Newcastle United: Premier League clubs block potential Saudi-sponsorship deals

It is understood clubs held an emergency meeting to impose a freeze on any of them agreeing to commercial arrangements with businesses their owners are associated with

Rob Harris
Tuesday 19 October 2021 08:52
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<p>Newcastle are under new ownership after a £305m takeover </p>

Newcastle are under new ownership after a £305m takeover

Premier League clubs have moved to prevent Newcastle United immediately striking lucrative sponsorship deals with companies linked to their new Saudi ownership.

It is understood clubs held an emergency meeting to impose a freeze on any of them agreeing to commercial arrangements with businesses their owners are associated with.

Newcastle were joined by Manchester City in resisting the move to prohibit clubs agreeing to related-party transactions.

But it passed with 18 votes in favor as Newcastle opposed and City abstained after they questioned the legality of the ban.

Since being bought by Abu Dhabi's Sheikh Mansour in 2008, City has amassed sponsorships from companies linked to the emirate with Etihad Airways having the naming rights to the stadium and appearing on team jerseys.

City have always insisted they are paying fair market value rather than inflated fees for sponsorship to provide revenue to allow the club to comply with financial regulations.

Premier League rivals are worried Newcastle will use friendly sponsorship deals with related parties to help it comply with financial fair play rules that are in place to prevent rich clubs from spending unchecked. Under league rules, clubs are allowed to make losses of £105million over a rolling three-year period.

Newcastle became the Premier League's second club to fall under state ownership when it was bought by Saudi Arabia's sovereign wealth fund two weeks ago.

The Public Investment Fund provided the league with legally binding guarantees that the kingdom does not own the club, while being unable to say publicly how that fits with the company board being headed by the Saudi crown prince and mostly featuring government ministers.

The vote by clubs on Monday prevents Newcastle immediately bringing in sponsorship linked to PIF while a league working group works on new longer-term regulations.

It was not immediately clear whether the Premier League would deem any company funded by the Saudi state as being associated to PIF.

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