Newcastle United and Saudi Arabia: Football is only part of the problem

YOU CANNOT blame Newcastle United fans for being over-excited – the Mike Ashley era is over, the prospect of unprecedented success has arrived on Tyneside and the Toon may finally join the elite band of clubs that currently dominate Europe. The celebrations outside St. James’ Park were reminiscent of scenes from the Wizard of Oz – “Ding, dong, the wicked witch is dead”.

Ashley may have found more sympathy from the masses if he had been a “Geordie” –  he wasn’t “one of us” – and the era of “nowt” he presided over was the penalty for prudent management, a lack of adventure and a certain level of stability. On the pitch, that translated into two relegations (2009 and 2016), one European campaign (2013), not a single semi-final in domestic cup competitions and eight full-time managerial appointments as well as a number of caretakers and interims. 

Only two managers asted over 100 games and the best performing was the underrated and often ill-treated Chris Hughton with a win rate of 59.38%. They tried to recreate past glories in hiring Kevin Keegan 2.0 and were also seduced by big names in the form of Sam Allardyce, Steve McClaren and Rafa Benitez. No matter who was appointed, nobody got close to adding to Newcastle’s four league titles, six FA Cups and the 1969 Inter-Cities Fairs’ Cup.

Geography

If Newcastle happened to be in the south of England or a suburb of Manchester or Liverpool, the story might have been very different since the Magpies last polished some silverware. The club’s golden age was when coal was king and cities like Newcastle were the backbone of Britain’s industrial heritage, providing the sooty workforce that mined the seams or built ships. As the nation focused more and more on London and its satellites, provincial clubs like Newcastle became less prominent. The seriously wealthy backers that have changed the face of football focused on the game’s metropolitan elite. The possibility of a medium-sized provincial club winning the UEFA Champions League, such as Nottingham Forest did in 1979 and 1980, is now almost impossible.

Yet Newcastle is a club with a very distinct regional identity, as much part of the city as the Tyne river, the bridge that spans it, Newcastle Brown Ale and the very likeable accent that dominates the area. It is easy to form affection for Newcastle-Upon-Tyne and its people. Even though their football institution has been one of the most unsuccessful among top clubs, the fans remain committed and have never really written off the possibility of future success. Any potential investor looking at available clubs with critical mass and potential, will arrive at Newcastle pretty soon in the pecking order. It has happened to others with interesting pasts such as Wolves and Leeds and there are others who, one day, will come to the top of the list.

Hence, Saudi Arabia’s Public Investment Fund (PIF) saw Newcastle United as an asset they’d like to own, even though the days of the fabled “hotbed” were over years ago. Whenever a middle eastern entity with bulging pockets tries to broaden its footprint, there’s always an element of mistrust. Culturally, the marriage is always a little uncomfortable on many levels. But the Gulf states and specifically, Saudi Arabia, have strong economic ties with the United Kingdom. The Gulf states (Qatar, Saudi Arabia, UAE, Kuwait, Bahrain and Oman) are the fourth biggest trading partner after the US, European Union and China.

The big issue surrounding the takeover of Newcastle is Saudi Arabia’s approach to human rights. Mike Ashley was despised because of his business approach, notably zero hours contracts, but essentially, if he had spent heavily on transforming Newcastle and won some trophies, most of the fans wouldn’t have fretted too much about the welfare of Ashley’s employees. Does anyone ever complain about Roman Abramovich at Chelsea, Abu Dhabi at Manchester City, or Qatar at Paris Saint-Germain? Success has a habit of shelving any moral issues over the identity of club owners.  Yet dig beneath the surface and there’s many questions that can be asked about the origins and nature of the wealth that made it possible to buy all of these clubs.

Boundaries

This is where strong regulation is needed. Since 2008, financial services has been awash with new regulations, making it more difficult for banks and other firms. Compliance is one of the few growth industries in the financial world and it also applies to football. While some cavalier types see compliance as a hindrance, governance also protects stakeholders from getting into bed with the wrong people.

Is Saudi Arabia the wrong type of club owner? On the face of it, you could argue that as an ally and trading partner, the acquisition of Newcastle United by a UK partner is acceptable. If the concerns cannot be ignored, then a transaction to buy a football club should never be permitted or considered. Where do the boundaries truly lie and is it too late to change what is rapidly becoming the norm in modern football?

The UK has allowed the Saudi Arabian PIF to buy a £ 598 million stake in BP and invest in BT, newspapers, hotels and education. Furthermore, Saudi Arabia has stakes in Twitter, Uber and Snapchat. Britain also authorised almost £ 2 billion worth of arms to be sold to the Saudi-led coalition in Yemen and has sold spyware to Saudi Arabia (source: UK DeclassifIed).

The involvement of PIF also makes the declaration that Newcastle’s new owner will be independent of the Saudi state vaguely ridiculous. The chair of PIF is none other than Mohammed bin Salman and it has been reported that he was involved in dialogue with UK Prime Minister Boris Johnson to ensure the Newcastle deal went through with an apparent threat that the relationship between the two countries would be compromised if it did not reach a happy conclusion. No link, eh? 

Newcastle’s fans can avoid being challenged by pointing to the approvals, the government relationships and other reasons to be fairly ambivalent about what goes on inside Saudi Arabia. It’s not right, but it is a way out. The UK administration has rarely been open about its tie-up with them, but Mdawi al Rasheed of the London School of Economics, captured the problem perfectly: “By giving Gulf countries the opportunity to invest in Britain, despite their record on human rights, Britain becomes more dependent on these countries and unable to voice a critical opinion on their autocratic rule”. 

Saudi Arabia wants to improve its reputation and has been backing golf and motor sports in a bid to present a more modern, welcoming image. Critics merely write this off as “sports washing”, the practice of using investment in sport to gain greater legitimacy.

Problem

Do the fans really care who owns their club? Newcastle United are not alone here by any means, but they happen to be the latest example at a time when club ownership is very much in the spotlight and the subject of greed is very topical. The relationship between a club and its loyal fans is a simple one and also manifests itself as a very one-sided romance. The fans have little, if any, say in who owns a club and therefore cannot be blamed for any travelling band rolling into town with the latest snake-oil remedy to their problems. In the modern game, cash is king and ambition is, ultimately, demonstrated by how much of it you spend. 

The popular view of middle-eastern business is pots of infinite cash, so many fans interpret investment from the Gulf as limitless and transformational on a grand scale. Many will try and discard the criticism of Saudi Arabia, claiming it is none of their business and far away from home. The love of their club will overshadow any debate about human rights in much the same way that an earthquake in another part of the world is “not our problem”.

Conversely, those that have no strong feeling for Newcastle will see the deal as worrying and another blow against football’s moral code. There are other more toxic examples of Britain’s economic friendship with Saudi Arabia, but football captures headlines and is the game of the people. 

Needless to say, schadenfreude rules in football and the club’s opponents will rally against Saudi investment and use the human rights issue as a weapon to turn on Newcastle and their fans.

Will they worry too much? If the new regime promises a big war chest, which they undoubtedly will, Financial Fair Play permitting, then expectation will be high and even at this early stage, lists of possible signings will be circulating Tyneside. A new manager will surely be appointed, an acquisition that will send a signal to the rest of the football community.

The real winner in this game is currently Mike Ashley. He kept the club afloat in a sea of mediocrity while turning a profit and andreceived the selling price he was looking for. It wasn’t exciting and there was little in the way of joie de vivre at St. James’ Park. It was also unsuccessful. Having come through it, however, Newcastle United now have a different type of problem to deal with.

@GameofthePeople

Covid-19: It’s a political football

FOOTBALL continues to be divided over the timing of fans’ return to the stadiums. From a business perspective, no paying spectators is a disaster for most clubs, but the game still suffers from the ingrained perception that it is not a very important segment of society. Equally, there is a lack of widespread acknowledgement that culturally, football has a key role to play in maintaining public morale. 

There is a growing belief that suspending football and its resumption behind closed doors, was a decision based purely around politics rather than necessity. Although the game is the biggest crowd attraction among virtually all major sporting events, the historic sentiment suggested it was frivolous, inessential and, after all, merely a game. That may have been true in 1914 and perhaps 1939, although the mood around football was very different in the second world war, but in 2020, football is an industry enjoyed by millions, bringing meaning and enhancement to the lives of many and also generating huge sums of money. It is certainly no longer frivolous.

Icons

A group of academics[1] recently produced a paper on the subject of Covid-19 and the return of the fans, calling for the UK government to reverse the decision to prohibit spectators from attending football matches. Covid-19: The return of fans is published by the journal, Managing Sport & Leisure.

The report underlines that since the financial crisis of 2007-2012, a chasm has developed between supporters and the football elite. Fans have been taken for granted yet the game has become a socially constructed product. “A football club provides an identity, a cultural icon, escapism and a focus for social interaction,” says the paper.

Yet there are still examples of politicians failing to understand football’s true position in society. Conservative MP Jake Berry, speaking in the House of Commons[2], said the game was at the heart of the community in the north of England while in the south, opera, ballet and the theatre fill that role. He added that clubs like Accrington Stanley, Barrow and Carlisle United are the northern equivalent of the Royal Shakespeare Company. Such a comical view is very worrying for an industry that contributes so much to the whole nation.

It is clubs from League One and Two, not to mention the financially fragile Championship, that are most vulnerable to the impact of Covid-19. As the report reminds us, matchday income accounts for a high percentage of overall income, 30% for League One and 34% of League Two. The Premier League derives 13% of its revenues from matches and the Championship 20% but Scotland is even more vulnerable with 46%. 

Behind closed doors football has provided the public with its opium and although the Premier League can survive with this arrangement, thanks to the still sizeable broadcasting revenues, lower down, the clubs are in a precarious position. Gary Sweet, the CEO of Luton Town, told the BBC that football cannot survive a year without supporters and that if clubs tip into trouble, “there’s not really a queue of people willing to buy football clubs”.

The Chairman of the EFL, Rick Parry said the league’s members would lose £ 50 million in gate revenues and a further £ 250 million if no fans were admitted in 2020-21. “Such a hole in club finances will inevitably lead to insolvency for some…there is somewhat of a Darwinian feel around football if this impasse is not reversed, with the strongest clubs getting stronger and the weaker clubs perishing along the way,” said the academic paper.

Capitalism

We may have already witnessed the first attempt at exercising a power grab, something the paper suggests will happen if the current situation does not change. The “bail-out” of the EFL by the top Premier clubs, which would come at a cost, may have failed, but the problems may not have gone away. “This is how capitalism works,” said the research team. It is difficult, however, to see the modern game as anything other than a product of capitalism, which doesn’t bode well for those that want to see a more democratic football universe.

In a recent interview with POLITICO[3], the Premier League’s CEO, Richard Masters, hinted the Premier’s top clubs cannot afford to cut spending – the top six clubs spend more than £ 1.5 billion a season on wages – to support smaller rivals. “The Premier League is the most competitive in the world and you can’t stand still, you have to continue to compete and have to continue to invest,” he said. Meanwhile, some MPs have called for the Premier and the EFL to reach an agreement over any bail-out “for the good of the game”. There’s also pressure from the fans, some 200,000 of which have signed a petition for crowds to be permitted after the current lockdown. 

It is not just matchday revenues that have suffered from the pandemic, commercial revenues have also been compromised. The value of sponsorship is certainly diluted by a lack of supporters in a stadium. Broadcasting, too, may feel somewhat short-changed. PP Sports of China did not pay the Premier League its £ 160 million instalment for the 2019-20 season, resulting in the league terminating a lucrative £ 523 million deal two years ahead of schedule.[4]  The Premier League still manages to earn more than € 1.9 billion through the sale of TV rights.

The academic team cautions that “while we argue spectators need to be allowed back to games to ensure football survives, there are things clubs can do”. This includes more creative thinking around monetising of assets, perhaps suing technology to better effect. Clubs also need to make tougher financial decisions. The paper concludes: “Football is more than a business… if the UK government do not change their policy and allow spectators to return, they threaten the sustainability of our entire football infrastructure.”

@GameofthePeople
Photo: PA Images


[1] Alexander John Bond, David Cockayne, Jan Andre Lee Ludvigsen, Kieran Maguire, Daniel Parnell, Daniel Plumley, Paul Widdop, Rob Wilson. “Covid-19: the return of football fans”.

[2] The Independent, “Tory MP mocked after saying northerners like football but southerners prefer opera”, report by Colin Drury, November 12, 2020.

[3] POLITICO, November 9 2020: “Political Football: Premier League braces for scrutiny amid Covid deadlock.”

[4] Football Benchmark, “Season one after the Covid Outbreak” – September 15, 2020.

Lionel Messi and Barca approach a fork in the road

BARCELONA fans may be in denial and hoping Lionel Messi stays with the club, but the wheels are already in motion and there will be a host of Messi discussions going on in the boardrooms of the world’s biggest – and not so biggest – clubs.

It looks like the end of an era. It had to come sometime – he’s 33, after all – and it was inevitable that it might finish rather scruffily. Barcelona are a club in crisis at the moment, financially, politically, physically and emotionally. They lost their La Liga title and were humiliated in the UEFA Champions League by Bayern Munich. That night in Lisbon may go down in history as the fall of an empire.

There is a scene in The Godfather movie when newly-installed Don, Michael Corleone, asks Mo Greene if he can buy him out. In a fit of anger, Greene storms out and the hapless Fredo admonishes Michael and tells him he should not talk that way to guys like Mo Greene. You can imagine the interaction between Ronald Koeman and Messi was a little like that when the new Barca coach told the iconic Argentinian, “Your privileges here are over”. That may well have been the equivalent of a tiger spraying his patch, but it may also have been the clincher for Messi.

Determined

Messi was already unhappy about his pal, Luis Suarez, being told he can go elsewhere and he let Koeman know he felt more out than in. It does sound like there may be no way of going back.

According to Spanish football expert, Guillem Balague, Messi has no intention of undergoing pre-season tests and training with Koeman as coach. “Messi not only wants to leave, he is thinking of where he should go next. He doesn’t see himself at Barcelona anymore.”

In some ways, Messi has to be allowed to go, even though Barca feel he hasn’t the right to terminate his contract and point to the € 700 million buyout clause in the player’s contract. If Barca are in fact more than a club, they cannot be dictated to by a player even if he is the world’s best. The institution should be bigger than its employees and should refrain from entering into open combat with players. Marca declared “it’s war” in describing the situation. A poll run by the Spanish newspaper revealed that around 60% of Barca’s fans do not believe Messi has another club in mind.

Others disagree. Marca added that Inter Milan might be a logical destination – Messi’s father has just bought a house in one of the city’s best locations. Manchester City and the Guardiola connection is also seen as a possible choice. France’s L’Equipe, headlining with “Adios”, ruled-out any possible Paris Saint-Germain bid.

Talk Sport, meanwhile, predicts Messi will about-turn and sign a new three-year contract with the club. Guillem Balague believes this is not a game of negotiation or a power battle. Spain’s AS agrees: “Messi’s decision will be final.”

This is all very grim news for Barca’s current president, Josep Maria Bartomeu, who may or may not be about to resign. Fans gathered outside the club’s headquarters after Messi’s announcement, which was sent by “certified letter”, a Burofax.

Necessary?

Could it be that Barca actually need Messi to leave in order to fund a complete overhaul of its playing resources? The club has got some financial problems although Barca remain one of the world’s richest football institutions. After the crushing defeat at the hands of Bayern Munich, the club quickly disposed of their coach, Quique Setien and with Koeman’s arrival, a number of players were effectively nudged toward the exit, including Ivan Rakitic, Aturo Vidal, Samuel Umtiti and Suarez.

What does the future hold for Messi and Barcelona? Messi’s career will wind-down over the next couple of years although at the moment, he shows little sign of slowing-up. Given La Liga and the Premier are considered to be high intensity and more demanding than the other members of the big five leagues, it would not be a surprise if he has a similar approach to Cristiano Ronaldo. However, the Premier may be the only league that could realistically afford the fee if indeed there is a fee involved. The battle over his contract may become an ugly, protracted battle of wits that will probably only benefit lawyers in the Catalan capital. If that’s the case, it will be an unfortunate finale for both the player and club. As for Barcelona, it will take a while to rebuild their playing resources and also for Koeman to be truly successful – if he can endure such a political atmosphere.

One of the candidates for the club’s presidency, Victor Font, has warned that Barca could become the new AC Milan or Manchester United. In other words, old masters left behind by the changing football paradigm. That’s unlikely, but the club has to find its direction soon in order to remain competitive in Europe. With or without Messi.

Sources: BBC, AS, Marca, Guardian, Sportkeeda, Talksport.