Newcastle United gain unlikely FFP ally who could help them unlock £726bn PIF fund

Newcastle United have gained an unlikely ally whose influence could be key in overturning the Premier League’s associated party transaction rules.

The Magpies became the richest club in the world when the Saudi Public Investment Fund complete a £305m takeover from Mike Ashley in October 2021 – on paper at least.

In reality, while PIF have sanctioned significant investment,their ambitions have been anchored to the Premier League’s Profit and Sustainability Rules, or PSR (formerly financial fair play, or FFP).

In the immediate wake of PIF’s takeover, Premier League clubs voted through new measures to prevent clubs from signing inflated sponsor deals with owner-funded companies in order to bypass PSR.

Newcastle have signed a number of deals with associated parties, including their front-of-shirt and sleeve deals with PIF-funded Sela and Noon, which are worth £32.5m a year to Newcastle in total.

But those deals have had to pass the Premier League’s Fair Market Value test, meaning that PIF have not been able to use the deals to pump limitless cash into the club.

UAE-funded Man City arecurrently in the process of challenging the associated party rules in the courts, with Newcastle watching on with interest.

Now, it appears that City and Newcastle’s cause has a new advocate from an unlikely source.

Sir Jim Ratcliffe attacks associated party transaction rules

The next truly blockbuster Premier League takeover following PIF’s acquisition of Newcastle was Sir Jim Ratcliffe’s partial buyout of Man United in February this year.

The 71-year-old has wasted no time in making his mark on the club and, in his latest media appearance, appears to have now thrown his weight behind the fight against associated party transaction rules.

*“I can understand why they \[Man City\] are challenging it,”* he told [Bloomberg ](https://www.bloomberg.com/news/videos/2024-06-20/jim-ratcliffe-on-man-united-s-future-uk-election-video)in an interview that covered a range of topics affecting United at governance level\.

“You can understand why they would say that they want an open market, a free market.”

Why is Ratcliffe an unlikely ally? Because, in theory, United are the last club who need the associated party restrictions lifted.

Unlike Newcastle, United already have huge revenue regardless of their sporting performance. Even when they have had a fallow year on the pitch, the impact on their bottom line is relatively negligible.

How much Newcastle could spend under PIF with no constraints

In theory, there is effectively no limit to how much of the Public Investment Fund’s £726bn reserves could be funnelled into Newcastle.

The Saudis’ spending on their own domestic leagues as well as their soon-to-be-confirmed victorious bid to host the 2030 World Cup shows that money is no object when it comes to sports investment.

Of course, if the Premier League’s spending curbs were abolished, it would mean every other owner in the Premier League would be allowed to spend whatever they liked too.

But no one, not even City’s Abu Dhabi owners, come close to matching the potential spending power of Mohamed Bin Salman and the Saudi Public Investment Fund.