Football, money, society: pick the odd one out | Dan Mikhaylov
Mohammed Bin Salman has many titles: Saudi Defence Minister, the country’s Crown Prince, the man almost certainly behind Jamal Khashoggi’s grisly murder. Just a week ago, he earned himself another epithet – the owner of Newcastle United FC. For a small fee of £300 million, the 34 year-old autocrat has purchased himself an exclusive chance to flex his wealth before the Emirati Deputy Prime Minister, Sheikh Mansour and the oligarch ex-governor of Chukotka, Roman Abramovich. Joining the ranks of sporting arrivistes, whose generous investment has helped inflate transfer prices and players’ wages, he will no doubt strive to outshine his Arab rivals, the owners of Manchester City and Sheffield United, two financially stable Premier League sides.
Newcastle fans may very well feel enlivened at the prospect of lavish spending on their favourite team and the club’s facilities, along with further investments spilling over into infrastructure. After all, Manchester City’s Sheikh Mansour has substantially improved the local infrastructure through community outreach programs; his funds went into the construction of a sixth-form college, a leisure centre, and what CNN has dubbed “a cutting-edge medical institute”. Whether out of primitive jealousy or as part of an adroit strategy, the new owner is very likely to embark on a comparable project after he fully takes over the Magpies and the league fixtures resume.
At first glance, such financial assistance to British communities seems laudable. However, it also raises certain questions. As the Roman emperor Vespasian has famously proclaimed, money has no smell, but does this statement hold true today? By accepting funding from the very leaders of countries known for questionable understanding of ethics and human rights, do we end up turning a blind eye to them or even their covert interests in the UK? Do the prospects of gentrification and socioeconomic revival of British neighbourhoods justify allowing opaque organisations with money of questionable origin to control parts of our entertainment industry? As their influence extends over one sporting club after another, these queries have to be answered.
Before proceeding with our discourse, it should be clarified that, unlike the Emirati-owned Manchester plaything, the Geordie side has technically been acquired by Amanda Staveley, a British businesswoman with ties to Middle Eastern investors. Her company, PCP Capital Partners, used to represent the interests of Sheikh Mansour in his high-profile pursuit of Man City, since then becoming closely associated with the Public Investment Fund (PIF) of Saudi Arabia. Amongst the world’s largest sovereign wealth funds, with more than $320 billion in its assets, it was established in 1971 with the aim of investing funds on behalf of the Saudi government. In the past, this entity subsidised such companies as Elon Musk’s Tesla and Stephen A. Schwarzman’s The Blackstone Group, and many suspect this kind of soft power serves to complement the nation’s diplomatic initiatives.
Andrew England of The Financial Times has revealed that the fund entered into “a $120,000-a-month contract with Karv Communications”, a New York-based PR firm, which he concatenates to Jamal Khashoggi’s disgusting death. According to him, that brutal assassination “trigged Saudi Arabia’s worst diplomatic crisis since the September 11 attacks on the US”, prompting officials to attempt to recuperate the country’s diplomatic reputation by such means. Having chosen to make yet another tactical investment, this time in the UK, Mohammed Bin Salman’s PIF will reportedly control 80% of the club’s shares with the other 20% to be equally split between Ms. Staveley and the Reuben family, Britain’s second richest clan according to The Sunday Times.
Up to this point, the Saudi Crown Prince has largely behaved like a visionary. Unleashing a cascade of anti-corruption purges, outlining a blueprint to diversify the monarchy’s economy by virtue of changing her image to a relatively more liberal and tourist-friendly place on the map. And choosing to list Aramco on the Tadawul stock exchange, he strove to have his name remembered. As evidenced by his successes in dealing with the Kremlin and the White House, persuading the former to stall its voracious strategy to starve the US shale industry and Saudi’s financial reserves by lowering oil prices and simultaneously integrating the latter in the global network of petrol-producing states, his mind is not without astuteness. Therefore, his decision to invest in Newcastle potentially constitutes but a small fragment in something far more ambitious and prescient.
Of course, this is speculative. For all we know, the move has coincided with vast financial losses endured by his country as a result of plummeting oil prices. In such a context, his objective could have been to reassure the Saudi citizens and the global community that Saudi Arabia is inviolable even amidst the existing market complications.
Since this represents only a second major deal concluded between Saudi Arabia and the realm of sports in the 2019-20, that assessment nonetheless appears to be illusory. In spring, Aramco extended its reach into auto racing, negotiating a $110 billion contract with Formula One and promising another $60 billion on the proviso that the Grand-Prix took place on Saudi soil. Judging by its willingness to pay, we could expect Newcastle to bask in petrol money as well. Indeed, some suspect one of the fund’s initial changes in charge of the club would be reneging on the previous owner’s dependence on the UK government to supply its employees’ wages – a great PR move, given that almost all Premier League clubs have already rejected state assistance.
Notwithstanding this euphoria, Bin Salman’s relationship with our state would hardly constitute a walk in the park. The influx of seemingly limitless foreign money, albeit commendable and understandably on behalf of Newcastle’s denizens, will exacerbate the growing disparities between certain opulent Premier League sides and other sporting associations in the UK. With the need to minimize expenditure looming over like the Sword of Damocles, divisions between those who easily afford to stay afloat and those who battle for a single crumb will certainly amplify.
Since the early 2000s, football has changed. Most domestic entrepreneurs, no matter their altruism, have struggled to compete with the likes of parastatal Chinese conglomerates, Russian oligarchs, and Arabian princes. Tottenham Hotspur, the sole club out of the so-called Top Six to be owned by a British company ENIC Group, is coincidentally the one that spends the least amount of money on wages despite the need to keep up in that Cold War-like environment. Unable to overcome the obstacles of unfair competition, they resort to leaving the battlefield to those who continually corrupt it. COVID-19 will only add to the existing divide, with one top division side, Burnley FC, already professing the possibility of bankruptcy.
As it stands, we have allowed substantial economic inequality to arise in one of the world’s most famous sporting tournaments. We have been turning a fatal blind eye to the poorly surveyed, unregulated arrival of exogenous investment that has bullied British owners out of our sporting industry and fostered tragic conditions, whereby one’s ability to enjoy the game outside London and other major cities is threatened by a virus outbreak. There has been a major trade-off for this; swiftly accumulating wealth from lucrative broadcasting and sponsorship deals, our league has become the first amongst equals. However, this has resulted in a false idyll of perennial economic stability.
To remedy this and preserve the beauty and accessibility of sport, we believe that the government must intervene. It is time to regulate owners’ expenditure, perhaps with a gradual goal of introducing a similar model to the one seen in Germany. There, the rule of 50+1 ensures that most clubs are controlled by the fans, while investors may choose to purchase the remaining 49% of the shares and play a major role in helping convert the supporters’ dreams into palpable reality.
State intervention, or rather state oversight, will be all the more necessary after PIF has obtained power over Newcastle United. Unlike rich businessmen from abroad who spend their own money and whose efforts to bolster our economy should go neither unnoticed nor unrequited, the PIF is spending state money. It is directly controlled by Saudi Arabian elites. Rather than a private entity, it constitutes a government-funded foreign agent and must be held accountable for all the inroads into our socioeconomic wellbeing it may carry out.
It is one thing for a private firm from a country, whose values conflict with our own, to sponsor sporting events in Britain. It is another for a government agency, even if armed with nothing but soft power, to roam freely within our country’s boundaries.
Consequently, new measures should be implemented by the Football Association (FA) as well as by our own government’s various departments to safeguard the industry from dubious, potentially malevolent foreign investment. These have to come, considering that the transfer of ownership in Newcastle has been preceded by earlier acquisitions by external state actors.
Sheikh Mansour, the reigning Deputy Prime Minister of the UAE and the President’s half-brother, owns Manchester City. Wolverhampton Wanderers are under the yoke of the Chinese conglomerate, Fosun International. Chelsea is controlled by an oligarch accused of links to Vladimir Putin. This is the situation’s freeze-frame sad shot. As other owners are obstructed from finding ways to pay their players, once Premier League matches resume, more and more clubs will be vulnerable. In other words, they will be susceptible to purchase by well-funded foreign agents, blotted by ties to their countries’ governments.
In this article, we propose that the former kind of vulnerability (that of usurpation by external companies with capacity to advance their government’s geopolitical agenda and pursue goals other than the sports-related ones) merits attention as much as the more customary form of financial fragility that many businesses will experience this year. To neglect this issue would equate to signing a blank cheque to the authorities of other states, enticing them to come and interfere in our affairs on British soil.
While Mohammed bin Salman’s ownership of Newcastle United is water under the bridge and expropriating his possessions would implicitly legalise state racketeering, his actions deserve to be checked. Lest we expose ourselves to foreign pressure from within via obstinate non-intervention in the entertainment industry, we should actuate mechanisms to nip this pressure in the bud. The peculiar trinity of football, money, and society does not have to exclude any one of those three, and it is our collective duty to ensure the last one is not the odd one out.
