- Saudi Arabia's Private Investment Fund (PIF) has taken over Newcastle United.
- This transfer has shone a light on the ethics of football ownership in England.
- While the Bundesliga in Germany is known for it's financial Prudence, the Premier League is rather reckless with their spendings on the Transfermarket.
As the curtain came down on Freiburg’s time at the old Dreisamstadion, the Black Forest side signed off in style with a stirring 3-0 win over an obliging Augsburg. After the final whistle of the final match before the move to the new Europa Park ground, SCF coach Christian Streich addressed the fans with a megaphone, and cried tears of pure emotion as those same supporters sung his name. It was the kind of heart-tugging scene that the Bundesliga is so good at producing.
Freiburg are a club that consistently punches above its weight. Streich’s incredible tactical awareness and ability to develop young talent keeps the club afloat in the top tier, and season upon season, Freiburg defy the odds and the prevailing football logic. If you need endless pots of money to compete in football, no-one has told Streich or Freiburg.
A good team doesn't always have to be expensive
SCF aren’t the only club that has been able to establish itself in the Bundesliga with modest means. Mainz and Augsburg have also been able to show that teams without a glittering history or deep pockets can hold their own, if they are run sensibly and diligently. Yes, they are never likely to win a major trophy, but they can ensure regular clashes the big hitters like Bayern Munich or Borussia Dortmund, and they can attract top young talent.
Financial prudence and careful planning matters in Germany, and the 50 + 1 rule (which ensures no one entity or individual can hold the majority of a club’s voting rights) means that the league hasn’t been flooded by rich investors who want total control. There remains controversy regarding Wolfsburg (owned by Volkswagen), Bayer Leverkusen (owned by Bayer), Hoffenheim (bankrolled by billionaire software entrepreneur Dietmar Hopp) and Red Bull’s involvement in RB Leipzig, but generally fans do have a big say in what happens at their clubs, and they can’t be completely frozen out.
The Premier League spends reckless amounts on transfers
Compared to the Bundesliga, the Premier League must seem to German supporters like the Wild West, an unregulated hellscape of greed and excess where everything is available to the highest bidder. According to Transfermarkt, Premier League clubs spent £1.21b in the summer, making a total loss across the league of nearly £627m. The Bundesliga actually made a net profit of over £28m in the summer, and transfer spending totalled just £404m.
Of course, it would be unfair to damn all Premier League clubs as reckless. The German influence has been keenly felt at Norwich City, with a German coach in Daniel Farke and a sporting director in Stuart Webber who admits he admires the work done in the Bundesliga when it comes to the transfer market.
It says a lot about the current obsession with transfers in England that the Canaries have been heavily criticised in the media for not being willing to overspend. Tony Bloom at Brighton and Matthew Benham at Brentford are examples of owners who have run their clubs with prudence and an awareness of how important it is to listen to supporters.
Saudi Arabia’s PIF takeover of Newcastle United is facing the critics
However, the takeover of Newcastle United by Saudi Arabia’s PIF (Public Investment Fund) has shone a light on the ethics of football ownership in England. Despite protestations to the contrary from the new owners and indeed the Premier League, it seems fanciful and naïve to suggest there is enough separation between the PIF and the Saudi state itself.
On that basis, Saudi Arabia’s record on human rights and other issues is understandably in the spotlight. The murder of the Saudi journalist Jamal Khashoggi – a prominent critic of the Saudi regime - at the Saudi consulate in Istanbul has become a lightning rod for critics of the takeover, critics who believe the Premier League’s entry restrictions for potential owners should be far more stringent.
The Saudi PIF’s move to buy Newcastle has been labelled by some as "sportswashing", the use of top-level sport to project a benevolent image of a regime with practices that are seen as abhorrent and/or unacceptable. In a way, that process has already begun, as fans of the club have indulged in marathon bouts of whataboutery on social media. What about Qatar? What about Manchester City and PSG? If you have a problem with Saudi investment in Newcastle, why don’t you have a problem with investment in Formula One, or Disney, or Starbucks?
The investor reflects on the club
In Amnesty International’s latest assessment of Saudi Arabia, it concluded that "repression of the rights to freedom of expression, association and assembly intensified" and that government critics, human rights defenders and women’s rights activists were harassed, arbitrarily detained and jailed. Trials were described in the report as "grossly unfair" and the pandemic meant that migrant workers were even more vulnerable to abuse and exploitation. Courts resorted extensively to the death penalty, and people were executed for a wide range of crimes.
Whether Newcastle fans like it or not, the issues contained within the report now reflect on their club by association. How can Newcastle participate in the anti-homophobia Rainbow Laces campaign if the majority shareholders are from a country where same-sex sexual activity is illegal? Amnesty International have asked for a meeting with the Premier League to discuss the takeover, citing concerns over human rights.
I have some sympathy with Newcastle fans. Dismayed by years of inertia under the soulless ownership of UK retail magnate Mike Ashley, supporters were desperate for a change, and some of them gleefully celebrated in the streets of Newcastle when the takeover was confirmed.
While I wouldn’t want those owners to buy my club, I can understand why a sudden and dizzyingly large injection of transfer funds would be a thrill. It’s also worth bearing in mind that the UK Government has a close commercial relationship with Saudi Arabia and has sold billions of pounds of weapons to the country. Can we hold Newcastle supporters to a higher ethical standard than we hold the country’s leaders to?
There are many thorny questions surrounding this takeover, and indeed the ethics of football in general. A global pandemic hasn’t really slowed down spending on transfers and wages, many fans have been priced out of attending top-level games and the gap between the elite and the rest is getting bigger all the time.
German football isn’t perfect, and as ultra groups and other fan organisations will tell you, the link between clubs and supporters isn’t always as strong or as harmonious as it should be. Bayern’s domination of the Bundesliga is unhealthy, although I don’t blame the Bavarian giants for that. Supporters may look at the transfer fees spent elsewhere, and feel the green-eyed monster perching on their shoulder. But if the 50 + 1 rule prevents the kind of takeover that has just happened at Newcastle United, let us cherish it. Let the Streichs and the Freiburgs prosper, and let the fans have their say.