is used far too much when talking about football clubs, but Newcastle United is precisely that. Newcastle has spent 89 seasons in English football’s top flight and has never dropped below the second tier since becoming a member of the Football League in 1893.
Newcastle is ranked ninth in English football regarding trophies won. Its passionate fanbase has seen its beloved Magpies lift 14 trophies, but there has been limited success for decades. Newcastle last won the top-flight title in the 1926-27 season. It has not won the FA Cup since 1954-55. They won the now-defunct UEFA Intertoto Cup in 2006, but that is considered a minor competition. The Intertoto Cup aside, Newcastle last reached a major final in 1998-99 when they lost 2-0 to Manchester United in the FA Cup final.
The club has the eighth-highest revenue in the English Premier League, thanks, in part, to its loyal fanbase turning out week in week out despite poor results. An average of 48,366 Geordies turn out to every home game, the seventh-highest in the Premier League.
A Lack of Investment Has Hurt Newcastle
Fans accused then-owner Ashley of failing to invest in the team, but the businessman’s net spend while at the club was £176,780,000, which is an incredible sum. That money averages at a shade over £4.3 million per player.
The club issued a statement before the 2020-21 season stating it had a net spend of £120 million since the summer of 2019, essentially saying it would not be giving manager Steve Bruce any funds to strengthen his squad. There has been a lack of significant investment compared to some other Premier League sides, but the money made available has been squandered by Bruce and previous managers.
For example, they paid German outfit Hoffenheim a club record £40 million for Brazilian forward Joelinton in 2019-20. He has only ten goals in 88 appearances, hardly a great return on the massive transfer fee. You will not find a single Newcastle fan who thinks Joelinton has not been a major flop.
What Next For Cash-Rich Newcastle?
It is an exciting time for Newcastle fans now they have owners who can splash the cash. However, Financial Fair Play rules dictate a club can only lose £105 million across three seasons, which means the new owners cannot simply go out and buy all the best players with their bottomless funds.
Manchester City has mega-rich owners. It has a net spend of £1.2 billion since 2008 when the new owners took over. This only tells part of the story because those owners redeveloped City’s stadium and turned the club into a global brand, massively increasing revenue streams. This, in turn, led to more success in major competitions and kept the Citizens in line with financial fair play.
Newcastle’s new owners will need to do the same. Newcastle has a massive, loyal British fanbase but not so much on a global scale. Furthermore, the club will struggle to attract the world’s most stellar talent because the North East of England is nowhere near as glamorous as London, for example. Exciting times are ahead for Newcastle’s fans, and we only have a couple of months before the January transfer window opens, which will give some indication of the new owners’ plans.
