PIF have their fingers in plenty of pies when it comes to the sporting world, and we wanted to take a closer look at their investments in the golfing world compared to their efforts with Newcastle United.
The Saudi Arabia Public Investment Fund made waves in 2021 with the multi-million pound purchase of Newcastle United, and it’s safe to say that has been a successful venture so far.
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PIF may be right up there as one of the richest ownership groups of any football club in the world, but they have had to do things a little differently at Newcastle due to PSR restrictions.
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We spoke exclusively to finance expert Adam Williams about the motivation behind PIF’s ownership of Newcastle United and how they have been forced to operate differently here in the Premier League.
He said: “In most other sports they are involved in, the Saudis have been pretty much unrestrained in how much money they have been able to pump in. In the Premier League, that’s not the case, so it has had to be a slow burn. They weren’t naive about that; they always knew that they weren’t going to be able to do a Man City with Newcastle overnight.
“Personally, I think Newcastle were something of a beachhead to get credibility in the sport ahead of their bid for the World Cup. They are now spending orders of magnitudes more on that than they have ever or will ever spend at Newcastle, even if the reports of them scaling down their ambitions with stadium designs and so on are accurate.”
It’s been a unique challenge for PIF at Newcastle in terms of their spending capabilities. Still, they have invested a lot of money on Tyneside, but it pales in comparison to their efforts towards the 2034 World Cup.
On that, Williams added: “They have invested over £800m since the takeover, but they will probably spend at least 200 times that on the World Cup. And on a global scale, that project is far more important to them than Newcastle.”
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PIF’s LIV Golf investment compared to Newcastle United regime
At the start of this year, golf star Rory McIlroy praised PIF’s ownership of Newcastle while comparing it to the more fractured and turbulent project they’ve built with the LIV Golf league. So, what does Williams make of that side of things?
He told us: “In golf, they have gone in very aggressively but, as I understand it, they are now moving towards more of a unified structure with the PGA Tour and so on. I think that’s emblematic of their wider strategy in sport these days: if you can’t beat them, join them.
“At the end of the day, they expect a return on their investment in one form or another, be that financial or in terms of soft power, and that usually requires getting in with the established order.
“But it all comes back to money at the end of the day and the Saudi government’s masterplan to diversify their economy away from fossil fuels. PIF’s portfolio in sports and sports-adjacent industries now has a blend of what you might call cultural assets like Newcastle and ones that are virtually guaranteed cash machines like EA Sports.”
Getting into the nitty-gritty of facts and figures, Williams predicts PIF will take a financial hit on Newcastle United at some point, but it largely won’t matter.
Explaining this, he added: “When all is said and done, because of the investment needed to compete at the very top, PIF will probably make a modest loss on Newcastle, even if they sell them for £1-2bn further down the line. But they can afford to do that because it was a statement takeover that has opened doors for them in areas where they will generate a much bigger financial return.
“With golf, it’s a slightly different kind of investment. They have invested over $5bn and they will expect a direct financial return on that one day, even though they are losing money hand over fist as things stand.”
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