Newcastle United fans woke up a bit happier than usual last week.
After more than a decade of dealing with one of the most disastrous ownerships in English football, billionaire Mike Ashley has sold the club to a consortium led by Saudi Arabia’s US$500 billion sovereign wealth fund.
Mike Ashley officially transferred the club’s shares at a value of just over US$400 million, or more than 2x what he paid for the club back in 2007 — not including all the indirect sponsorship value he hemorrhaged for his company Sports Direct.
Here’s how the club’s cap table sits today:
The Saudi consortium owns 80 percent of the club
Property developers Simon & David Reuben own 10percent
PCP Capital Partners own the remaining 10percent
The craziest part? Saudi Arabia’s sovereign wealth fund currently has roughly US$500 billion in assets, meaning Newcastle is now considered the world’s richest club.
Important note: The Saudi kingdom has reportedly signed a legally binding “separation agreement” with the Premier League which guarantees that they will not control the 128-year-old soccer club.
The exact details of that agreement aren’t clear at the moment.
Admittedly, I don’t follow Newcastle United religiously. Still, the feeling I got from interacting with fans via Twitter was that this is much more about getting rid of Mike Ashley than bringing in Saudi Arabia.
“This is my hometown club (I’m a former long-standing season ticket holder). For now, I’m just delighted Mike Ashley has left the building — he robbed the club and city of its soul. Onwards.” mentioned one fan on Twitter.
We could talk about how Ashley didn’t invest any money into the infrastructure & facilities of the club, his inability to adequately sell players, and his obsession with profit over winning, but ultimately, this graphic tells you everything you need to know.
Shoutout to Sam Ranson for pointing it out and Swiss Ramble for putting it
Of course, the realisation that Newcastle was going from one of the most frugal owners in English football history to the wealthiest ownership group in English football history certainly drummed up some excitement also.
The Saudi Public Investment Fund, which Crown Prince Mohammed bin Salman leads, currently has about US$500 billion in assets under management.
Not only does that make Newcastle the richest club in the world, but they now have more capital at their disposable than all the other Premier League teams . . . combined.
This graphic is a bit blurry, and whoever created it spelled “Newcastle” incorrectly, so bear with me, but the data looks correct, and it’s quite the shocking image.
Still, there is nuance to this. Even if all US$500 billion of the Saudi Public Investment Fund’s assets were available to Newcastle, it’s not like they could go out
and spend any amount of money they imagined. Financial Fair Play (FFP) regulations still apply, although, to be fair, early reports suggest that Mike Ashley left the club in a strong enough financial position that Newcastle will be able to spend roughly US$250 million without breaching FFP rules.
Regardless, I couldn’t end this email without dropping this amazing meme. If you still haven’t watched Squid Games on Netflix yet, you definitely should. —Huddle Up.