A game of two halves - how the Newcastle United takeover was finally approved


Mike Ashley, owner of sporting goods retailer Sports Direct, had owned Newcastle United Football Club for nearly a decade and a half. In April 2020, a group of investors including PCP Capital Partners, Reuben Brothers and the Public Investment Fund of Saudi Arabia (PIF) were involved in a takeover attempt of the club, which ultimately did not go through. Now, over 18 months later with a completed takeover announced it is worth reviewing the legal issues and lessons for those attempting to purchase Premier League clubs.

Failure of Initial Attempt

In April 2020, the aforementioned group of investors applied to the Premier League to undertake the Premier League's Owners' and Directors' Test. The test is applied to all Premier League owners and prospective owners. Outlined in Section F of the Premier League Handbook, the test lists the reasons which would prohibit an individual from being an owner or director of a club.. Section F.24 states that any person or persons who wishes to acquire a club must submit the necessary information for the League to undertake the test at least 10 working days before the proposed acquisition.

Applicable regulations

Regulation F.1.8 of the Premier League handbook states that if the person applying to become an owner or director "has engaged in conduct outside the United Kingdom that would constitute an offence" in the United Kingdom, the board can disqualify the individual from becoming an owner or director. The conduct would be one which indicates dishonesty, or one of the offences listed in Appendix 1 – Schedule of Offences in the Premier League handbook.  Under this regulation, the person does not actually need to have been convicted of an offence in another jurisdiction to be barred from becoming an owner or director. It is sufficient that the conduct was such that had it occurred in the UK it would have been an offence.

Separation of entities

The PIF is the sovereign wealth fund of the Kingdom of Saudi Arabia and its chairman is Saudi crown prince Mohammad bin Salman. There was disagreement between the takeover consortium and the Premier League over whether the PIF was separate from the Saudi state and whether the Saudi government or bin Salman themselves would need to be scrutinised under the Owner and Director tests. In a letter to Chi Onwurah, a Newcastle area MP, Premier League Chief Executive Richard Masters stated that "the consortium disagreed with the Premier League's determination that one entity would fall within the criteria" requiring submission to the Owner and Directors' test, which would indicate that the Premier League believed the PIF and the Saudi government were not separate.

Piracy issues

The proposed £300 million acquisition of the club was quickly protested by beIN, a Qatari sports broadcaster. beIN is one of the Premier League's biggest overseas broadcasters and had been banned in Saudi Arabia. They objected based on that fact that the PIF is the sovereign wealth fund of Saudi Arabia and is chaired by Mohammad bin Salman, the Saudi crown prince. beIN alleged that Saudi Arabia is responsible for beoutQ. beoutQ is an Arabic-language television network which broadcasts pirated content, including Premier League matches. While Saudi Arabia denies any connection, FIFA, UEFA and a number of prominent leagues have previously written to the Saudi government to put an end to the TV network, accusing beoutQ of "ongoing theft of our intellectual property" and urged the Saudi government to take action. beIN further stated that the "potential acquirer of Newcastle United [has] caused huge damage to your clubs and the Premier League’s commercial revenues".

In the end, the consortium pulled out of the deal so no decision regarding the full outcome of the test was publicly released.

Legal fallout

In September 2020, Newcastle United launched an arbitration case against the Premier League to challenge the league's verdict that the PIF and the Saudi Arabian government were not separate entities, a case which is currently scheduled to be heard in early 2022.

In addition, St James's Holding Limited (the parent company of Newcastle United) also launched a claim against the Premier League in the Competition Appeal Tribunal (St James Holdings Limited v The Football Association Premier League Limited).  

The Claim states that the Premier League holds a dominant position of the "relevant market" and the member clubs of the Premier League are in a position of collective dominance under Article 102 of the Treaty on the Functioning of the European Union and Chapter II of the Competition Act 1998. Their dominance includes having the power to choose which owners or prospective owners are included or excluded from the Premier League. Because of this, the defendant, according to the claim, has the responsibility to apply its rules in a "fair, objective and non-discriminatory" manner and not to use their powers for their own commercial interests.

St James's Holding Limited argued that the defendant blocked the takeover as it believed Saudi Arabia would be gaining control over the club and did not apply its rules in  "a fair, objective and non-discriminatory fashion and/or used its powers under the Rules for the improper purpose of promoting its own commercial interests and/or the interests of its business associates and/or certain of the PL member-clubs in a manner that was detrimental to competition and consumers."

An initial hearing for the Competition Appeals Tribunal occurred on September 29th, with key issues argued including whether St James Holdings suffered any actual financial loss because the takeover did not go through. In addition, counsel for the Premier League accused St James Holding of an "abuse of process" with the CAT claim going over similar information and arguments as NUFC's arbitration claim against the Premier League.

Takeover approved

According to a Premier League statement on October 7th 2021, the league has received "legally binding assurances" from the Kingdom of Saudi Arabia guaranteeing that the PIF and the Saudi government are separate and that the Saudi government will not control Newcastle United. This removed a very important hurdle which will now allow the deal to go through, as it means the entities which need to pass the Owners' and Directors' test are the PIF and other members of the consortium, and not the Saudi government itself. The league also announced that the Owners' and Directors' test has been completed.

In addition, it has been reported that Saudi Arabia will lift its ban on beIN sports, allowing it to air in the country. Saudi Arabia is also reported to have approached beIN sports to settle their ongoing arbitration, currently scheduled to commence in early 2022.

These two issues being resolved allowed the parties to overcome the biggest hurdles to completing the deal. The Premier League also stated that "the legal disputes concerned which entities would own and/or have the ability to control the club following the takeover" have now been settled to allow the purchase to go through.


This deal was the perfect storm to attract a high level of scrutiny, both from the parties involved and the general public. It combined a highly visible industry in football with the political interests at play when a foreign government is involved. Those looking at acquiring companies need to be acutely aware of the industry specific regulations that could impact them, and the enhanced due diligence that may apply to them when dealing with foreign officials and politically exposed persons.

featured image