PIF making 'statement to the world' at Newcastle United amid investment news from China

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With owners around seven times richer than every other Premier League side combined, Newcastle United can stake a claim to being one of the most powerful clubs in world football.

In terms of Profit and Sustainability Rules (PSR) the chips are stacked against them, true, but in terms of sheer influence and soft power, very few can compete with the Saudi Public Investment Fund (PIF).

There are other state-backed clubs in Paris Saint-Germain and Manchester City, financed by Qatar Sports Investment and Abu Dhabi United Group respectively.

But the eyes of the football world are fixed on Saudi Arabia at present, with the Gulf nation locked in as hosts of the 2034 World Cup and sustaining an unprecedented recruitment drive in the Saudi Pro League.

Relative to their other ventures in football and football-adjacent sectors, the money they are funnelling into Newcastle is next to nothing.

Even if PIF do spend £1bn on a new stadium, it will barely register on the sovereign wealth fund’s balance sheet. No fewer than 11 new stadiums will built for the World Cup, incidentally.

Late in 2024, one study from research group Play The Game found that PIF hold almost 800 positions of influence in sport, along with active 312 sponsorship contracts, 156 investments, and dozens of MoUs.

They are courting influence from world leaders including US president elect Donald Trump, who has met with PIF governor and Newcastle chairman Yasir Al-Rumayyan a number of times in recent months.

Countless petrodollars and man hours have been plunge into this leviathan sports strategy. The scale is utterly mind-blowing. But why?

PIF insist they run Newcastle as they would any other traditional business investment, suggesting that they one day hope to make a return on the £305m they paid for the club in October 2021.

But even with Eddie Howe’s superbly coached side flying high in the Premier League once again, the Saudis aren’t even close to achieving their grand aims on Tyneside.

When will that moment come? And what will happen to the Magpies when it does?

• READ MORE: Major new £84m PSR update today as Newcastle United fight to keep Alexander Isak from Arsenal

The Chinese Super League implosion: A cautionary tale for PIF and Newcastle?

There have been almost innumerable state-sponsored ventures into football over the years, from General Franco’s favoured Real Madrid side to Argentina’s military junta using the 1978 World Cup for credibility.

Closer to home, the proposed independent regulator for English football has cross-party support and the backing of fans, even if most Premier League chiefs can’t stand the idea of the government meddling in the game.

In the 2010s, China also looked to football as a way to cement themselves on the world stage culturally and economically.

As well as directing businesses to invest in European clubs, President Xi Jinping, like Saudi Arabia’s crown prince Mohamed bin Salman, had serious aspirations to host the World Cup.

But Xi’s regime’s interest in the sport gradually waned. Wolves owners Fosun, a Chinese investment firm, have massively scaled back their investment, as a result.

The Chinese Super League meanwhile – once home to stars like Oscar, Hulk and Carlos Tevez, as well as former Magpies Papiss Cisse, Cheick Tiote and manager Rafael Benitez – has also effectively gone caput.

That is largely thanks to directives from Xi’s government, who have lost faith in football as a soft power vehicle.

As relayed by BBC Sport this week, China’s most decorated club Guangzhou will not be allowed to play professionally next season due to their spiralling debt, a situation not at all uncommon in the league.

For Newcastle, is the Chinese Super League a cautionary tale of how state-backed clubs are at the whims of a single political regime, or even a single individual?

Not according to Liverpool University football finance expert Kieran Maguire, speaking exclusively to TBR Football about Newcastle’s position in PIF’s geopolitical ambitions.

Saudi Arabia’s football project “worlds apart” from China’s, says football finance expert.

“I think the experiences in the Chinese Super League and Saudi Pro League are worlds apart,” says Maguire.

“The Chinese government decided to reverse its position with regards to embracing football.

“After 2016-17, private companies could no longer own clubs and there were transfer restrictions and salary caps and so on. That meant the desire to consume the game very much tapered off.

“As far as Saudi Arabia is concerned, it has the biggest sports product on the planet coming up in 2034.

“It has unlimited funds and wants to make a statement to the rest of the world. It wants to be a tourist hub, a place for doing deals, a sporting centre for the world.

“The project will very much be continued at pace. Newcastle are part of that project. They were a very cheap acquisition from PIF’s point of view.

“The success we have seen in recent weeks will have been noted in Saudi Arabia and funds will continue.

“They want success on the pitch in the long term to be part of Saudi Arabia’s broader investment capabilities.“