Premier League clubs block Saudi sponsorship deals with Newcastle United
Premier League clubs have moved to stop Saudi Arabia flooding Newcastle United with big-money sponsorship deals that would allow them to spend freely on transfers.
Eighteen of the 20 top-flight teams approved a block on related-party transactions, in which a company that shares the same owner as a club pays it money via a commercial deal.
Related-party transactions are controversial because it is difficult to determine the fair value of a deal. Some teams have been accused of using them to artificially inflate their income, and therefore their spending capacity.
Newcastle were the only club to oppose the new rule at an emergency meeting held on Monday, while Manchester City abstained.
The rule is only a temporary measure while clubs draw up permanent regulations around the issue. Newcastle and City are said to believe the rules are unenforceable.
Saudi Arabia’s Public Investment Fund acquired a controlling stake in Newcastle earlier this month in a £300m deal.
The PIF manages assets worth $400bn and it is anticipated that the club’s new owners will spend heavily on new players to lift them from 19th in the Premier League and, ultimately, challenge for major honours.
Amanda Staveley, the British financier who brokered the takeover and now holds a 10 per cent shareholding in Newcastle, said: “Premier League football is the best in the world, and Newcastle United is the best team in the world.
“We want to see it get those trophies. At the top of the Premier League, In Europe, but to get trophies means patience, investment, time.
“Newcastle United deserves to be top of the Premier League and we want to get there. It’ll take time but we’ll get there.”
But league rules limit how much money teams can lose, meaning they must also demonstrate revenue growth in order to make a raft of major signings.
Manchester City’s biggest sponsorship deal is with Etihad Airways, which like the club is owned by Abu Dhabi.