SIMON CHADWICK, professor of sports enterprise at the University of Salford Business School, comments on the potential sale of Newcastle United Football Club, to businesswoman Amanda Staveley.
Professor Chadwick said: “Early indications that Chinese investors were about to buy the club were someway wide of the mark, following a clampdown by the Beijing authorities on outward foreign investment. There is still a possibility that some funding for the rumoured United deal may come from East Asia, although one suspects this would only amount to a small proportion of the total deal package.
“More likely is that a combination of West Asian, and possibly North American money, is behind the stories now circulating. Staveley's business has previously claimed to be backed by significant funds from the Gulf region, hence it is likely that an investor from Dubai or possibly Saudi Arabia may be a source of the funding needed for this deal. Given diplomatic problems in the Gulf region, which has seen Qatar making very bold moves in football over the last few months, it could be that the country's regional adversaries want to make a counter-strike by acquiring a club to rival the likes of Qatari owned Paris Saint Germain.
“Newcastle United would be an interesting acquisition choice; it has a strong fan base in the North East of England, and there is some equity in the brand. However, it does not have the global appeal, reach or engagement levels of some of its English counterparts, and one therefore has to question how much and how far a new investor might be able to generate returns from ownership of the club.
“One factor limiting the financial potential of the club is the stadium. While large, development has always been difficult due to its city-centre position, and previous attempts to re-locate the club have failed. This suggests that local government and planning regulations may already be playing a part in discussions about the deal. The future of the club's stadium is likely to be one of the factors influencing the value prospective investors are prepared to pay for it. This definitely isn't a deal that is already 'over the line', indeed it may not be concluded until the New Year.
“If, however, the new owners were to be in place by the end of December, this would raise some very interesting questions about the next transfer window, which opens in January. If West Asians are involved in the deal, their normal conspicuous consumption habits suggests Newcastle fans may look ahead to some big signings. However, if North Americans and the Chinese are significantly involved in some way, player purchases in the next window are likely to be rather more considered, perhaps even conservative. It's going to be an interesting few weeks ahead for United and its fans, as they wait to see what presents Santa may bring them.”