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The controversial Saudi Arabian-led takeover of Newcastle United is set to be approved if the club can prove the Gulf kingdom will not be a director of the club.
That issue is due to be determined in early January when arbitration proceedings between Newcastle and the Premier League will decide whether the blocked buyout can proceed.
Until Wednesday, when a separate case opened involving Newcastle’s owner, Mike Ashley, and the Premier League at the competition appeals tribunal (CAT), it was not publicly known that arbitration proceedings are scheduled to begin in private on 3 January, lasting just over a week.
On Wednesday the QC employed by Ashley’s St James’ Holdings alleged that not only had leading clubs and the Qatar-based broadcaster beIN Sports lobbied the Premier League to kill the takeover but that the league had mentioned that Newcastle might conceivably be expelled from English football’s top tier.
During the preliminary CAT hearing convened to determine whether Ashley has a case to claim damages, the Premier League’s QC, Adam Lewis, explained that arbitration hinged on the separation – or otherwise – of the Kingdom of Saudi Arabia and the country’s Public Investment Fund (PIF). Along with the financier Amanda Staveley and the billionaire Reuben Brothers, PIF has formed a consortium with the financier Amanda Staveley and the billionaire Reuben Brothers that has agreed a £300m sale with Ashley.
In the course of arguing that a full CAT hearing would needlessly duplicate the impending independent arbitration process staged under Premier League auspices, Lewis detailed the standard of proof required in early January. “If the arbitration decides KSA is not a director then the transaction can and will go ahead, with no question of the owners’ and directors’ test being applied to KSA,” he said.
Although determining the degree of separation between KSA and PIF is a question of legal semantics, the statement that KSA would not be subjected to the league’s owners’ and directors’ test is significant. This dictates that the alleged role of Mohammed bin Salman, Saudi Arabia’s de facto leader, in the murder of the Saudi dissident journalist Jamal Khashoggi in Istanbul in 2018 would not feature in the decision-making process.
Daniel Jowell QC, representing St James’ Holdings, argued that the collapse of the club’s sale in July 2020 could eventually cost Newcastle “hundreds of millions” of pounds in lost investment and that the CAT damages claim was accordingly distinct from arbitration. He also raised fears that, even were the takeover approved in January, PIF could walk away from the deal or renegotiate it on less favourable terms.
Jowell claimed that “major” Premier League clubs pressurised the league to block a deal that would have made Newcastle extraordinarily wealthy. “We say that this lobby and the pressure distorted the Premier League’s fair and objective application of the rules,” he said.
There was also the role of beIN Sports in opposing the takeover, in part because of Qatar’s then pronounced regional rivalry with Saudi and, most pertinently, its allegations of broadcast piracy against the KSA. “At the time the Premier League was reaching its decision, beIN was in the midst of negotiations with the Premier League for another three years’ [overseas] rights deal,” said Jowell. “It was very publicly reported at the time that the beIN media group actively lobbied the Premier League against the takeover of Newcastle.”
Jowell also alleged that, as the arguments over the prospective sale intensified last year, Premier League officials threatened Newcastle with potential expulsion from English football’s top division. However, he confirmed: “The Premier League hasn’t carried through its threat to stop the club from participating in the competition.”
Shortly after that minor bombshell the hearing concluded with the three-man panel departing to consider the evidence. No timeframe was given for a decision.