Rafiel Rajinthrakumar | Nov 5th, 2021
Sports teams around the world rely on loyal investors to help fund their clubs, while investors reap the benefits of the club’s financial successes. Usually, relationships between investors and club executives are positive, as both parties work together to satisfy one another’s needs. However, things are not always smooth sailing. Leagues around the world are relentlessly fighting to become the best, willing to take massive risks in order to maximize their value. Despite many sports leagues around the world implementing strict rules for investors and clubs to follow, some investors have taken shady shortcuts in order to bend their way around these regulations. The recent takeover of Newcastle United -- a relatively popular club in the English Premier League -- by a Saudi Arabian-led consortium agreement has raised eyebrows across the world for a number of reasons, primarily because of their suspicious motives.
The wealthy consortium is composed of 3 entities, “the Saudi Arabian Public Investment Fund (PIF), venture capital and private equity company PCP Capital Partners, and RB Sports and Media” (1). However, it is the PIF’s involvement in the ownership of Newcastle which has caused the most controversy over the past couple months. In layman’s terms, the PIF is “essentially a state savings account for the Saudi Arabian government. It makes the bulk of its money from oil, which Saudi Arabia has sold all over the world” (2). They are not well known to the average person, but have invested millions of dollars into popular companies like Disney, Uber, and Meta, formerly known as Facebook. Although money from oil is their primary source of income, they are working to expand their investment portfolio in order to prepare for the future and find alternative streams of cash. At the helm of the PIF sits Mohammed bin Salman (more commonly known as MBS), the Crown Prince of Saudi Arabia (3). He was convinced by Amanada Staveley, the executive of PCP Capital Partners, to reignite plans to takeover Newcastle United, which he agreed to with an abundance of support from the PIF (4).
Their initial plans to takeover were stunted by a legal disagreement between Saudi Arabia and Qatar regarding a pirated streaming company by the name of beoutQ (5). Qatar accused Saudi Arabia of banning access to beIN Sports, an official broadcasting company based in Qatar and a Premier League rights holder. Instead, the pirated streaming company, beoutQ, was utilized in Saudi Arabia and the government did nothing to prevent the company from illegally reproducing their material. After complaints from the CEO of beIN Sports, Saudi Arabia eventually lifted this ban and has promised to take “responsibility to help fight broadcasting piracy” (6). With these broadcasting issues sorted out, MBS and Staveley were free to move forward in their business expedition. Newcastle fans across the world were ecstatic to hear the news of their new owners, who “are worth an eye-watering £700bn” (7). The prospects of signing the best players in the world and qualifying for major European competitions blew the fans off their seats, but little did they know the new owners had a couple rough patches in their resume which had been severely overlooked.
As mentioned previously, the PIF’s involvement in the takeover of Newcastle United stirred up the most controversy. Not because of the amount of money they have or the broadcasting dispute in Qatar, but because of their volatile chairman, MBS. Human rights groups in England, particularly Amnesty International, have been adamant that this deal “represented a clear attempt by the Saudi authorities to sportswash their appalling human rights record with the glamour of top-flight football” (8). Sports washing is a common practice amongst countries in the Middle East who aim to use the glamour and joy of sports to “brainwash” the rest of the world into forgetting about the human rights issues in their countries and focusing on sports. Qatar and the UAE, who own PSG and Manchester City respectively, are both perfect examples of this. Profit was never really their primary motive for buying these clubs; they wanted to cover up their disgraceful human rights record.
Saudi Arabia’s record, under the governance of MBS, includes routinely executing civilians and children, jailing women for pushing back against misogynistic laws, and most notably, “the brutal murder and dismemberement of journalist Jamal Khashoggi inside the Saudi consulate in Istanbul in October 2018. There has since been evidence to suggest that MBS himself approved an operation to have Khashoggi ‘captured or killed’” (9). Khashoggi was a journalist critical of the Saudi government and wrote for the Washington Post. His murder served as a reminder that MBS was not the almighty saviour people in Saudi Arabia painted him out to be (10). He made attempts to show the community he was fighting for change by giving women access to sports stadiums and allowing them to drive, but at the end of the day, his microscopic efforts towards change mean nothing; he is still a corrupt individual who’s rise to political and economical power was fueled by abusive, manipulative, authoritarian schemes. So why would the Premier League allow such a malicious individual to invest so much money into one of their teams? Well, the answer is in the question itself. Along with “legally binding assurances” that the club would not be run by the Saudi government, the League clearly could not resist the opportunity to have a seemingly endless flow of cash into their system.
In regards to the human rights issues, this is where things become a little interesting. Although Khashoggi’s murder has been directly linked to MBS and his associates, MBS has not been convicted for this murder (11). Therefore, without a conviction against him, the consortium was able to pass the Premier League’s Owner and Directors test because even with an abundance of evidence and accusations, ownership can only be denied on the basis of a conviction (12). Amnesty International has strongly urged the Premier League to alter the requirements of their Owners and Directors test, but their cries for change have come a little too late. Newcastle United has the potential to become one of the great European powerhouses in the world of soccer over the next couple seasons, but their Saudi-led ownership will always represent the frightening power of money to cover up anything; including murder.
Comments