Toon Takeover; Questions for the Premier League

by | Oct 9, 2021

One James Lowery, on Twitter, put it best. As up to 33,000 Newcastle United fans watched part or all of what must surely have been their first-ever Competition Appeal Tribunal (CAT) Hearing, on 29 September, Lowery tweeted: “Huge numbers of Newcastle fans will today sit and watch something where they have absolutely no clue what is going on, out of duty to their club. Basically, like Steve Bruce on a matchday.”

For many Newcastle fans, as with most football fanbases, the major issue surrounding their takeover is who the takeover forces out and the money it brings in, whoever’s it is and however it was made. Current owner Mike Ashley seems to have been on the departure wish list since Jackie Milburn was a lad, and current manager Bruce was on it from the second he became current manager through to his failures to fully utilise the current attacking talent at the club.

Yes, the takeover’s ethical repugnance, by a consortium including the majority shareholders in Saudi Arabia’s sovereign wealth fund, is clear-cut, unless you believe that the consortium’s ownership structure represents a genuine separation between them and the Kingdom of Saudi Arabia. In which case, there’s this Nigerian prince who needs your help.

But while the war in Yemen, the brutal murder of journalist Jamal Khashoggi and (FFS!) 9/11 are/were all Saudi state or citizens’ operations, none of them breached English Premier League (EPL) rules, or threatened “its own commercial interests and/or the interests of its business associates,” a very mafiosi phrase which leaps out from the claim covered by the CAT hearing. And, sadly, the ethical ship, or more likely here, the €500m, 450ft long superyacht containing a VIP stateroom and a master suite with a fold-out balcony, sailed (from Manchester City harbour) long ago.

However, questions remain about the motivations throughout this drawn-out takeover of the EPL and “certain of the Premier League’s member clubs,” to use another phrase from the CAT claim. Indeed, the CAT claim is the basis for many of these questions.

Everyone looking properly has directly linked the end of a long-running dispute over the live streaming of the EPL in the Kingdom to the freeing of the takeover logjam. And the chronological adjacency of the events facilitates the link. But these observations will be filed under ‘sour grapes’ when Newcastle win the EPL. And it is ‘when,’ not ‘if.’ Because, you know, money.

The CAT claimant was St James Holdings (SJH), the 100% shareholder of the club, the Newcastle United Football Company, via its 100% ownership of holding company Newcastle United Limited. SJH’s claim was against the EPL. Or, formally, what is still the Football Association (!) Premier League Limited, whose principal activity is to “manage” the EPL and “exploit broadcasting and other commercial rights granted to (it) by its member clubs for the benefit of the rights holders.”

SJH claimed that the EPL had infringed relevant competition law in “in the exercise of (its) power to block” the takeover by PZ Newco Limited (PZ), the majority of whose shares “are indirectly owned by the Public Investment Fund (PIF) (the sovereign wealth fund of the kingdom of Saudi Arabia),” with the remaining PZ shares “owned by three individuals,” as yet un-named.

PZ was incorporated in January 2020, not unadjacent to the start date of this Newcastle takeover saga. Companies House lists its directors as regular takeover cast member Amanda Staveley and her husband, with Cantervale Limited (prop: Amanda Staveley) listed as the sole “active person” with significant control. And its first year accounts list no shareholders…or anything at all apart from £2 in fixed assets (I’m picturing a stapled-down copy of a Sunday Express newspaper here…but I’m no accountant). When they say “micro-entity accounts” on the front page, they mean it.

In the EPL’s formal takeover announcement, the new owners were “a consortium of PIF,” private equity company “PCR Capital Partners,” founded by Staveley, and private equity company Reuben Brothers’ imaginatively-entitled sports and media firm, “RB Sports and Media” (RBSM). RBSM was incorporated in January 2020, not unadjacent to the start date of this Newcastle takeover saga, and its unfiled first-year accounts will be late come 21st October.

One Reuben, Jamie, is a “Tory socialite” (well, it’s a living) who spent two years on the QPR board, October 2018 to October 2020, during which QPR finished in the lower reaches of the Championship, having spent the previous three years in the…lower reaches of the Championship. Still, Kim Kardashian went to his most recent birthday party. So, there’s that.

Anyway, so far, so labyrinthine. But the impression that the PIF is calling all the shots is almost indelible, with PZ and RBSM seemingly founded FOR the takeover and Staveley all over a company majorly owned by the PIF. How all these relationships have changed so as to become ‘acceptable to the EPL’ having been ‘unacceptable to the EPL’ last year is currently the main question, to which the EPL saying they have “received legally binding assurances that the kingdom of Saudi Arabia will not control Newcastle United Football Club” is not the answer.

The CAT claim was accompanied, and delayed, by an arbitration case against the EPL, instigated by Newcastle’s now-former owner Mike Ashley (and, whatever the takeover traumas, that is still a good thing to write) last September. This was a separate case but, according to CAT documents, it was “said to cover materially identical issues” to those in the claim. And it had its own fraught history, raising more questions about the EPL’s conduct when frequent EPL legal advisor Michael Beloff QC was appointed arbitration panel chair by the two panel members chosen by the club and the league.

SJH’s issues with the EPL were financial not football, because, well, 2021. SJH claimed that when the EPL “decided” to block the takeover because Saudi Arabia “would be a director exercising ‘control’ over the club,” it “failed to apply the rules in a fair, objective and non-discriminatory manner” and/or “used its powers” improperly to promote “its own commercial interests and/or the interests of its business associates and/or certain of the (EPL’s) member clubs” (my emphasis).

SJH said the EPL was “active on the economic markets on which (EPL) clubs compete” and that their “dominant” market positions gave them “an exclusive gatekeeper role” with power to “include or exclude new owners, new management of, and new investment in, member clubs.” Exclusions could potentially “restrict competition between clubs” (that inclusions could “potentially” destroy competition, and had arguably done so for many clubs, was not an issue). Thus, they had “a special responsibility” to exercise these powers properly and not “for an ulterior commercial motive.”

The exclusion’s “object or effect,” SJH insisted, was the prevention, restriction or distortion of competition on the relevant markets.” (the “distortion of competition” in the EPL itself, by including “new investment in member clubs” was not an issue). And they concluded that the EPL’s refusal “to deal with PZ” and imposition of “unfair trading conditions on PZ,” would “distort and/or restrict competition between EPL clubs.”

SJH therefore sought damages, having “suffered loss and damage” through losing “the likely opportunity of an immediate sale of its shares in NUL (which owns NUFC) to PZ” (trans: cash-in, big time). They also sought interest on their resultant financial losses and a now un-necessary “injunction” forcing the EPL to “withdraw…and/or reconsider” their takeover rejection.

The 29th September hearing was only a procedural, concerning an EPL challenge to the tribunal’s jurisdiction over the case. But SJH’s barrister, Daniel Jowell QC, seized the opportunity to bring their juicier allegations to a far wider audience than one attracted by dry legal summaries on government tribunal websites. He said that “a number of major” EPL clubs had joined media organisation BEIN Sports “in lobbying against the takeover.”

And he made a naked headline-grab by citing an EPL “threat” to “stop the club participating in the competition,” which became “Newcastle ‘threatened with being thrown out of the Premier League’” when the tabloids’ sensationalist sub-editors got going (bloody Daily Telegraph). BBC Sport’s Alistair Magowan reported the “threat” as “relating to an explanation of ownership rules had both parties failed to reach an agreement.” But there was soon a twitter storm of fan-indignation about the EPL’s putative European Super Leaguers only being fined for their treacheries. Jowell’s job was done.

The only ‘news’ from the hearing was that the arbitration case was set for 3rd January 2022. The EPL’s OC, Adam Lewis, said it would last “little more than a week.” But even that seems a long time for a dispute which ended so abruptly. CAT documents show that even the EPL’s challenge to the tribunal’s jurisdiction involved “detailed submissions and supporting evidence” and, they claimed unsuccessfully, “sight of a confidential addendum” filed by SJH. What happened to all that?

Tuesday’s takeover tales were full of woe, though mostly garnered by the gormless Simon Jordan on his gormless show on gormless Talksport Radio. “There is not a cat in hell’s chance that this deal will go through,” he said, without gorm. But he was in line with perceived wisdom. Then the BEIN Sports dispute was solved. And it became clear that the EPL “commercial interests” cited by SJH involved that dispute alone. Thus, with those interests protected, the EPL had no interest/interests in the relationship between Saudi state and takeover.

In VERY short (a 125-page World Trade Organisation report is but part of the tale), Qatar-based BEIN Sports has the Middle East EPL broadcast rights. But with Qatar and the Saudis in dispute over…everything, BEIN Sports was banned from Saudi Arabia, where EPL matches were instead shown by ‘pirate’ broadcaster, ahem, beoutQ, which the WTO said was backed by the Saudi state. The BEIN ban was lifted on Tuesday. And, hey presto,, the takeover was approved. “Sources told BBC Sport” that “an agreement between the EPL and the consortium was found” beforehand. But, well…

The interests of “certain” clubs, also cited by SJH, seem clear too. The EPL originated from a “big five,” the European Super League (ESL) from a “big six.” And with only four Champions League spots on offer, a “big seven” was too big. This season, Spurs, most speculated upon as a “certain” club and among the big five AND six, are in the Europa Conference League. And fellow “big” club Arsenal might need a Europa Isthmian League to return to European competition if their recent improved form is no more than beating a sh*te Spurs team. But with the BEIN money (£400m over three years) safe, the “certain” clubs can go hang. Which may be recalled if the ESL re-emerges.

It is hard to judge the worst thing about this week’s events. Is it the headline “Taliban to take over Middlesbrough” on the satirical ‘Daily Mash’ website feeling less like satire than a natural progression; less of a moral descent from Newcastle to Middlesbrough than from Manchester City to Newcastle. What could stop the Taliban funding an EPL-bound Boro’ with opium trade profits? Human rights abuses? Religious extremism? Systemic misogyny? Waging foreign wars? 9/11 involvement? None of the above, it now seems.

Or is it how little the EPL care about covering its “fcuk-morality-when-the money’s-right” tracks. One day, the BEIN dispute ends. The next, the takeover is green-lighted. And the EPL says the events were unconnected, despite nothing about the takeover itself changing. It’s football’s version of modern politicians making two-plus-two equal seven and going unchallenged.

There is a spoof section on US talk show ‘Real Time with Bill Maher’ called “I don’t know it for a fact…I just know its true.” Every questionable aspect of Newcastle’s takeover falls into that category. Like very stroke pulled by former football luminary Ken Bates. Except now, those pulling the strokes are the rule-makers and the rules’ supposed guardians. The sights and sounds of Newcastle fans rejoicing despite the takeover’s immorality may irk many. But the real culprit here remains England’s Premier League and all that it now stands for.