The Saudi Arabia PIF financed takeover of Newcastle United eventually happened on 7 October 2021.
You may recall it…
The deal attracted a ‘few’ headlines, everybody having an opinion on it.
One opinion / headline though was entirely missing from outsiders (journalists, pundits, rival fans) lecturing Newcastle United supporters on the takeover.
What they were totally missing was that the Saudi Arabia PIF had landed an absolute bargain.
I thought that absolutely at the time, £305m paid to Mike Ashley and 80% controlling stake for the Saudi Arabia PIF, which works out at £244m (80% of £305m).
Even if they have had to sort out some extra money to Ashley for whatever and / or take on potential liabilities such as cash that one day may need to be paid to HMRC, due to the ongoing civil action, you aren’t talking then surely much more than £300m from the Saudi Arabia PIF side of things. Then even if in reality it turned out they have funded the Amanda Staveley stake in the club (in return for her work helping the takeover happen) as well, you are still only bumping up the Saudi Arabia PIF contribution to nothing beyond £350m, in terms of buying Newcastle United.
Yes, you can point to the cash that they have already had to put into the club since taking over, especially when it came to having to help finance transfer business. However, when you consider that Bruno Guimaraes is clearly worth at least double what he cost Newcastle, Botman very similar, whilst I’m sure Isak will prove to be the same level as this pair, it is very progressive transfer business as all. Wood was always a short-term fix, whilst Pope must be worth at least three times the £10m he spent and likes of Burn, Trippier and Targett all proving quality signings as well.
Anyway, when you are looking to try and value something, see whether it was a good buy in retrospect, you need to look at the competition.
I was amazed at how many were seemingly battling to buy Chelsea AND how much they were apparently prepared to pay for the cockney club. The buying price for Abramovich’s shares reported as £2.5bn, then ‘In addition the new owners will commit £1.75bn in further investment for the benefit of the club.’
Yes Roman Abramovich has bought them a series of trophies these past near two decades and built the club to where it is now. However, they get 40,000 crowds and need a new stadium built, yes, Chelsea were / are worth a lot more money than Newcastle United in 2021 and 2022 BUT a couple of billion or more difference now???? I don’t think so.
Then you have Everton looking for a takeover, much of the media stating matter of fact that their valuation is around £500m+…
When you consider that another £500m is needed to pay for the new stadium, you are talking over £1bn for starters.
In contrast, the Saudi Arabia PIF bought a club with a stadium fit for purpose, in the best location of any Premier League stadium in the country, a stadium where the only problem is that apart from updating it superficially due to Ashley refusing to even clean it properly, is finding ways to expand the current 52,000 capacity.
I repeat, the Saudi Arabia PIF got an absolute bargain with (once club, one city) Newcastle United.
Now we come to the big ones, Liverpool and Manchester United.
Are those two clubs worth more than Newcastle United at this present moment? Yes.
Are those two clubs worth twenty times or more what Saudi Arabia PIF paid for Newcastle United? No.
Yet that is what is being talked about, both Liverpool and Manchester United up for sale now, after their owners failed with their Premier League power grab along with the rest of the self-appointed elite six, then same when they tried it on with their own controlled European Super League.
Liverpool are being talked about as potentially having a value of £6bn+, whilst Man Utd even as high as £8bn.
These figures twenty or twenty five times bigger than the price Saudi Arabia PIF paid for their initial Newcastle United purchase.
Chelsea increased in value by over a couple of a billion under Abramovich, Man City no doubt have increased in value even more than this past decade or more.
Absolutely no reason why Newcastle United can’t do similar, or even far beyond what has happened at Chelsea and Man City, Newcastle United with a far bigger natural fanbase than that pair.
Personally, I don’t think Liverpool or Man Utd will quite go for those kind of figures quoted above BUT I bet they do still go for absolutely massive amounts, giving FSG and the Glazers billions in profit.
This is a serious investment from the Saudi Arabia PIF and paying a few hundred million for a club of Newcastle United’s undoubted potential…it is a serious bargain they landed.
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