In Bedminster in New Jersey and Benton in Newcastle they are waiting to see how the Public Investment Fund’s money will shape the next phase of Saudi Arabia’s sporting revolution.
The PIF is bankrolling Newcastle United and LIV Golf to exercise soft power for Saudi Arabia through sport. Both have been a magnet for criticism for sportswashing but that is where the similarities seem to end.
The contrast between the gaudy no-expense-spared LIV Golf, paying competitors up to $100m to ditch the PGA tour for the new entity, and Newcastle United’s much more measured approach couldn’t be sharper.
There are no party planes ferrying players to and from Tyneside. Instead – and to the surprise of many of the agents who were circling St James’ Park hoping for a payday for them and their clients when the ownership changed – Newcastle are intent on ploughing a more sustainable, steady route back into relevance in the Premier League.
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Their £100m spend in January was the biggest in the division, but summer business has been more modest with three incomings: Nick Pope, converting Matty Targett’s loan move and an impressive move for Lille’s highly-promising defender Sven Botman. The recruitment theme has been clear: signing the best emerging talent to join them on their journey rather than those with stellar CVs.
Despite PIF funds being central to both, Newcastle United aren’t expecting to follow the route of dizzying contract offers to established stars that has made LIV Golf such an divisive force in golf.
“The biggest reason is financial fair play. The way that Manchester City and Chelsea’s owners spent money on players is not available to us,” a Newcastle source told i.
“Even if we wanted to, those days are gone. Even Chelsea can’t do it again.”
The second reason? “Everyone misunderstands PIF. It’s an investment fund that is driven by process. They analyse everything. The clue is in the investment bit – they have spent and will continue to spend on Newcastle, but it has to be on the right things that will grow the club.
“The idea that they have all these funds and are going to use them to sign Lionel Messi just isn’t right.
“They’re smart enough to know there aren’t any quick fixes at Newcastle. You could throw £300m at the club but if the foundations aren’t in place, there’s no guarantee of success.”
Those inside the club talk about needing to justify substantial outgoings to the majority shareholders. Sign off can take time on some things because PIF partners are intent on scrutiny.
In practice that means Newcastle’s recruitment philosophy is driven by signing the likes of Bruno Guimaeres and Botman – players who have been sold a project that sees the Champions League as its next stop.
PIF’s investment in golf is different. “Well there is no Financial Fair Play, for a start,” one source notes.
The theory is that LIV Golf is a disruptive force trying to upend the establishment and requires quick investment to establish it before standing on its own two feet as part of the lucrative world of golf in the years to come.
“They’re starting it from scratch. It’s a revolution in the sport,” one source said.
Newcastle, meanwhile, were clear from the start of the summer they would be more measured.
In some ways it has been a frustrating transfer window, with the Magpies having been quoted astronomical prices for the forward players they have enquired about. £60m for Moussa Diaby was deemed too pricey, and the same was said about Dominic Calvert-Lewin, Everton’s England forward.
Partly the club are still paying for the decline that set in under Mike Ashley, when Newcastle fell behind their rivals on the pitch and off it.
Ashley inherited a club that matched Tottenham in terms of commercial and match day revenue but as Ashley baulked at the cost of competing, there was little or no investment in the club and they are now left with strictly lower mid-table revenue in Premier League terms.
Newcastle signed several long-term sponsorship deals in the final years of Ashley, including a kit tie-in with Castore. They have negotiated an early release from the FUN88 sponsorship deal and part of incoming CEO Darren Eales’ remit is to find a high value sponsor.
“It was never going to be a quick fix for that. It will take time,” a senior source says.
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Newcastle's striker problem, Everton's need for more quality and Frenkie de Jong latest20 July, 2022There has been plenty of initial interest and one market advisors feels it inevitable that a sharp increase in the £6.5m FUN88 paid. But any sponsorship deals must be vetted by an independent panel set up by the Premier League, who will judge whether they represent fair market value.
The Magpies took out a loan facility this week with HSBC which was secured against this season’s TV money and ticket sales. The money will be used – according to a Newcastle source – to help “fund future growth”.
In practice that means it will go towards helping the club in the transfer market and with other projects that will grow the club, like bringing in new staff.
Every other club in the Premier League does the same thing and taking on some modest debt – no figures have been given but some financial experts believe it could be around £70m – will enable them to continue to invest this summer. A striker and wide player are expected to arrive before the 1 September deadline.
The vast majority of fans are comfortable with Newcastle’s approach of putting high quality people in positions of influence and letting them get on with it. Season tickets sold out in record time, with even a double header of home friendlies this weekend set to attract a combined attendance of around 90,000. Something is stirring on Tyneside and there is a feeling that the team and set-up are only going to get stronger.
Huge infrastructure projects like a new state-of-the-art training ground are in the pipeline. Ambition on-the-field remains undimmed.
“The intention hasn’t changed one bit. They are there to turn Newcastle into a major force,” the source said. “But it won’t happen overnight.”
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