Pretty soon – in a matter of “weeks” rather than months – Newcastle fans are set to get a visible sign of the Saudi Public Investment Fund’s continued commitment to the club.
Confirmation of a further tranche of investment by the club’s majority owners – earmarked to purchase the site of where a new state-of-the-art training ground will be built near the city’s airport – will land in the near future on Companies House, The i Paper understands.
While the impact of leaks and the pace of legal work prevent anyone from giving an absolutely cast-iron timeline, the funding has the green light. With doubts swirling about the club’s direction and Saudi commitment to investing in sport itself, confirmation of the first major infrastructure project of the PIF era cannot come a minute too soon.
The training ground – which may not open its doors until close to the 2030 date that chief executive David Hopkinson has optimistically set for Newcastle to be regularly competing for the Premier League title – will be funded by a combination of PIF investment and capital raised through the club taking on debt.
That last point feels important. While the hope of Newcastle fans (and fear of their rivals) was that the club would be viewed as a trophy asset by a fund with deep pockets, that was never, ever intended to be the reality.
“PIF is acting like an institutional investor because it is an institutional investor,” was how one source put it. No private equity fund in the world would write a blank cheque to fund a stadium or training ground and PIF is no different. Which is why Newcastle, unlike teetering LIV Golf, does not face the prospect of being cut adrift anytime soon.
Are PIF still committed to Newcastle?
Several sources contacted by The i Paper were unequivocal. Despite the speculation around LIV there is “no change” in the long-term plan for Newcastle.
Rumours that they are readying a sale of their stake in the club – which swirled around football circles last week – have been categorically denied by sources, who suspect they are partly the work of opportunistic investors or third parties who would be keen to test the water for a possible Newcastle takeover.
Last week PIF announced a new strategy which split the fund’s investment into three “pots”. The first, “Vision 2030”, is for domestic projects. The second, “financial”, is for investments in equity projects and stocks and shares.
Newcastle sits in the third pot: “strategic”. PIF sources have always said that while the investment is relatively small by the fund’s standards it is important because it is so public-facing. One source went further, referring to it as a PIF “crown jewel” because it gives them a presence in the globally respected Premier League.
Is Newcastle viewed as a good investment by Saudi Arabia?
Quite apart from the steep improvement on the pitch – with the exception of this season – it is also viewed by PIF as a successful investment off the field. Including the sale price of £305m, PIF have invested around £800m in Newcastle so far. According to the fund’s own internal metric the valuation of the club has significantly outstripped that investment.
One source familiar with football acquisitions believes Newcastle are now worth more than £1bn based on the price paid for similar clubs. Contrast that with LIV Golf, which is projected to require further hefty injections of cash to compete with the established golf tours, and you can see why sources describe the two investments as “chalk and cheese”.
Newcastle is still growing. The club have this week advertised for a slew of academy recruitment jobs across the Balkans, Italy and Spain. Key new off-the-field roles, in strategy, data and recruitment, are to be confirmed soon.
For many fans, though, there is a sense of drift about Newcastle. PIF have no intention of challenging the financial rules that have hamstrung the club’s ambitions, which has caused disquiet.
On the ground Eddie Howe’s position has been called into question after a mediocre season began to tailspin while at least one big sale – quite possibly Anthony Gordon, with Bayern Munich interested – is necessary. There is frustration that the issue of St James’ Park expansion is not resolved a year on from a decision being supposedly imminent, although The i Paper has been told that the intention is a call will have been made by the end of the year.
A high-level visit by senior PIF figures next week, then, feels symbolically important.
How do PIF view this season – and Eddie Howe’s future?
Next week’s annual “off-site” meeting at Matfen Hall in Northumberland is important and comes with the club seemingly at a crossroads. The team are 14th and set to miss out on their pre-season target of European qualification, which will have a significant impact on their summer business. Frustration is building on the terraces.
With Yasir Al-Rumayyan expected to jet into the North East to attend it is being viewed as a chance for the chairman to “grill” Howe on this season’s failings. The reality will be different.
The i Paper understands that Al-Rumayyan enjoys a warm relationship with Howe and has regularly enthused about his track record at Newcastle.
It’s been stressed that no one gets a “free pass” at St James’ Park and there is clearly frustration at the way the Premier League campaign has unfolded but as it stands the plan is to continue with Howe next season.
He has been part of all the club’s preparations for the coming campaign and recruitment planning – which has stepped up this week – has been tailored to bringing in players who would operate well in his system and favoured style.
But PIF are, in the words of one source who has worked with them previously, “obsessed with the numbers”. They will want to be across all the data and information and will expect things to change. Insiders suggest lessons of last summer’s fiasco of a transfer window have been learned and work has gone into ensuring there is improvement. The era of signings like Anthony Elanga and Yoane Wissa seems over.
The smart money remains on Howe being in charge – but of a very different looking outfit come August.
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