Premier League gives green light for 'fair market value' deals for Newcastle United and Saudi companies
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Updated 14/12/2021 at 18:48 GMT
Since the controversial takeover of Newcastle United by a Saudi Arabia-backed consortium there had been a moratorium in place barring the club from organising sponsorship deals with the Saudi state with concerns from other clubs that they would unfairly distort the club's revenues. That ruling has now been overturned.
Newcastle United's Saudi Arabian chairman Yasir Al-Rumayyan (C) and Newcastle United's English minority owner Amanda Staveley (centre right)
Image credit: Getty Images
Newcastle United will be permitted to arrange sponsorship deals with Saudi Arabian companies if the Premier League believes them to be ‘fair market value.’
The decision to overturn the moratorium for deals took place at a vote of Premier League shareholders on Tuesday.
The league will be the arbiter of what it decides is a fair valuation, and the ruling comes after worries that Newcastle could use disproportionate Saudi revenue to pad out their finances to meet transfer spending rules under Financial Fair Play regulations.
Other Premier League clubs were reportedly unhappy with the takeover on the grounds that they would be able to distort their revenues with unreasonably generous sponsorship deals.
It is not clear how the valuation will be judged, and it also has implications for Manchester City, who have close relations with the Abu Dhabi state, and may start to arrange more deals with related companies along similar lines, something which had attracted its own investigations.
Newcastle are currently in the relegation zone and are expected to spend heavily to secure their Premier League survival after their recent takeover.
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