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Saudi Arabia and Newcastle United: A controversial takeover

May 22, 2020

After Saudi Arabia resolved a dispute with Qatari broadcaster BeIN Sports, a Saudi-led consortium has taken over Newcastle United. The purchase — condemned by human rights campaigners — could not happen in Germany.

Premier League - Newcastle Utd v Leicester City
Image: picture-alliance/Actionplus

A consortium led by Saudi Arabia's sovereign wealth fund, the Public Investment Fund (PIF), completed a takeover of Premier League football club Newcastle United on Thursday, the club confirmed.

The move comes after Saudi Arabia resolved a long-running dispute with Qatari broadcaster BeIN Sports over the illegal streaming of Premier League matches.

As part of the dispute, which included a Saudi-led economic blockade of the Emirate from 2017-2021, Saudi Arabia banned BeIN Sports from broadcasting Premier League football in the Kingdom – while allegedly turning a blind eye to BeIN's broadcasts being illegally streamed by a pirate service called beoutQ. BeIN claimed that beoutQ was run from within Saudi Arabia using Saudi Arabsat satellites, claims which were denied by Saudi Arabia but upheld by the World Trade Organization.

When a Saudi-led consortium attempted to purchase Newcastle United in 2020, rights holder BeIN successfully lobbied the league to block the deal, citing copyright infringement and "industrial-scale theft" of its broadcasts.

But now that the dispute has been resolved, and with the Premier League reportedly receiving "legally-binding assurances" from the government of Saudi Arabia that it will not be the entity in full control of Newcastle, the £300m ($408m/€350m) takeover of Newcastle finally went through, bringing to an end the unpopular 14-year reign of former owner Mike Ashley.

British retail billionaire Ashley purchased Newcastle in 2007 for around £134 million ($164m/€149m) but, despite initial popularity, his ownership of the club has since been the subject of sustained fan protests of varying degrees of intensity.

Under Ashley's stewardship, interference in the first-team squad and transfer policy as well as a lack of investment in the club's infrastructure have seen the "Magpies" relegated twice.

Now, with the team back in the Premier League since 2017 and currently 19th in the table, a new era is about to begin. Unfortunately for long-suffering Newcastle supporters, however, the identity of the potential new owners is set to create an even bigger quandary.

Jamal Kashoggi
Saudi Arabia is suspected of being behind the killing of critical journalist Jamal KhashoggiImage: Getty Images/Y. Akgul

Saudi Arabia accused of 'sportswashing'

Under the terms of the takeover, the PIF, which is chaired by Mohammad bin Salman, the Crown Prince of Saudi Arabia, has acquired an 80% stake in the 129-year-old club.

For the 36-year-old Crown Prince, known as MBS, the takeover of Newcastle represents the latest in a series of strategic moves in global sports as his country attempts to reduce its dependence on oil, diversify its economy and win influence among western powers.

But human rights activists and experts have also accused Saudi Arabia of "sportswashing" – the practice of laundering a nation's global image through the prism of sports to gloss over more problematic issues.

In the case of Saudi Arabia, this concerns what Amnesty International describes as "egregious human rights violations," including the repression of women's rights and 146 beheadings in 2020 alone, not to mention accusations of war crimes in the civil war in Yemen.

In October 2018, Saudi journalist Jamal Khashoggi, whose criticism of MBS regularly appeared in the Washington Post, was brutally murdered inside the Saudi embassy in Istanbul by a 15-man Saudi hit-squad. The CIA concluded that the assassination had most likely been ordered by MBS, a finding the Crown Prince rejects as "flawed," although he has officially taken responsibility for Khashoggi's death.

In response to the initial proposals last year, Khashoggi's fiancée, Hatice Cengiz, penned an open letter to Newcastle United supporters, urging them to oppose the Saudi takeover of their club.

"You as the loyal fans have a big say in this," she wrote. "I implore you all to unite to protect your beloved club and city from the Crown Prince and those around him. They are making this move not to help you and not with your best interests in mind but solely to serve themselves."

Cengiz repeated her plea this Thursday, telling British broadsheet The Telegraph that the takeover would enable the Crown Prince to "wash his reputation and sully the name of sports."

Powerless fans

After 18 months of waiting and 14 years of Ashley, however, the desire among Newcastle fans to see the back of the current ownership appears to outweigh any misgivings about their club being misused as a marketing vehicle for a repressive foreign dictatorship.

Indeed, according to a poll carried out last year by the Newcastle United Supporters Trust (NUST), 97% of those surveyed said they would be in favor of the takeover.

Newcastle UNited fans protesting
Newcastle United supporters are happy to see the back of Mike Ashley - but they still don't have a sayImage: picture-alliance/empics/R. Sellers

What's more, the tenor among Newcastle fans is that, despite Cengiz's plea and despite the evidence provided by Amnesty International, they don't actually have any say in the transaction anyway.

Unlike in Germany, where the 50+1 rule stipulates that a club's members retain a controlling stake in their club, thus preventing majority takeovers by external investors, Newcastle United belongs entirely to Ashley who is free to sell it to whoever he wants.

"We feel powerless," Thomas, a Newcastle supporter from "Wor Flags" (local slang for "our flags"), an independent fan group that creates displays and choreographies at St. James' Park, told DW last year, around the time of the initial takeover attempt. "In England, the fans don't have any say in their football clubs. Clubs are simply passed around to whoever has the most money."

"Club owners used to be factory owners from down the road who might have had a more vested interest in the local area," adds group member Chris. "Now, they come from all over the globe. Football has been taken so far away from the people."

For James Montague, an author who has written several books on football club ownership and fan culture, the situation described by Thomas and Chris is the "natural progression when the links between clubs and their fans are so completely eroded."

"In Germany, you have a system where the fans have a say," he tells DW. "But in England, fans have been treated like customers for so long that they're now completely excluded from the process. They are powerless."

Fußball 50+1 Protest | VfB Stuttgart -  FC Bayern München
"Non-negotiable! 50+1 stays!" Stuttgart supporters are among the German fans who are fiercely protective of the 50+1 ruleImage: picture-alliance/augenklick/firo Sportphoto/S. El-Saqqa

German football and the 50+1 rule

For many German football fans, particularly those active supporters who regularly attend matches, the Saudi takeover of Newcastle is precisely why attempts to modify or abolish the 50+1 rule are met with such vehement opposition. 

"The 50+1 rule is the final regulation preventing more and more money from flowing into the game," says Manuel Gaber, a spokesperson for the "50+1 stays!" campaign and supporter of Bundesliga club SC Freiburg.

"I like being a fan of my club because I'm a member; I'm part of the club. I don't think I'd like to be part of a club if I knew that it actually belonged to a rich individual, a company or a country with geopolitical objectives."

Even with the 50+1 rule in place, German clubs are not completely immune but, for many supporters, being loyal and critical need not be mutually exclusive traits.

Bayern Munich fans, for example, are regularly critical of their clubs' sponsorship dealings with Qatar. One supporter is currently in court contesting an internal club ban which he claims has been issued due to his vocal criticism, including his involvement in a fan-led event in January 2020 titled "Qatar, Human Rights and FC Bayern: hands out, mouths shut?". Bayern claim the ban was for displaying a prohibited banner at a reserve game.

"There is a space within German football for fans to have their say, which is a result of collective memory developed over the years," explains Montague, referring to the historic difference between club ownership in Germany and England. While in England, clubs were originally set up as limited companies and have always belonged to individual owners, German clubs were members' associations, and largely remain so to this day.

"That's over 100 years of a different political and cultural system of running the game. It's a mindset which is drilled into German football, and that has a massive impact on how fans view their own power within the game."

Read more: Opinion: 50+1 is the root of all that is good about German football

'We are United' banner held up in stadium
Fan group 'Wor Flags' insist Newcastle remains their club, regardless of who owns itImage: picture-alliance/ZUMAPRESS/S. Bellis

'This is still our club, our city, our people'

In Newcastle, members of 'Wor Flags' have been involved in protests against Mike Ashley for years. Before the pandemic, 15 of them had given up their season tickets and were boycotting games, refusing to create any more displays. But their influence has always been limited.

"We would love to have a 50+1-style model in England," insists Chris. "As a fan group, we look across at the continent for inspiration for our displays and we would love to be able to have a say in a club and influence how the club interacts with the community. That has to be the aim for every football fan."

In April 2021, the Newcastle United Supporters Trust launched the "1892 Pledge," a campaign named after the year of the club's foundation to raise around £3m to purchase a 1% stake in the club, valued at approximately £300m. As of October 2021, the total amount pledged currently stands at £162,543.

"But football in England has become a spectator business," laments Chris. "Television has taken a lot of our influence away. Most of the money comes from the fan sat on the couch, not the fan in the stadium, leaving us powerless. And not only in Newcastle."

Thomas and Chris don't see the point in protesting against the Saudi takeover, even if they could. Instead, they want to focus on things they can control and things that are important to them.

"If we felt that the Saudis were abusing women's rights, we would consider a display featuring a female fan in a black and white top," they suggest.

"That wouldn't necessarily be an attack on Saudi Arabia, but it would be an expression of what we stand for in Newcastle. We might not own it, but this is still our club, our city, our people, and supporters who are female, Muslim, Jewish, gay, whatever, are all welcome at our Newcastle United."

Paris Saint-Germain and Manchester City are also owned by Gulf states
Paris Saint-Germain and Manchester City are also owned by Gulf states

Modern football: a geopolitical battleground

In the greater scheme of things, the takeover sees Newcastle United become the second Premier League club to be bought by a Gulf State after Manchester City, who since 2008 have been owned by Sheikh Mansour bin Zayed Al Nahyan of the Abu Dhabi United Group (ADUG), an investment company for the Abu Dhabi royal family, which has also been accused of laundering its image via involvement in sport.

In France, Paris Saint-Germain have been owned by Qatari Sports Investments (QSi), a subsidiary of the sovereign wealth fund of the state of Qatar, also home to broadcaster BeIN Sports, since 2011.

The 50+1 rule currently prevents such takeovers of German clubs, although energy drink brand Red Bull found a way around it when it established RB Leipzig in 2009.

Despite criticism from some club owners who believe the rule unfairly restricts free-market competition laws, Germany's independent federal competition regulator, the Bundeskartellamt, recently stated that the rule was "unproblematic." However,  it also said the "uniform application and enforcement of the rule in its current version is not ensured", referring to clubs with exceptions namely Bayer Leverkusen, Wolfsburg and Hoffenheim. 

A German Football League (DFL) statement on the issue is expected by the end of October 2021.