An investor group led by Saudi Arabia's Sovereign Wealth Fund
has reached a £300m deal to buy Newcastle United.
Murad, this deal has been months, if not
years in the making.
How did we get to this point?
Well, Mike Ashley, the retail magnate and British billionaire
who owns Sports Direct chain, bought the club 13 years ago,
and it's been tumultuous ever since.
He didn't do very much due diligence
before buying the club, he found all sorts
of financial problems, he is famously a bit
of a cost cutter and penny pincher
and didn't, at least according to the fans,
invest hugely in the playing squad.
A club, under his tenure, has been
relegated twice but also promoted twice back
into the Premier League.
There have been various suitors who looked at the club
at various points.
And the most serious ones seem to have come from a consortium
that had been put together by the British financier Amanda
Staveley who was in talks last year to buy the club for about
£250m.
That deal seemed to fall apart.
Amanda Staveley since has gone away
and got big money backing from the Saudi Sovereign Wealth
Fund.
And this one seems to be further along than any others.
I think it's really down to getting Premier League
approval at this stage.
If we look at revenues and wage costs
of the successful English clubs, there
is an obvious trend isn't there?
And surprisingly, the so-called Big Six in the Premier League,
turn over the most money and pay the biggest wages.
Uefa's financial fair play regulations
sought to address inequality in the league,
but the top clubs' wage bills still dwarf the rest.
Big spending new owners transformed
Chelsea and Manchester City almost overnight,
but is it harder to do that now?
Can Uefa's financial fair play regulations
stop Newcastle's new owners from splashing as much cash
and as quickly as that today?
Yeah, it's an important consideration, this.
When Sheikh Mansour, one of the members of the ruling family,
bought Manchester City, and when the Qataris
bought Paris Saint-Germain, this is
before Uefa's financial fair play rules came into force.
So they were able to effectively spend unlimited funds,
if they wanted to, on players.
Now that they are in force those rules
are supposed to stop overspending on players,
spending beyond your means, or spending beyond what
your revenue base is.
However, the rules do not stop other things
like infrastructure spending.
Newcastle has a really great stadium,
really big stadium, probably doesn't
need to be a big stadium.
It can be spruced up I'm sure.
You can build the infrastructure around the club.
There are, of course, as we've seen in the Manchester City
and PSG cases, ways to get mega sponsorship
deals that you possibly wouldn't be available to otherwise.
There's question marks about how that can be funded.
But the club does have to raise its revenues
to be able to spend big.
The other thing has to be said that Mike Ashley, everything
we've heard is that he didn't, even within the FFP rules,
never really spent a huge amount or as much as revenues
would allow him to spend.
So there is wiggle room there.
But I think you will find with an ambitious ownership group
that they will find ways to spend more.
It will look like a radically different club.
Arash, we're in the grips of a pandemic
and the IMF says that the economic crisis to follow
could rival the Great Depression.
Why have the Saudis made this move now?
The Saudis have been looking for quite some time for football
asset.
Bear in mind that the huge domestic population
- there is not a whole lot of entertainment options
available to them.
There's a huge domestic audience under the age of 35.
They're all on social media, they're all very active,
and they're barely beginning to see the fruits of what's
been available the west for years,
going to cinemas, coffee shops, or just mingling
between sectors.
None of this was really available to the Saudi audience
for many years, and it's slowly becoming
available under performance from Crown Prince Mohammed Bin
Salman.
Its regional rivals or regional allies, like the UAE,
which are a huge funders of football, Qatar,
who is a huge, with.
Sheikh Mansour of course, with Manchester City.
And so if you look at it it's a regional battle for supremacy
in football, the Saudis are the ones without a trophy asset.
Now, this is of course a return to high profile deal-making
for Amanda Staveley.
How important was she in brokering the deal,
and what role will she play if all goes through?
She was incredibly important to the deal.
She's been discussing with Mike Ashley a purchase
of the club for a couple of years
now, leading to some pretty amazing bust-ups
between the two of them, and Mike Ashley
saying very nasty things about her as a negotiator.
I think he describes her as a waste of time,
so what's changed?
What's changed is I guess they were
able to reach an agreement on price,
and were in the grip of a crisis of hitting
the consumer and the retail industry in particularly hard,
the high street, where Mike Ashley is huge.
So this isn't something that has been sparked
by the coronavirus crisis.
But it may be that the coronavirus
crisis has focused the minds of many
of the parties involved here.
Now Amanda's role in particular is
it's all being structured through her private equity
vehicle PCP partners.
This deal could have been struck at the start of last season,
according to one of my sources, had they not
gone through this rigmarole of involving Staveley.
But I think it just shows what a master controller
of the situation she is, and what a master deal maker
she is to basically force it through her structure
in her way and delivering it.
And she's clearly built loyalty with some
of the key protagonists.
This is a very tight knit world, and she penetrated it
and she built loyalty and now the reward
is she gets to play a major role in this.
Murad, critics including Amnesty International
have condemned the deal as sports washing.
Is there a chance that the Premier League could still
block it do you think, or is that unlikely?
The Premier League implement something
called The Owners and Directors Test.
So that brings up questions like the Jamal Khashoggi
murder in the Istanbul Consulate by Saudi agents.
Everyone I've spoken to says that, actually in reality
it's going to be very, very unlikely that this deal won't
pass from saying that the Saudis are not
proper owners of a football club.
It's a different matter and political incident.
But I just can't see that being likely.
And finally, what do you both think
that Newcastle fans can expect if this all goes through?
I've been getting I've been getting inundated with messages
from fans who, half of them should probably
become investigative journalists because they're so
on top of some of this stuff.
But the level of loyalty and passion from the fan base
is incredible.
When you have a owner, which is so
tied to the state, authoritarian state,
controversial state, a state that
has launched a war in Yemen, has murdered a journalist
in Istanbul, and lied about it for weeks
before confessing to do it.
When you have this kind of owner it's
subject to potentially reflecting on the club as well.
It seems like the devotion to the club
is such that success on the pitch is what matters the most,
and the fan base is very focused on that.
If you want to get to the top of the Premier League,
that isn't just £100m of spending on players.
It's 200, 300, 400 million.
The reason why is there is a direct correlation
between your wage bill and hour final league placing.
And that's quite a huge ramp up to do that.
But we do have a transfer market that
looks like it's going to be hugely depressed.
There's going to be a lot of clubs
who don't want to spend on players, who can't afford
to spend on players, and in fact may even be on a fire
sale as a result of the pandemic and the need
to get new revenues in.
Newcastle look like they're going
to be in a stronger financial position
and it could get pretty high quality players
at a cheap price.
So it's going to be all change you would think.