'Yellow Newcastle kit incoming': PIF agree major new fashion deal as expert makes prediction
Today at 01:26 PM
Adidas’s Newcastle United range has been a hit with the St James’ Park faithful and PIF’s latest major business deal is fuelling speculation about the next big collaboration.
Newcastle are expected to bank around £200m over the course of the reported five-year deal with Adidas, the German sportswear giants with whom they have a historic connection.
The kits the Magpies have release with Adidas for 2024-25 feature branding from two sponsors linked to the Saudi Public Investment Fund (PIF).
Sela, a sports an entertainment brand found in 1997, pay Newcastle £25m per season for their front-of-shirt rights, while ecommerce platform Noon’s sleeve deal is worth £7m over the same period.
Newcastle have focused heavily on commercial income in their attempts to carve out room to manoeuvre under the Premier League’s restrictive Profit and Sustainability Rules (PSR).
They have struck a number of deals with companies linked with their owners in the process, which is entirely above board as long as they have been agreed at fair market value.
These types of deals, known as associated party transactions (APTs) are under the microscope at present after Man City‘s self-proclaimed victory over the Premier League‘s enforcement of the APT rules.
One finance expert appears to have suggested that Newcastle could potentially strike another APT deal that would lead to a kit collaboration with a highstreet brand.
PIF’s latest business deal
PIF control almost £1trillion worth of assets in their attempts to diversify the Saudi economy away from fossil fuels.
Newcastle are just one asset in that portfolio, albeit a high-profile one which they hope will deliver cultural capital as well as financial returns in the long term.
Today, it has been announced that the Public Investment Fund have acquired a 40 per cent stake in Selfridges, the loss-making retailer.
No value for the deal has been reported, but it last changed hands for £4bn in 2021.
Legal and financial expert Stefan Borson, who previously worked as an advisor for Man City, has suggested that there is a “yellow Newcastle third kit incoming”.
And while his comments may have been slightly tongue-in-cheek, they do point to a broader theme that PIF uses to market its assets.
The green kits, which are believed to be a nod to the Saudi flag, that Newcastle have sported in the last two seasons have been controversial but well received among the local fanbase.
And it would not be out of the realms of possibility for PIF to use their ownership connection to make Newcastle a sporting billboard for Selfridges and their iconic yellow colourway.
PSR and APT: What next for Newcastle?
City’s landmark ‘victory’ over the Premier League has sparked excitement among Newcastle fans that the PSR system could be overthrown.
However, that will not happen.
In fact, there is some ambiguity as to what extent City have ‘won’ the arbitration proceedings at all.
The APT rules will have to be revised somewhat in the wake of the case, but the fair market value element of the model will remain.
That means any hopes that Newcastle’s owners will be able to pump in unlimited money and sanction Saudi Pro League levels of spending are misplaced at present.
