After over 5 months of negotiation, the proposed takeover of Premier League club Newcastle United by Saudi Arabian-backed consortium, Public Investment Fund, PCP Capital Partners, and Reuben Brother, has failed.
The group issued a statement on Thursday, July 30, to announce that they have withdrawn from the proposed takeover of the Premier League club citing the impact of the coronavirus pandemic and the prolonged process of the negotiation.
Recall that in January 2020, fans of Newcastle United were very excited when the news broke that a Saudi Arabian-backed consortium had placed a £300 million bid to take over the running of the club from the current owner Mike Ashley.
The fans have always been very critical about how Ashley has been handling the club in terms of investment in signing big players that will enable the club to compete with other bigger clubs not just in the Premier League but also in Europe.
Hence, they embraced the proposed takeover with the belief that once the Saudi Arabian-backed consortium spent the over £250 million they planned to spend in the first five years of the takeover, Newcastle United would stop fighting to avoid relegation but fight for a Champions League spot.
However, the deal which would have given the Saudi Arabian-backed consortium 80 percent control of the club, was forced to fail as it continued to drag on with different damaging allegations and controversies.
A statement from the Saudi Arabian-backed consortium read: “With a deep appreciation for the Newcastle community and the significance of its football club, we have come to the decision to withdraw our interest in acquiring Newcastle United Football Club.
“We do so with regret, as we were excited and fully committed to invest in the great city of Newcastle and believe we could have returned the club to the position of its history, tradition, and fans’ merit.
“Unfortunately, the prolonged process under the current circumstances coupled with global uncertainty has rendered the potential investment no longer commercially viable.
“To that end, we feel a responsibility to the fans to explain the lack of alternatives from an investment perspective.
“As an autonomous and purely commercial investor, our focus was on building long-term value for the club, its fans and the community as we remained committed to collaboration, practicality, and proactivity through a difficult period of global uncertainty and significant challenges for the fans and the club.
“Ultimately, during the unforeseeably prolonged process, the commercial agreement between the Investment Group and the club’s owners expired and our investment thesis could not be sustained, particularly with no clarity as to the circumstances under which the next season will start and the new norms that will arise for matches, training and other activities.”
Why Saudi Arabian-backed consortium proposed takeover of Newcastle United failed?
Though the Saudi Arabian-backed consortium had blamed the uncertainty caused by the coronavirus pandemic as one of the reasons they pulled out of their proposed takeover of Newcastle United, there are other unofficial reasons why the deal eventually failed.
Initially, when the news broke that Newcastle United would have a new owner before the beginning of the 2020-2021 season, it met a lot of goodwill, especially from the club’s fans.
Then suddenly, human rights campaigners and groups, such as Amnesty International alleged that the proposed takeover of the club was just propaganda. In fact, the takeover was described as “sport-washing” which would have been a tool in the hands of Saudi Arabia’s government to cover up its bad human rights records.
The media in the United Kingdom and some parts of the world began to dig out reasons why the Premier League should not allow the deal to scale through. It was at that period a World Trade Organisation report found “prominent Saudi nationals” promoting illegal broadcasts of football matches.
Then, Premier League chief executive Richard Masters told the media that the league was not working to any specific time frame regarding the takeover. The league also raised concerns about who would be in charge of the club when the takeover scales through – the government of Saudi Arabia or one of the companies that make up the consortium?
The more the negotiations should be heading to the final phase, the more questions were raised about whether it was morally right for the Premier League to allow the deal to scale through amid the “negative image” of the Saudi Arabia’s government.
But Newcastle United Fans are not happy that they had to lose such an opportunity that would have made their club to compete with other well-funded clubs in the league. After the Saudi Arabian-backed consortium announced that they have pulled out of the deal, Newcastle United Fans Club issued a statement blaming the Premier League and the media for the failure of the takeover.
The statement read: “The supporters of Newcastle United have been treated with contempt by large parts of the football media and the Premier League during this failed takeover process.
“It’s been made clear that we are the least important people in a decision which affects us the most. We need answers.”