Newcastle are not PIF’s top priority – this is where things stand three years after Saudi takeover

As the euphoria of the Saudi Arabia-backed takeover wears off, Newcastle are left questioning where the project is headed next

It was three years ago, this week, that Newcastle United were dubbed the “richest club in the world” following a takeover by Saudi Arabia’s Public Investment Fund (PIF).
After 18 months of protracted takeover talks during those turgid days of Covid lockdowns, Newcastle finally had owners who wanted to compete at the top of European football. The same power unleashed in the early 90s, when Sir John Hall and Kevin Keegan briefly threatened to win the Premier League, pulsated through the city once more.
There has been some rapid growth; a magic carpet ride for supporters who had been drained of dreams under former owner Mike Ashley. But there are now genuine questions about the direction of travel. It was a transformative moment, but has it been a truly revolutionary one?
As the euphoria of the takeover wears off, Newcastle – widely criticised outside their sphere of interest because of Saudi Arabia’s human rights record and facing valid accusations of sportswashing – are left with questions of where the project is headed now.
First, we must reflect on what has been achieved. Inheriting a team that was second from bottom of the Premier League, winless and rudderless, Newcastle appointed Eddie Howe as manager in November 2021, spent £450 million gross (£350 million net) on new players and qualified for the Champions League a year after avoiding relegation.
They also reached a major cup final, the Carabao Cup in 2023, for the first time in 20 years and a second top seven finish followed last season, despite a crippling injury list.
Newcastle is unrecognisable from the Ashley era. But in a world of profit and sustainability rules (PSR), which Newcastle came dangerously close to breaching back in June, can they make the next leap?
There is a schism between reality and expectation. Newcastle may have the richest owners in football, but that wealth is largely irrelevant when they were handcuffed by PSR and the new rules were introduced immediately after the takeover in 2021, which severely limit sponsorship deals connected to owners.
Newcastle have two sponsorship deals with Saudi companies, front of shirt sponsors Sela and sleeve sponsors Noon. They were limited by the fair market value rules to £25 million and £6.5 million, respectively, per year. Newcastle have made slow progress with other sponsorship deals, including naming rights for the stadium and the training ground, but there is a suspicion they were waiting to hear the outcome of Manchester City’s battle with the Premier League before proceeding.
The rules prevent them benefiting from lucrative sponsorship deals connected to certain Saudi firms. Their introduction was a source of immense frustration on Tyneside, but a relief to everyone else.
Newcastle are perceived as a threat, with dubious ownership. It remains to be seen what impact, if any, Manchester City’s battle over associated-party transaction laws has on Newcastle sponsorship deals moving forward.
Commercial growth has been impressive up to this point, but it has slowed and for some, stagnated. Newcastle are still a long way behind the income streams of the Big Six clubs.
According to the latest figures, Newcastle are seventh in the revenue table (they were 11th when the takeover was ratified), which is precisely where they finished in the Premier League, and they are still a long way behind Arsenal in sixth. Newcastle’s revenue has grown 40 per cent year on year to £250.3 million according to their latest accounts. Arsenal’s was £465 million in 2022-23. For further context, Manchester United’s was £661.8 million.
Newcastle’s owners have plenty of money, but have not been able to spend it lavishly. In the short term, Newcastle have probably reached their ceiling. They are a top eight club, but not yet a top four one, on the pitch or off it. Expectations need to be realigned accordingly.
Saudi Arabia appears to have more pressing concerns in the world of sport and the money spent on LIV golf, boxing, hosting the World Cup in 2034 and even their domestic Saudi Pro League has dwarfed their investment in Newcastle.
They are more headline-grabbing ventures too. Newcastle have got Saudi Arabia a seat at the Premier League table, the world’s most watched and exciting league, and they are happy enough with that.
PIF have not lost interest in Newcastle, it is just not their number one priority. It never was. It has always been viewed as a long-term investment; a long-term project, but one of many for chairman Yasir Al-Rumayyan to oversee.
“The chairman said we want to be the number one club in the country,” a source told Telegraph Sport. “What does that mean in reality?
“Well, the message has always been consistent. It is about achieving long-term, sustainable success. To challenge for trophies every year, to try and qualify for the Champions League every year.
“That ambition remains the same and that is what we are working towards. This was always seen as a long-term investment for PIF and nothing has changed in that respect.”
It was telling, however, that when Newcastle were in dire straits with PSR in the summer, no relief came from Saudi Arabia.
Although Kieran Trippier and Callum Wilson were linked with moves to Saudi clubs, no bids were made. Allan Saint-Maximin did join Al-Ahli in the summer of 2023 for around £20 million, but other English clubs have benefited far more from Saudi riches than Newcastle.
As one source put it: “If they were not going to help Newcastle this summer, they aren’t going to help them at all.”
Transferring players from Newcastle to Saudi Arabia was the one loophole the Premier League had not closed. It would have been the easy option to meet PSR rules and would have moved on two ageing England internationals.
But there are a lot of competing interests in Saudi Arabia and the league does not want to be seen as a retirement home for big name stars anymore. The reputation of the league was valued more than helping Newcastle balance their books. Internally, it was a sobering realisation.
This is, in many ways, the barometer for where PIF wants to take Newcastle in the medium-term. Newcastle need a new stadium, not just to modernise their flagship football facility, but to increase revenue streams. At 52,000, St James’ Park in its current form is not big enough to match the demand for tickets and neither does it bring in enough money on a matchday to compete with the Big Six.
A feasibility study has been carried out and an announcement was “imminent” according to chief executive Darren Eales back in July. Last week, an update did arrive, which amounted to “no decision has been made yet and all options are still being looked at”. It felt like a can being kicked down the road.
Another announcement will be made in “early 2025” according to Brad Miller, who was brought in by PIF as chief operating officer to oversee the stadium project. We could be a long way from seeing spades in the ground. In the meantime, both Manchester United and Leeds United have revealed plans to build impressive new arenas of their own.
They have the plans in place to expand and rebuild St James’ Park, but they also have an alternative option, which is to build a new stadium on nearby Leazes Park, a Victorian era greenspace, which is part of a legally protected conservation area. It would be a hugely controversial scheme, at risk of all sorts of planning red tape and the potential for legal challenges, if the club decides to pursue it.
At the moment, PIF has also not agreed to pay for anything. They are still assessing how to bring in the best possible economic return on a £1 billion investment. A capacity of between 65,000 and 70,000 is mooted.
Telegraph Sport was told last week that it will be a new stadium regardless of location, which will be part of a massive redevelopment of the surrounding area. The idea is to build a modern, multi-purpose venue that will be more than just a football stadium.
It is, according to Miller, “a once in a generation” project. Another source said it was imperative they took their time to ensure they can “deliver what they promise in a suitable time-frame that works for everyone”.
Newcastle City Council said in a statement to Telegraph Sport: “While there have been no formal talks between the club and the council our door remains open as it would with any developer. When the club wants to sit down with us, we will listen and advise.”
Given the council own the land St James’ Park is built on, Newcastle will need to extend the 70-year leasehold they currently have – and are also responsible for what happens to Leazes Park.
Shortly after the takeover, the club also said they would build a new state-of-the-art training ground. There are no updates. Newcastle spent around £10 million to modernise their existing Benton base and it looks like they will have to make do with this for a while longer.
Newcastle did not sign a single player to improve their first team in the summer. They did not do so in January either. This is largely due to PSR constraints, but every club who finished above them and directly below them last season, strengthened.
Even if they buy a player in January in the region of £50 million – which is new sporting director Paul Mitchell’s intention if the right one is available – Telegraph Sport understands that they will then need to sell someone in the summer in order to comply.
Mitchell has started an overhaul of the club’s recruitment procedures and scouting network. Newcastle will look for more value in the market, with the intention of signing more up-and-coming players from a global pool, with the potential for higher resale value. It will be more in line with Brighton, rather than Manchester City, Arsenal or Manchester United.
The academy will also be expected to produce more players who can be developed and sold. There has been a significant increase in spending on teenage players from across the country, under head of academy Steve Harper. New coaches have also been headhunted, such as Diarmuid O’Carroll from St Mirren, who is one of four new faces brought in to improve the youth structure. But like everything with player development, it will take time until Newcastle see the fruits of this labour.
In the meantime, there are long-term doubts about the futures of their star names, such as Bruno Guimaraes, Anthony Gordon and Alexander Isak. All were sold the ambition of Newcastle being a regular Champions League club. They are not playing in Europe this season.
All were, to varying degrees, unsettled in the summer when PSR concerns meant they were all, in theory, up for sale.
The concern is that this Newcastle team will eventually be broken up. One of the crown jewels will be sold. How damaging that will be will depend entirely on how the money is reinvested. The bottom line is, Newcastle are not operating as an elite club yet, as they do not have an elite club’s budget to spend on wages or transfer fees.
There was a lot of talk of wider investment in the region when the takeover happened, but very little has materialised since.
Talk of PIF buying the city’s struggling rugby team, Newcastle Falcons, has been rubbished by sources close to the sovereign wealth fund as well as the leadership group at Kingston Park. The Falcons hierarchy have talked about the potential to establish a rugby academy in Saudi Arabia but that is it.
According to a well-placed source, PIF currently has “no plans to invest” in rugby union in this country. Indeed, there is some frustration that people claiming to speak for PIF, who do not, have fuelled this story in the media.
Attempts were made by the Newcastle Eagles, the city’s basketball team, to secure investment from Saudi Arabia, but their overtures were ignored. As one source put it, if PIF were going to invest in basketball they would buy a team in America’s NBA – not England.
The sums needed to turn the Falcons and Eagles into major forces in their respective sports would be minuscule compared to the sums needed to build a new stadium at St James’ Park, for example. Turning Newcastle into a trophy winning, thriving sporting city, along with their ownership of the football club, would seem like an easy win for Saudi Arabia and PIF, but there does not seem to be any appetite. When pushed on this subject, Telegraph Sport was told “nobody ever said the plan was to create a Barcelona-type sporting club with multiple clubs across different sports”.
It was also pointed out that investment in these sports would almost certainly be a loss-making venture akin to a charitable donation. Newcastle United currently pay to use the Falcons’ Kingston Park stadium for the club’s women’s team to play their home games.
It was added that the ownership group, led by co-investors the Reuben family, already makes considerable donations to the city’s Foodbank. Newcastle United Foundation, the club’s charitable arm, has also had significant investment and is capable of doing far more in the community as a result. The conversation ended there.
As for the city council, there have been tentative steps made to forge stronger business ties with the Kingdom, but that is all. They have also pointed to investments made by the owners.
A spokesperson said: “More recently club and council officials in city-wide delegations have attended international trade fairs which have successfully laid the groundwork for any potential development in the future.
“The club’s commitment to the social fabric of the city is also growing through its commitment to the commercialisation of the Newcastle United women’s team, its promotion of equality of opportunity through the Newcastle United Foundation and support for struggling families through Newcastle Foodbank and other charitable giving.
“The STACK fanzone at St James is a multi-million-pound investment that has created job opportunities for 140 local people and adds to the vibrancy of the city centre especially on match days.”
The promise of a new stadium and a massive redevelopment of the surrounding area is tantalising for the city as a whole, but until concrete plans are announced, we are being contained in a holding pattern.