Saudi Arabia’s sovereign wealth fund has successfully purchased England’s Newcastle United soccer team after 18 months of drawn-out disputes. The Crown Prince of Saudi Arabia is believed to be behind the $409 million takeover of the premier league club. There are concerns over the involvement of the kingdom because of Saudi Arabia’s record on human rights.
A consortium led by the Public Investment Fund, the kingdom’s sovereign wealth fund, completed the transaction on October 7th.
British billionaire business tycoon Mike Ashley is selling the club after 14 years. According to CNBC, fans are happy that Ashley’s tenure has ended. Many have blamed his cost-cutting measures for devastated the team’s performance and reputation.
Ashley sold 80% of the team to the Saudi consortium. Property developers Simon and David Reuben and PCP Capital Partners will split the remaining 20%.
The Saudi consortium has pursued the takeover since 2017 but has stalled many times. The biggest hurdle was the English team’s concern over how much control the Saudi state would have in their affairs.
Last year both sides walked away from a previous deal. The consortium couldn’t prove enough separation between the group and the Saudi state. Their concern revolved around Crown Prince Mohammed bin Salman’s proximity to the team.
The Premier League was quick to announce that the Saudi Prince would not be the person in charge of making decisions at Newcastle.
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“The Premier League has now received legally binding assurances that the Kingdom of Saudi Arabia will not control Newcastle United Football Club.” Premier League said in a statement.
Created in 1971, the Public Investment Fund invests money on behalf of the government of Saudi Arabia. According to Marca, the fund makes the bulk of its money from oil, which Saudi Arabia has sold all over the world. The fund seeks to find ways to make money in the long term as the country moves away from dependence on oil.
The fund has invested in many well-known companies. Disney, Uber, Facebook, Starbucks, and Pfizer are all among the fund’s investments.
A post shared by Newcastle United FC (@nufc)
Amnesty International says the purchase is sports washing, which is investing in sport as a distraction from poor human rights records.
“Ever since this deal was first talked about we said it represented a clear attempt by the Saudi authorities to sports wash their appalling human rights record with the glamour of top-flight football,” Sacha Deshmukh, Amnesty International’s U.K. chief executive, said in a statement.
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Sources: CNBC, Marca
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