Saudi-Billionaire Investor Group Said in Talks to Buy Newcastle United for $445Mln


Saudi Arabia’s sovereign-wealth fund is in talks to buy U.K. Premier League soccer team Newcastle United F.C. for about £340 million ($445 million), according to people familiar with the discussions.

The buyer is the Public Investment Fund, Crown Prince Mohammed bin Salman’s key investment tool, together with a group of investors organized by British financier Amanda Staveley, the people said. A final deal could be days or weeks away, the people said. The tentative deal could still break down.

The seller is British businessman Mike Ashley, who bought the team in 2007 for 134 million pounds, and turned into one of the least popular owners in English soccer.

The acquisition would be a major coup for Saudi Arabia as it focuses on sports and entertainment as part of Prince Mohammed’s economic reform plans for the kingdom.

It could also mean a big infusion of capital into Newcastle akin to Abu Dhabi’s 2008 acquisition of Manchester City. Since then the city-state, capital of the United Arab Emirates, has spent over a billion pounds to amass playing talent, renovate the team’s facilities, and turn City into an era-defining team in the English Premier League.

The Newcastle acquisition talks are being led up by Ms. Staveley, a financier who bet big on building relationships in the U.A.E. in the late 2000s. She led Sheikh Mansour bin Zayed al Nahyan’s multibillion pound bailout of Barclays bank in 2008. And she previously was involved in the deal that led to Sheikh Mansour’s takeover of Manchester City.

British billionaires David and Simon Reuben are part of the consortium of investors, according to people familiar with the matter. If the deal is pulled off, there are plans to potentially have Jamie Reuben, 33, David’s son, play an executive role at Newcastle, the people said.

Ms. Staveley’s company will buy 10% of Newcastle under the proposed deal, the people familiar with the discussions said. It isn’t clear where the money will come from but Ms. Staveley has previously been linked to a bid for Newcastle from another Abu Dhabi prince, Khaled bin Zayed al Nahyan.

Newcastle has historically been one of the best attended clubs in the Premier League, drawing more than 50,000 a game last season despite mediocre results. But the club’s devoted fans, famous for removing their shirts in the northeast English weather, have had little to cheer during Mr. Ashley’s tenure. Over the past decade, the team has twice been demoted to English soccer’s second tier. Supporters laid the blame squarely on Mr. Ashley, accusing him of stinginess in the player transfer market and treating the fan base with general contempt. Chants of “Get out of our club” have become routine at Newcastle’s home stadium of St. James’ Park.

The club is currently in the bottom half of the Premier League standings with few prospects for major improvement this season.

Saudi Arabia’s aspirations to own a major soccer team have been brewing for years. Over the past few years, say people familiar with the matter, Saudi officials have discussed buying other Premier League teams. But Chelsea and Manchester United were each deemed too expensive, these people say.

So until now, its presence in the European game has amounted only to a few personal moves by Saudi investors, as opposed to the state-backed efforts of its neighbors Abu Dhabi and Qatar. Those investors include a member of the Saudi royal family, Prince Abdullah Bin Mosaad bin Abdulaziz al Saud, who acquired 50% of Sheffield United in 2013, and one of Prince Mohammed’s top aides, the Chairman of Saudi’s General Entertainment Authority Turki al-Sheikh, who bought Almeria in Spain’s second tier last summer.

Some of PIF’s direct investments in companies overseas, such as Uber Technologies Inc., have suffered paper losses. Its $45 billion commitment to SoftBank Group Corp. ’s Vision Fund also looks precarious after a series of investments, including WeWork, Slack Technologies Inc. and Uber have fallen in value since the fund first bought in. That mixed performance has caused the fund’s officials to consider buying a soccer club with a less-established global brand and building it into a more valuable asset, a person familiar with the fund’s thinking said. PIF says it is a long-term investor and aims to use the assets it owns to help diversify the Saudi economy from its dependence on oil.

Under Prince Mohammed, who rules Saudi Arabia day-to-day on behalf of his father King Salman, sports and entertainment has become a major focus after decades of restraint under previous kings who maintained an austere domestic environment.

In the past three months alone, the Kingdom has hosted a heavyweight prize fight, a $3 million tennis tournament, international motor racing, and a string of soccer matches featuring Lionel Messi and Cristiano Ronaldo.

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