Why aren't PIF-owned Newcastle United spending Saudi style?

For most of football’s summer transfer window, much of the sports media’s attention has been occupied by the advances of the Saudi Pro League for the big names of world football.

With the Saudi Public Investment Fund (PIF) buying majority stakes in the Pro League’s ‘Big Four’, namely Al-Ittihad, Al-Ahli, Al-Nassr and Al-Hilal, they’ve been able to finance the arrival of superstars to the Kingdom.

They’ve already snatched up superstars like Ronaldo, Karim Benzema, and World Cup-winner N’Golo Kante, while they’ve made serious bids for Messi, Neymar and, most recently, Kylian Mbappe.

However, there’s one transfer involving another French player and the PIF that has garnered much less attention. Yet this transfer reveals both the enormity and contradictions of Saudi’s global reach in the game.

"For most of football's summer transfer window, much of the sports media's attention has been occupied by the advances of the Saudi Pro League for the big names of world football"

The player in question is Allan Saint-Maximin, until recently a winger on the books of Newcastle United, the PIF’s only non-Saudi footballing asset and considered the jewel in its crown after a controversial takeover in 2021, while his suitors were the also-PIF-owned Al-Ahli.

This week, the French forward became the fourth high-profile player to sign for the Jeddah club for an undisclosed fee.

Saint-Maxim was considered one of Newcastle’s most talented players, so some Newcastle fans might be miffed at the sale.

Newcastle United – when you factor in their ownership by the £600 billion-valued PIF and their status as a one-city club in the world’s richest, most prestigious league – is likely the wealthiest football club on earth.

So, never mind merely trying to hang on to the talented Saint-Maximin, shouldn’t they be the ones trying to sign the likes of Mbappe?

As Kristian Ulrichsen, Fellow for the Middle East at Rice University’s Baker Institute, put it to The New Arab: “The biggest difference is that Newcastle is bound by Premier League as well as UEFA financial fair play regulations [FFP]”.

FFP was first introduced by Europe’s governing footballing body UEFA in 2009 due to the ubiquity of debt and loss in the game. The premise is simple: clubs cannot be allowed to spend more than they earn in revenues. 

Specifically, the most recent FFP rules state clubs are allowed to incur losses of no more than 60 million euros (£51 million) over three years. The EPL also has its own FFP rules that seek to ensure financial propriety.

In FFP terms, Newcastle do not yet have enough revenue to “embark on the sort of unrestrained spending we are seeing from some of the [PIF-owned] Saudi clubs”, as Ulrichsen puts it. 

Saudi clubs, of course, are not subject to any regulations on spending imposed by domestic or external governing bodies.

This is where long-suffering Newcastle fans might feel aggrieved. For a club always regarded as a sleeping giant, they’ve spent their recent history fighting relegation from the EPL and penny-pinching on transfers.

Now they have ultra-rich owners who can easily offset any revenue shortfalls, so the expectation might have been to see more ‘elite’ signings at St James’ Park.

On the other hand, maybe Newcastle don’t need and don’t want this approach. PIF’s one-season-old tenure at Newcastle has been successful so far despite the constraints of FFP regulations.

"The biggest difference is that Newcastle is bound by Premier League as well as UEFA financial fair play regulations"

In the first full season of PIF ownership, the Tyneside club made the top four of the EPL and thus qualified for the Champions League. This demonstrates to Ulrichsen that “they have made rapid progress, faster by comparison to Manchester City at the same stage of their new ownership in 2010”.

The PIF could be looking at the Abu Dhabi-owned Manchester City less as a model to be emulated and more as a cautionary tale, with the club facing allegations of over 100 breaches of both EPL and UEFA financial regulations.

As Freddie Bunn, the Media and Events Officer for the Newcastle United Supporters Group London told The New Arab, “Fans are currently backing the considered approach that the owners have taken” when it comes to transfers and developing players.

Bunn believes Newcastle will attract “bigger and bigger talent as we grow on our journey, but hard work is always at the centre of the ethos of the club, and we don’t need 200 plus million signings to achieve that”.

But this brings us back to the transfer of Allan Saint-Maximin. With the PIF owning majority stakes in both Newcastle and Al-Ahli, some alleged that the PIF had been deliberately inflating Saint-Maximin’s reported transfer fee of £36 million to invest capital in Newcastle by stealth and get around FFP.

It could be the beginning of the PIF’s own assault on FFP in order to fast-track its prime asset to elite status. On the other hand, as Sam Mulliner, producer and presenter of Newcastle Fans TV, pointed out to The New Arab, Saint-Maximin’s transfer fee is, by today’s standards, fair, given the player is still 26 and has demonstrable talent.

However, with the PIF able to own four clubs in the same league, something prohibited in almost every other league on earth, and with it also owning Newcastle, is it best to look at these clubs as separate franchises or all part of a mega PIF-crafted franchise? The ‘joke’ among Newcastle fans is that if Al-Hilal do sign Mbappe, they could simply loan him out to Newcastle, circumventing FFP.

When Edinson Cavani was approached about a potential move to the Pro League, it wasn’t by a representative of a particular club, but by a representative of the PIF.

There are several new realities, complete with all the ethical dilemmas they may pose, that Saudi Arabia is forcing the footballing world to face.

The Saudis may not want football constrained by things like FFP.  Therefore, also considering its ‘Saudi first’ investment policy, it will remake football in its own image and advertise to the rest of the world how it ought to be done. The Saudis know that money talks and it often talks the loudest. 

There’s a myth that Saudi investment is somehow external to the culture of the Kingdom. But the major thrust of Saudi investment is geared towards bringing wealth and prestige not just physically to the Kingdom, but in line with the values of those who rule it.

This is where the terrible human rights record of the Gulf state ought to clash with the so-called liberal democratic world, yet this is also where ‘sportswashing’ ensures it rarely does.

"There are several new realities, complete with all the ethical dilemmas they may pose, that Saudi Arabia is forcing the footballing world to face"

However, while some see the emergence of the Pro League as the culmination of football’s soulless monetisation and moral abandonment, Ulrichson thinks its model is not currently fit to be a long-term project.

“It’s hard to see how the Pro League can become financially sustainable,” Ulrichson told The New Arab.

“For the PIF-owned clubs, a measure of success or failure may be apparent several years down the line if the PIF can divest the stakes to genuinely private franchises willing and able to invest in the Saudi league.”

Newcastle, on the other hand, will eventually get to a fiscal place where FFP is no longer a problem and it can be all systems go in terms of spending.

For now, despite the headline-grabbing glamour of the Saudi Pro League, it’s the PIF’s club on rainy Tyneside that looks to be the jewel in its footballing empire.

Sam Hamad is a writer and History PhD candidate at the University of Glasgow focusing on totalitarian ideologies.