Breaking news- Newcastle United confirms major announcement to do deal with major Saudi company after £83m-a-year investment
Newcastle United has once again found itself in the spotlight with rumors of a potential partnership involving a company closely tied to their owners, the Saudi Public Investment Fund (PIF). This connection has fueled much speculation since the club’s high-profile takeover in October 2021. At the time, many observers believed Newcastle would strike a series of major commercial deals with PIF-owned companies, a move that would significantly boost the club’s revenue and profile. This expectation contributed to the introduction of the Premier League’s regulations on associated party transactions (APT), which were specifically designed to prevent undue financial influence from club owners. These rules, currently being challenged in arbitration courts by Manchester City, were implemented to ensure that clubs couldn’t inflate their revenue unfairly by signing deals with companies linked to their owners.
Despite these restrictions, Newcastle has successfully secured a number of deals with PIF-affiliated businesses, including Sela and Noon, which have injected millions into the club’s coffers. However, the flood of deals that many anticipated after the takeover has yet to fully materialize. This could be due to the cautious approach taken by the club, or the limitations imposed by the APT regulations. Still, there are signs that this situation could change in the near future. With Manchester City’s ongoing legal battle against the APT rules, there is a possibility that the regulatory landscape could shift. Should City’s challenge prove successful—a result that has not yet been confirmed, despite some speculation—it could open the door for PIF to leverage its enormous £700 billion portfolio to pump even more money into Newcastle. Such an outcome could allow the club to bypass the constraints of the Profit and Sustainability Rules (PSR), the Premier League’s version of financial fair play, giving Newcastle an even greater financial advantage.
One of the companies that has been closely linked with Newcastle in recent months is Riyadh Air, a new airline launched in Saudi Arabia and backed by PIF. As Newcastle continues to explore avenues to boost their revenue streams, commercial partnerships like this are becoming increasingly vital. The club is under pressure to generate additional income, particularly with the need to comply with PSR. Under these rules, Premier League clubs are required to operate within strict financial limits, and Newcastle’s current financial situation means they must carefully manage their spending. Unlike broadcast or matchday income, which typically increases gradually, commercial revenue can provide a much-needed financial windfall if the right sponsorship deals are secured.
Newcastle has already forged a partnership with Saudia, the flag carrier airline of Saudi Arabia, but recent reports suggest that Riyadh Air could be poised to take over this role. According to Arabian Gulf Business Insight, talks between Newcastle and Riyadh Air are ongoing, and a deal could be on the horizon. If finalized, this partnership could represent a significant commercial boost for Newcastle, potentially replacing the current deal with Saudia. The broader context of Gulf states competing for football sponsorships only adds to the intrigue surrounding this potential deal. For example, Qatar Airways recently signed a massive £83 million-a-year agreement with UEFA to sponsor the Champions League, demonstrating the fierce competition among Gulf airlines for top-tier football partnerships.
Riyadh Air isn’t the only Gulf-based airline involved in football sponsorships. Chelsea has reportedly held discussions with the airline, which already sponsors Atlético Madrid. Meanwhile, Emirates, the national airline of the UAE, continues to maintain long-standing relationships with major football clubs such as Arsenal and Real Madrid. This competition among Gulf airlines underscores the growing importance of football as a platform for these companies to raise their global profile, and Newcastle is clearly a club that could benefit from this trend.
Beyond the potential Riyadh Air deal, Newcastle’s overall financial situation is a key concern. The club recently found itself in a frantic scramble to comply with PSR for the three-year assessment window ending on June 30, 2024. Like many other Premier League clubs, Newcastle had to engage in some creative financial maneuvering, including quasi-swap deals and the sale of academy prospects, to ensure they remained within the permissible financial loss limit. Under current Premier League rules, clubs are allowed to lose no more than £105 million over a rolling three-year period. Newcastle managed to stay within this threshold, but only just, and they face similar financial pressures in the current season.
Looking ahead, the financial landscape for Premier League clubs is set to become even more challenging. Starting next season, the league is expected to implement a new financial system modeled after UEFA’s regulations, which will place even stricter limits on spending. Specifically, the new rules will cap spending on wages, transfers, and agent fees at 85% of a club’s revenue. For Newcastle, this would likely mean one of two things: either the club will need to significantly increase its revenue through new sponsorship deals and other commercial activities, or they will need to reduce their investment in the playing squad to ensure compliance with the new rules.
This upcoming change underscores the importance of securing lucrative sponsorship deals like the one potentially on the table with Riyadh Air. Such a partnership could provide Newcastle with the financial flexibility needed to remain competitive in the Premier League while adhering to the stricter financial regulations. The club has ambitious goals, both on and off the pitch, and increasing its commercial revenue will be essential to achieving them. Whether it’s through partnerships with PIF-owned companies or other strategic sponsorships, Newcastle will need to continue exploring ways to boost their income in order to thrive under the evolving financial landscape of English football.
In conclusion, the ongoing speculation surrounding Newcastle’s potential deal with Riyadh Air highlights the club’s efforts to navigate the complex world of football finance. With Manchester City’s legal challenge against APT rules and the impending introduction of stricter financial regulations, Newcastle’s future success will depend on their ability to secure smart commercial partnerships and generate the revenue needed to stay competitive while adhering to financial fair play rules. As the competition for football sponsorships intensifies, Newcastle will be looking to capitalize on their ownership’s connections and the growing interest from Gulf states in the global football market.