SportsPremier League clubs wage legal battle against Saudi ownership of Newcastle

Premier League clubs wage legal battle against Saudi ownership of Newcastle

Alarmed by a foreseeable injection of liquidity that subverts the principles of financial fair play, 18 of the 20 clubs that make up the Premier League voted on Monday in favor of putting up a barrier that prevents the Public Investment Fund of Saudi Arabia from investing without limit in the Newcastle United. Meeting with extraordinary character, all the delegates except for Newcastle and Manchester City, another of the so-called state clubs, voted in favor of introducing a change in the internal regulations of the Premier, so that the commitments cannot be altered. previously acquired sponsorship. This, in theory, would prevent Newcastle’s new owners from terminating advertising contracts to replace them with more profitable ones under Saudi Arabian state-owned companies.

The members that make up the Premier seek to defend the rules of free competition, threatened when clubs whose property is state-owned appear in the systems. In anticipation that the sovereign fund that Newcastle bought on October 8 will flood the club with money by signing off-market sponsorship contracts with state-owned companies in Saudi Arabia, the 18 clubs that have made a common front have started a process of revision of the constituent norms of the Premier.

Only the City abstained from voting. According to the newspaper The Guardian, the Manchester club remained on the sidelines because it alleged that the process that the majority was trying to promote was illegal. The City, like Newcastle now, is owned by public investors, in this case the Abu Dhabi United Group, linked to the Government of the emirate. The City is currently being investigated by the Premier for having signed agreements that are believed to involve “related parties”, one of the typifications of fraud when a company signs contracts with itself at off-market prices. One of the cases that attracted the Premier’s scrutiny was the sponsorship of the City by Etihad Airways, Abu Dhabi’s flag carrier.

Newcastle envoys, led by Lee Charnley, denounced the proposed rule change as “anti-competitive.” The remaining 19 clubs called Monday’s meeting two weeks ago, after learning that Newcastle’s purchase agreement by the Saudi fund had been formalized against all assumptions that it contradicted the Premier’s regulation.

Thanks to Boris Johnson

The Newcastle purchase transaction was closed for € 360 million. Paid the Public Investment Fund of Saudi Arabia. Chaired by the Saudi Crown Prince, Mohammed bin Salman, the fund has a governor, Yasir Al-Rumayyan, who has now moved to lead Newcastle.

Mike Ashley, an entrepreneur in the sportswear sector, until then the owner of the club, was very resentful by the fans due to their lack of interest in investing in footballers. The surprise in the rest of the English clubs was complete. The bodies of the Premier in charge of auditing applicants to acquire clubs blocked the process for 18 months due to the well-founded suspicion that, if acquired by the Saudis, Newcastle would become controlled by an autocratic state responsible for actions considered criminal in the UK. This legal detail prevented approval through the ordinary route, until the British Government intervened to force the agreement. The Executive has denied it, but according to the Financial times, the crown prince asked Boris Johnson to unlock the approval process, with manifest results.

Saudi Arabia is one of the UK’s top buyers of arms, among other imports that amounted to € 8 billion in 2020.

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