Newcastle United owners PIF release official statement as £276m Saudi deal confirmed…

Newcastle United’s owners, the Public Investment Fund of Saudi Arabia, have issued an official statement confirming the £276 million sale of one of their Saudi Pro League clubs.

The Public Investment Fund has divested its majority stake in Al Hilal for £276 million.

Less than a year after completing the £305 million acquisition of Newcastle, PIF secured a 75% stake in Al Ahli, Al Ittihad, Al Nassr, and Al Hilal, with the remaining 25% held by a non-profit organization.

PIF will maintain a 5% stake in Al Hilal, having sold the other 70% to Kingdom Holding Company.

Newcastle United’s owners, PIF, have sold Al Hilal.

“The sale is in line with PIF’s strategy to optimize returns and reinvest capital within the domestic economy,” a statement from PIF noted. “This approach supports PIF’s broader initiatives to foster development and diversification in Saudi Arabia. PIF is creating opportunities to make a significant impact in the Saudi sports sector and achieve positive, long-term outcomes.

“Since July 2023, PIF has been the principal shareholder of Al-Hilal Club Company, as part of the Saudi Sports Clubs investments and privatization initiative, which has accelerated the club’s advancement and enhanced the sports sector’s contribution to Saudi GDP.

“PIF has spearheaded the transformation of Al-Hilal Club Company in collaboration with the club’s executive team, resulting in notable enhancements in governance, operational efficiency, and infrastructure.

“These initiatives have led to increased commercial returns and substantial value growth, bolstered by sponsorships, merchandise sales, and matchday income. As a remaining shareholder, PIF will continue to support the growth trajectory of Al-Hilal Club Company.

The acquisition strengthens KHC’s position as a leader in recognizing high-value opportunities and generating long-term benefits for shareholders and the national economy. It also demonstrates the company’s strategy to diversify its investments in high-growth sectors that offer substantial economic and social value.

“KHC will assist Al-Hilal Club Company in concentrating on improving its commercial performance, broadening its international partnerships, and continuing to develop top-tier sports infrastructure.”

HRH Prince Alwaleed Bin Talal Bin Abdulaziz Al Saud, Chairman of Kingdom Holding Company, stated: “Al-Hilal represents a national emblem and a source of pride for the Saudi populace. This acquisition reflects our strong belief in the unifying power of sports and its role as a catalyst for national progress.

Yazeed A. Al-Humied, Deputy Governor and Head of MENA Investments at PIF, remarked: “PIF has been instrumental in advancing the transformation of Saudi Arabia’s sports sector and enhancing its appeal to investors while delivering enduring benefits at all levels, from players and fans to local communities.

“PIF has established ambitious objectives for the clubs, empowering them to achieve commercial and professional success and attain long-term financial sustainability. Today’s announcement is in line with PIF’s strategy to optimize returns and reinvest capital within the domestic economy.”

UEFA regulations prevent Newcastle United from engaging in transactions with clubs linked to PIF.

PIF’s retention of a minor stake in Al Hilal likely means that Newcastle will remain unable to benefit from transactions with those Saudi clubs.

“It doesn’t prevent us from conducting business. What it signifies is that if we generate a profit, it won’t be counted,” Newcastle’s chief financial officer Simon Capper recently disclosed.

“We might sell a player valued at one pound for £10 million and realize a profit of £9.999 million in the Premier League, but that profit is zero in UEFA. We simply do not register a profit.

The fact that other clubs are engaging in profitable dealings with Saudi clubs causes us some frustration. Our rivals are able to transfer players to Saudi clubs for substantial profits, which they can then use for their compliance assessments.