Football is a central crossroads between society, politics and business. The proposed purchase of Newcastle United (a football club active in the English Premier League), by a consortium whose majority shareholder is the Saudi Public Investment Fund (PIF), is peaking interests and reactions across Europe and the Arab Gulf—meshing the sport-business-geopolitical relationship in a single nexus. Newcastle is a club that carries huge tradition in English football and the potential buyers’ seek to attract a large global audience around the team and its future goals, starting from Saudi Arabia, a country that already boasts millions of supporters of the team and football more generally. 

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With the 2019 turnover at some £176 million (roughly €195 million) which will likely drop in 2020 due to the effect of the pandemic, the purchase price of £300 million (re: €332 million) is within the reach of the consortium led by the PIF. More than 97% of Newcastle fans, according to a survey, say they are in favour of the purchase, which must now be confirmed by the English football governing authorities. After Qatar’s European football debut with the purchase of Paris Saint Germain by the Qatar Investment Authority and the Emirate property (Abu Dhabi United Group) of Manchester City, the Saudi initiative appears as an attempt by the Kingdom to also enter into one the most important sports business in the world.  

 

Done deal? Not Yet.

 

Unfortunately, the story has been complicated. In mid-June 2020 a World Trade Organisation report raised doubts about the effectiveness of the measures against intellectual property piracy adopted by the government of Saudi Arabia in the BeOutQ affair—the pirated satellite network that broadcast content owned by the Qatari BeIn network, excluded from transmissions to the territory of Saudi Arabia since 2017 (the year the diplomatic crisis between the GCC countries and Qatar began), but holder of the rights for the MENA region of many primary European football leagues and other international broadcasts. The WTO did not find any evidence that BeOutQ operates from Saudi Arabia, but only highlighted that the Saudi authorities should have implemented procedures and sanctions against intellectual property infringements.

 

More than one attempt has been made in the UK to link the BeOutQ affair with the proposed purchase of Newcastle United by the PIF. The story took on political and diplomatic connotations, with tensions between Saudi Arabia and Qatar in the background. After the statements by the Saudi authorities to distance themselves from BeOutQ’s activities and its future commitments, it is difficult for the Premier League to deny the authorisation to transfer ownership of Newcastle to the new owners. Doing so would damage relations between the United Kingdom and Saudi Arabia whose commercial exchanges impacts much more delicate and strategic sectors than football, such as aerospace, armaments and, obviously, hydrocarbons. 

 

For their part, the Saudi authorities have denied any involvement in BeOutQ’s activities and have affirmed their commitment to combat any infringement on intellectual property and to protect the television rights of the main world football events. In recent days, after the WTO report, the president of the Saudi football federation, Yasser Hassan Almisehal, wrote to the heads of the main international sports organisations — from FIFA to the IOC — to underline the commitment that his federation and the whole Saudi government will put into the fight against piracy.

 

It is in the interests of Saudi Arabia to implement measures that effectively tackle hacking and reassure the international football community and the WTO. And, it is in the interest of the international football authorities to favourably view this commitment and not take a prejudicially hostile position in relation to the PIF’s purchase of Newcastle United. Denying the PIF’s investment would not mean enhanced protection of television rights; the two portfolios are separate and actions in one should not prejudice actions in another. In short, Saudi Arabia should be able to buy Newcastle United.
 

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03 July 2020

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