Exclusive: PIF's message to Newcastle United fans and the explosive story behind the collapse of the takeover

The country’s Public Investment Fund (PIF) has hundreds billions of pounds invested at home and abroad, and the proposed £300million deal for Newcastle United, which it was 80% funding, was dwarfed by many other investments.

But it was a big deal in so many other ways for PIF – and, potentially, it was far bigger for the club and the city.

And the decision to walk away from the deal yesterday following the Premier League's failure to make a decision – or even give a timescale for a decision – wasn’t taken lightly.

The blame for the decision, in PIF’s view, lies with the Premier League, though a late attempt by owner Mike Ashley to renegotiate the £300million deal following the expiry of the sale and purchase agreement (SPA) late last month “wasn’t helpful”, according to one well-placed source close to the discussions.

PIF, along with financier Amanda Staveley and investors David and Simon Reuben, had pledged to invest a further £250million in the club over a five-year period.

They were “passionate” about the project, which also involved further investment in the city.

Selling point

The support shown by Newcastle fans for the deal was “incredible”, according to a senior PIF source. This was acknowledged in a statement issued by the group following its withdrawal, while Staveley said she was “heartbroken”.

“This was a very passionate thing for us – it wasn’t a vanity play,” said the source.

“We didn’t want to buy a football club for the sake of buying a football club. This is an investment firm focused on sustainable returns, and bringing something back to the people of Saudi Arabia for any international investment it makes. All of that fit with Newcastle.

“We had the £300million price and an additional £250million had in our business plan to invest in the club over the next five years and an additional amount to invest in the community.

“That was what was the selling point for us, the passion of the fans, the community, the fact that we could help build that community and rebuild the club. That was, for us, the biggest selling point.

“We saw the passion and support of the fans throughout this process. That’s why we wanted to make sure we thanked them in the statement. The support was incredible.

“This wasn’t just an investment to us. We do lots of investments which are much bigger than this. This was a very passionate thing that we had close to our hearts. We felt a connection with the Newcastle community and we could bring tens of millions of new fans to Newcastle from Saudi Arabia and really help the relationship between the two countries.

“This wasn’t just a football deal. There was so much more to do. It wasn’t easy to walk away.”

Assurances

The Premier League, it’s claimed, indicated at the start of the process that they didn’t foresee any issues with the takeover, which was agreed with Ashley, and submitted for approval, in April.

A timescale for approval of a month was mooted at the time.

The deal, however, soon ran into opposition, notably from Qatari broadcaster beIN Sports, which has the Premier League rights for the Middle East North Africa region.

There were also representations from Amnesty International and Hatice Cengiz, the fiancee of murdered journalist Jamal Khashoggi, over Saudi Arabia’s human rights record.

However, it was the piracy issue that would go on to dominate the headlines as the Premier League, which had insisted on confidentiality at the start of the process, conducted its owners’ and directors’ test.

Saudi Arabia is involved in an ongoing geopolitical dispute with Qatar, and beIN Sports, which had its licence to broadcast in the kingdom permanently cancelled earlier this month, lobbied hard against the deal.

There was also last month’s World Trade Organisation report into allegations of piracy in the kingdom. The report, which is being appealed by Saudi Arabia, drew a link between “individuals or entities” under the jurisdiction of the state and beoutQ, a pirate TV station which has illegally broadcast Premier League games.

PIF offered what they thought was a “solution” to the issue – a Saudi consortium was put together to buy the Premier League rights for the kingdom – and they believe that it had been all but resolved.

They also answered questions on the country’s human rights record.

Sticking point

The original SPA expired on June 26, and that day, according to PIF sources, the Premier League – whose chief executive Richard Masters promised a resolution “shortly” a month ago – requested more information on the independence of PIF from the Saudi government.

This was the final sticking point for the Premier League, according to PIF sources.

PIF, an autonomous, commercial investment fund, was able to give the Premier League assurances from the “highest levels” of government that there would be no state interference in the running of the club, which was to have Yasir al-Rumayyan, PIF’s governor, as its chairman.

Ashley, meanwhile, asked for different commercial terms following the expiry of the SPA, according to a high-placed PIF source.

This move “didn’t help the situation”, according to the source, though approval remained the biggest issue. PIF weren’t prepared to change the terms of the agreement, but there was still a belief that things with Ashley could have been satisfactorily resolved.

And so it went on. The deal wasn’t rejected, but there was no end date – or a timescale for a decision. PIF claim that they answered every question and supplied an “unprecedented” amount of information to the Premier League.

They believe they had done everything they could – and still couldn’t get an answer.

PIF were also frustrated at a number of leaks, most recently on Premier League concerns over who would have the “ultimate responsibility” at the club, during what was supposed to be a confidential process.

Sources maintain all questions on leadership were answered.

A ‘sad day’

PIF felt they had to walk away – it was a “sad day”, according to one source – from the deal given that there was seemingly no end in sight to what had proved to be a very “difficult” process. Sources stress that the move isn’t a negotiating tactic amid hopes on Tyneside that the deal can somehow be resurrected. Only time will tell.

The Premier League, meanwhile, have made no comment, though United managing director Lee Charnley today insisted that Ashley was “100% committed to this deal”.

Now the focus is on American Henry Mauriss, said to be in talks over a £350million sale.

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