Timing is everything — good and bad

Hey there, time traveller!
This article was published 17/04/2020 (2317 days ago), so information in it may no longer be current.

For Saudi Arabia’s sovereign wealth fund, the timing couldn’t be better. COVID-19 has already devastated the global economy — and will continue to do so for months, perhaps years — and the industries infected by the contagion are desperate for cash, for investment. World football is no exception. Inactive since mid-March, most clubs in the sport’s biggest leagues are feeling queasy.

Newcastle United, however, are not among them. In fact, things haven’t looked as promising at St. James’ Park in a generation. When the Premier League restarts, the Magpies could be in better financial shape than the majority of their peers; quite suddenly, thanks in part to the coronavirus, among the richest clubs in the world.

Over the next few weeks, Premier League administrators will be reviewing the public investment fund (PIF) of Saudi Arabia’s bid to purchase a majority stake in Newcastle. Assuming current owner Mike Ashley doesn’t pull out of the deal at the last moment, they’ll approve it. There’s a “fit and proper person’s test” they supposedly apply to the process, but despite Saudi Arabia’s abysmal human rights record the sale will go ahead. The test is legally tenuous in the first place — and, besides, one of their member entities stands to skyrocket in value at a time when market trends are projecting in the opposite direction.

In purely footballing terms, the transaction is a win-win.

Newcastle fans will finally be rid of Ashley, managing director Lee Charnley and an erratically hands-on operational approach that makes Dallas Cowboys’ owner Jerry Jones seem like a silent partner of his NFL team. Presumably, the new regime will more resemble that of Manchester City, who are owned by the investment arm of the United Arab Emirates’ royal family and run by director of football Txiki Begiristain.

On the pitch, a club that last won a major trophy in 1955 could more resemble the mid-’90s sides of Alan Shearer, Les Ferdinand, Faustino Asprilla and David Ginola than the current crop of Joelinton, Miguel Almiron, Jonjo Shelvey and the Longstaff brothers. The Tyneside faithful who have so loudly and admirably backed such dreadful teams down the years could finally have something to really cheer about.

As a piece of business, the sale makes sense as well. Ashley took control of Newcastle in 2007 through a series of transactions worth £134.4 million and could now reap more than £175 million in profit from his initial investment. His sporting goods company, like many retailers, is being pummelled by the economic contraction caused by COVID-19 and the additional cash will help him withstand further blows.

The PIF, meanwhile, is acquiring a legacy brand for what, to them, is merely pocket change. With assets valued at more than US$320 billion, they’ll barely notice when the cheque clears. Additionally, the purchase will help diversify Saudi Arabia’s investment portfolio — part of its Vision 2030 scheme designed, in part, to make it less dependent on oil. Already, the fund has taken advantage of pandemic-affected prices to buy stake in Royal Dutch Shell, major energy companies in Italy, France and Spain, and Carnival Cruise Line.

Even more important for the PIF and its chairman, Saudi Arabia Crown Prince Mohammed bin Salman, is the opportunity to launder, or “sport-wash,” the kingdom’s human rights abuses. Human Rights Watch notes that Saudi Arabia continues to jail and execute political dissidents, exploit the migrant workers that make up 80 per cent of its workforce, oppress women, girls and sexual minorities, and commit “violations of international humanitarian law” in Yemen.

On Wednesday, Amnesty International condemned the PIF’s takeover of Newcastle as a “PR tool” intended to glamourize Saudi Arabia’s international reputation.

Nevertheless, barring a mass demonstration of Newcastle supporters — unlikely, what with social distancing and stay-at-home measures in place because of COVID-19 — or a pang of conscience from Ashley, which is even more doubtful, there will be no stopping the deal from going ahead. And with a public already fatigued by the pandemic news cycle, and Brexit before that, this piece of business will escape serious examination. Indeed, Amnesty’s UK head of campaigns Felix Jakens has warned that “with the world in crisis there’s a risk this deal could go ahead without the degree of scrutiny it should receive.”

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The public investment fund couldn’t have wished for conditions more conducive than these. Bin Salman, for all his meticulous oversight of Saudi Arabia’s global image, couldn’t have planned it better. Ashley will be laughing all the way to the bank.

In other words, aside from the actual football, the timing couldn’t be worse.

jerradpeters@gmail.com

Twitter @JerradPeters