Getty Images
- Securitisation of Newcastle’s commercial revenue is also under consideration
- Club CEO aiming to raise revenues by UK£100m
- LIV Golf targeting US$250m in new funding to plug gap left by PIF’s exit
Saudi Arabia’s Public Investment Fund (PIF) is in discussions to sell a minority stake in Newcastle United, according to Reuters.
The sovereign wealth fund has owned Newcastle since 2021 and is currently debating whether to expand St James’ Park or build a new city centre venue. To raise funds for either venture, PIF is considering issuing new shares to an external investor.
Reuters reports that another option under consideration is to use future commercial revenue as security for a loan. The Magpies generated a club record of UK£335.3 million (US$449.5 million) in revenue last year, which included a 44 per cent increase in commercial income to UK£120.1 million (US$161 million).
A renovation of St James’s Park would cost hundreds of millions of pounds, while a new stadium would require over UK£1 billion (US$1.34 billion) in financing. The club is also building an expanded training facility that has cost millions of pounds.
Greater matchday income from an expanded stadium is seen as crucial if Newcastle are to achieve their ambition of regularly challenging for the Uefa Champions League and Premier League by 2030. This will require further investment in their playing squad, which will be made easier by the introduction of a new squad cost ratio (SCR) system for next season.
Speaking at SportsPro London last month, Newcastle chief executive David Hopkinson acknowledged that resolving the future of St James’ Park was a priority issue during recent meetings with the PIF, with “more [stadium] capacity to drive revenue”.
He has set a target of increasing the team’s revenue by more than UK£100 million (US$134.1 million), by raising more income in areas such as matchday, sponsorship and merchandise.
“If we execute superbly, there might be UK£100 million in annual run-rate revenue that could be unlocked,” Hopkinson said. “Our revenue is worth about UK£400 million, that could become UK£500 million and stretched further to UK£550 million.
“Then we’d enter the conversation [of competing at the top]. That’s our ambition and it’s our job now to go unlock this [income].”
Hopkinson’s strategy to deliver more revenue for Newcastle comes as the PIF reevaluates its investment strategy. While it remains committed to the Premier League club, it has however decided to scale back funding commitments in other sports such as tennis and snooker.
Most notably, the sovereign wealth fund plans to withdraw its financial support for LIV Golf at the end of the ongoing 2026 campaign. It has invested heavily in LIV, spending more than US$5.3 billion on operating the breakaway golf circuit since it launched in 2021 and currently spends US$100 million a month to fund the venture’s ongoing operations.
LIV is now in search of new investors, with investment bank Ducera Partners appointed to lead the process. A report from Axios now suggests it will target raising up to US$250 million from new backers, with the full amount projected to help the competition reach profitability within around 20 months.
Should it raise US$100 million less than its target, the circuit will focus on banking more funds through selling its teams, as well as securing a more lucrative media rights deal. Axios reports LIV needs to secure its new investment by the start of October, and will consider seeking bridge financing if it fails to do so.
Combining richer content, in-depth data and exclusive community benefits, SportsPro+ is your VIP pass into the global sports industry. Discover more here.