Sports

Premier League teams ban Newcastle-Saudi sponsorship deals

Saudi takeover of Newcastle continues to generate controversy

19.10.2021
Premier League teams ban Newcastle-Saudi sponsorship deals

LONDON

England’s Premier League clubs voted to temporarily block teams from signing sponsorship deals linked to owners in a move prompted by Saudi Arabia’s controversial takeover of Newcastle.

The ban means Newcastle cannot sign commercial deals with entities linked to Saudi Arabia’s Public Investment Fund (PIF), which owns 80% of the club after a £305 million ($418 million) takeover that is still generating controversy.

Eighteen of the Premier League’s 20 clubs voted in favor of the motion at an emergency meeting Monday with Newcastle voting against and Manchester City abstaining. Media reports said the abstention was due to legal advice the club received that the motion was illegal.

The ban will last one month with discussions ongoing as to a longer-term solution, including making sure future sponsorship deals are at a fair market value. Other Premier clubs fear Newcastle could gain an unfair advantage by signing preferential sponsorship deals and using the funds on players and their salaries.

The Premier League allowed PIF to takeover Newcastle after receiving “legally binding assurances” that the deal would not mean the Saudi Arabian state would be in control of the club.

But Saudi Crown Prince Mohammed bin Salman is the chair of the PIF, which has assets of £250 billion. Six Saudi ministers also sit on its board.

The controversial takeover was not only condemned by human rights groups such as Amnesty International, due to Saudi’s human rights record and the 2018 murder of journalist Jamal Khashoggi but also Premier League clubs who are worried about financial fair play and have also questioned how the deal passed the Premier League’s owners’ and directors’ test.

Premier League Financial Fair Play (FFP) rules mean clubs can only make maximum losses of £105 million ($144 million) over a rolling three-year period. Due to PIF backing, Newcastle is now one of the richest clubs in the world.

Examples of clubs signing sponsorship deals linked to an owner include Manchester City, whose stadium is sponsored by Etihad, Abu Dhabi’s airline. Since 2008, the club has been majority-owned by Sheikh Mansour bin Zayed al-Nahyan, a billionaire member of the Abu Dhabi ruling family.

Manchester City are still under investigation by the Premier League for breaching FFP rules and overspending, but last year overturned a two-year ban from the UEFA Champions League for overspending and breaching FFP rules after being cleared by the Court of Arbitration for Sport of the main charges around manipulation of sponsorship deals by disguising funding from its owner as sponsorship income.​​​​​​​

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