BREAKING NEWS- PIF ready to give Newcastle United spending spree green light ahead of crunch meeting
Newcastle United and their Premier League counterparts are gearing up to vote on significant rule changes that could unlock new financial avenues for the club, particularly in the area of sponsorship. These adjustments, set to be discussed in a high-profile meeting on November 22 at London’s Nobu Hotel, will focus on sponsorship agreements linked to entities closely tied to club owners. Newcastle’s CEO Darren Eales is expected to represent the club at this crucial meeting, which may reshape financial regulations that have been restrictive since Newcastle’s 2021 takeover by the Public Investment Fund (PIF) of Saudi Arabia. At the time, these regulations on Associated Party Transactions (APT) were implemented, limiting the ability of clubs to secure sponsorship deals with companies connected to their ownership groups. The rule change generated frustration among Newcastle’s ownership, with co-owner Amanda Staveley vocalizing her dissatisfaction at the abrupt restriction right after PIF’s acquisition of the club.
These rules have been a topic of contention, particularly following Manchester City’s legal battle against the Premier League after sponsorship deals with companies like Etihad and First Abu Dhabi Bank were blocked. Man City ultimately scored a legal victory, challenging the validity of these rules, which has now set the stage for potential loosening of restrictions. If Newcastle and Man City succeed in influencing the rule changes, PIF is prepared to bolster Newcastle’s spending power in the transfer market. For now, Newcastle has been limited by Premier League Profitability and Sustainability Rules (PSR) and Financial Fair Play (FFP), but reports suggest PIF remains committed to backing the club’s ambitions as generously as possible.
Meanwhile, in Riyadh, PIF, which holds an 85% stake in Newcastle, is following the upcoming meeting’s developments with interest. The club’s financial backers, who oversee a substantial portfolio of high-profile companies, are anticipating that less restrictive APT rules could open up more lucrative sponsorship opportunities. These include potential partnerships with companies already aligned with PIF, such as Arab Bank and Riyadh Air. Under current rules, however, deals like these have been limited, curbing the sponsorship revenue Newcastle can generate. Notably, the existing partnership with the Saudi event management company Sela, a current sponsor, might have been even more profitable without the APT restrictions, as Manchester City previously argued in court.
In the proposed rule amendments, the Premier League has redefined what constitutes a fair market value for sponsorships, revising the language to focus on what a deal “could” be worth in the open market rather than what it “would” sell for between willing parties. Additionally, language specifying “normal conditions” has been removed, allowing greater flexibility for clubs in negotiating sponsorship values. The league has circulated a detailed 14-page document to Newcastle and other Premier League clubs outlining these proposed changes. If approved, the amendments may enable Newcastle to attract higher-value sponsorships, helping them align with PSR regulations and expand their spending capacity.
Under the PSR framework, whatever Newcastle earns in commercial revenue, they can effectively reinvest in their squad. Newcastle has Manchester City on their side in this matter, with City advocating for the full removal of APT restrictions, arguing that they are legally unsound. Following City’s legal win, several Premier League clubs—including Liverpool, Manchester United, Arsenal, West Ham, Brentford, Fulham, Bournemouth, and Wolves—sided with the league in favor of keeping the existing rules, as they feared City and Newcastle’s potential financial boost could disrupt competitive balance. Reflecting on the 2021 rule changes, Amanda Staveley expressed her frustration, noting the timing as unjust for a club struggling in the league at that time. Her remarks underscore the challenges Newcastle’s owners faced in growing the club commercially, with her husband, Mehrdad Ghodoussi, emphasizing in Amazon Prime’s recent documentary that building Newcastle into a powerhouse akin to Real Madrid or Barcelona requires more financial flexibility to attract significant sponsorships and, consequently, boost spending on the squad.
This anticipated vote on November 22 has the potential to not only reshape Newcastle’s financial trajectory but also signal a shift in the financial landscape of the Premier League itself, especially for clubs with wealthy ownerships eager to leverage commercial partnerships for greater on-pitch success.
