Sunday, August 7, 2022

Why the Saudis are so cautious at Newcastle while throwing stupid money at LIV Golf

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The Public Investment Fund aims to make Newcastle United a “major force” but will approach that differently than its overnight golf revolution, source Mark Douglas says

The PIF funds Newcastle United and LIV Golf to exercise soft power for Saudi Arabia through sport. Both have been a magnet for criticism of sportswear, but that’s where the similarities seem to end.

In Bedminster, New Jersey, and Benton, Newcastle, they are waiting to see how the Public Investment Fund’s money will shape the next phase of Saudi Arabia’s sporting revolution.

The contrast between swanky LIV Golf, which has spared no expense and is paying rivals up to $100m to ditch the PGA Tour for the new company, and Newcastle United’s much more measured approach could not be sharper.

There are no party planes taking players to and from Tyneside. Instead – and to the surprise of many agents circling St James’ Park hoping for a payday for them and their clients when ownership changed – Newcastle intend to pave a more sustained, steady path back into Premier League relevance .

Their £100million spend in January was the biggest in the division but summer deals have been more modest with three arrivals: Nick Pope, who converted Matty Targett’s loan move, and an impressive move for Lille’s promising defender Sven Botman. The recruitment theme was clear: enlisting the best emerging talent to accompany them on their journey, rather than those with stellar resumes.

While PIF funds are central to both, Newcastle United don’t expect to follow the path of staggering signing offers to established stars that has made LIV Golf such a divisive force in golf.

“The most important reason is financial fair play. We are not aware of the way the owners of Manchester City and Chelsea have spent money on players,” said a Newcastle source I.

“Even if we wanted to, those times are over. Even Chelsea can’t do it again.

The second reason? “Everyone misunderstands PIF. It is a process-oriented investment fund. You analyze everything. The key is in the investment part – they have and will continue to spend on Newcastle but it has to be the right things that make the club grow.

“The idea that they have all these funds and they are going to use them to sign Lionel Messi is just not right.

“They are smart enough to know there are no quick fixes at Newcastle. They could throw £300m at the club but if the fundamentals aren’t in place then there’s no guarantee of success.”

Inside the club talk about having to justify significant expenses to the majority shareholders. Some things may take some time to unsubscribe as PIF partners want to do a review.

In practice, this means Newcastle’s recruitment philosophy is driven by the signing of players like Bruno Guimaeres and Botman – players who have been sold a project that sees the Champions League as their next stop.

PIF’s investment in golf is different. “Well, first of all, there is no such thing as financial fair play,” notes a source.

The theory goes that LIV Golf is a disruptive force trying to turn the establishment on its head and will require quick investments to establish it before it can stand on its own as a part of the lucrative world of golf for years to come .

“You start from scratch. It’s a revolution in sport,” said a source.

Newcastle, meanwhile, were clear from the start of the summer that they would be more measured.

In some ways it was a frustrating transfer window as the magpies were given astronomical prices for the forwards they had been inquiring about. £60m for Moussa Diaby was deemed too expensive and the same has been said of Everton striker Dominic Calvert-Lewin.

In part, the club are still paying for the decline that began under Mike Ashley when Newcastle fell behind their rivals on and off the pitch.

Ashley inherited a club that rivaled Tottenham in terms of advertising and matchday revenue, but as Ashley balked at the expense of the competition there was little or no investment in the club and they now have strictly lower levels in terms of the Premier League Income in the middle.

Newcastle signed several long-term sponsorship deals from Ashley in recent years, including a shirt tie with Castore. They have negotiated an early release from the FUN88 sponsorship deal and part of new CEO Darren Eales’ job is to find a quality sponsor.

“There would never be a quick fix for this. It will take time,” says a senior source.

There was plenty of initial interest and one market adviser believes it is inevitable that a large increase in the £6.5m payout will be paid to FUN88. However, all sponsorship deals must be scrutinized by an independent Premier League panel, who will assess whether they represent fair market value.

The Magpies took out a loan with HSBC this week, secured against this season’s TV money and ticket sales. The money will be used – according to a Newcastle source – to “fund future growth”.

In practice, this means that it will help the club in the transfer market and in other projects that make the club grow, such as. B. hiring new employees.

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