'Geordie Arabia': Saudi ownership allowed to execute Newcastle sponsorship deals

'Geordie Arabia': Saudi ownership allowed to execute Newcastle sponsorship deals
Newcastle United can start signing up sponsors linked to Saudi Arabia after the English Premier League introduced rules to end a brief ban on such deals following the club’s controversial Saudi takeover.
3 min read
15 December, 2021
Saudi Arabia’s Public Investment Fund (PIF) bought an 80 percent stake in Newcastle United in a controversial takeover [source: Getty]

A temporary ban preventing Newcastle United’s Saudi ownership from signing up sponsors linked to the kingdom was lifted on Tuesday. 

The Saudi state's sovereign wealth fund took control of Newcastle in October, prompting a brief ban on any clubs cashing in on commercial deals with companies linked to their investors.  

On Tuesday, the English Premier League agreed to new regulations allowing for sponsorships from companies associated with the club's owners, as long as the board decides they are "fair market value".  

"The unhappiness within the Premier League around the Newcastle takeover will be tempered to some extent by this move," said Simon Stone, BBC Sports broadcaster Tuesday. 

"However, what it has done is allow Newcastle the scope to start arranging their own commercial deals in line with their status as a newly-enriched club with roots in Saudi Arabia." 

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Newcastle can now ink deals with Saudi companies, such as Saudi Arabian-owned oil giant Aramco, but it cannot agree to contracts that are artificially boosted to sidestep Financial Fair Play rules. 

The English Premier League has the authority to assess whether each deal has been negotiated at a fair value rather than being inflated. The league will weigh up the value of the deal against a database of similar transactions and consult independent assessors. 

However, critics of the controversial takeover are not convinced by the new measures. 

There are no limits on the number of deals a club can make and questions remain over whether the measures are too broad. There is also uncertainty about how the value of a deal is measured, based on a club's brand value, success, fanbase, as well as its appeal in different global markets. 

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Saudi Arabia’s Public Investment Fund (PIF) bought an 80 percent stake in Newcastle to end the ownership of retail tycoon Mike Ashley. 

The PIF provided the football league with legally binding guarantees that the kingdom does not own the club. However, it has been unable to say publicly how that fits with the company board being headed by Saudi Crown Prince Mohammed bin Salman and mostly featuring government ministers. 

Human rights groups were outraged by the Newcastle United takeover. 

Saudi Arabia has a longstanding history of human rights abuses, both inside and outside of the kingdom.

The Gulf country has been directly involved in the prolonged war in Yemen, in which more than 10,000 children were killed or maimed since the escalation of conflict in March 2015 according to the UN. 

Senior officials have been accused of murdering Saudi journalist Jamal Khashoggi in Turkey. However, three years on, there has been little to no accountability in international courts. 

It is understood that Newcastle United and Manchester City, controlled by a member of Abu Dhabi's royal family Sheik Mansour, were the two clubs who voted against the new rules on associated-party transactions on Tuesday.