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The Economics of English Football

  • Writer: Amer Loubani
    Amer Loubani
  • Oct 22, 2021
  • 4 min read


Even at 3-1 and soon after 3-2 down to Tottenham Hotspur, the Newcastle home crowd were still more animated than at any time they'd been winning games so far this season (which wasn't often). Other than an unfortunate crowd incident with a fan suffering cardiac arrest (he is now stable and well), nothing could dilute the optimism of a club and fanbase recently acquired by the sovereign wealth fund of Saudi Arabia, the PIF. The acquisition, other than putting an end to the miserable reign of Mike Ashley at St James' park, has brought the alleged "sportswashing" practice of states buying football clubs to change their image abroad back into the spotlight. This is not exactly a novel concept anymore, which makes the added outrage curious, to say the least. All of NUFC's colleagues in the premier league (including Russian owned Chelsea and Abu-Dhabi owned Manchester City) found themselves united in a 19-team strong condemnation of the takeover. In their defence, the Saudi Public Investment Fund (or PIF) is ranked one of the least transparent sovereign wealth funds in the world. No one actually knows where the fund invests its wealth, and a shady relationship with the Saudi state put the deal at extreme risk until the gulf country settled a Premier League coverage piracy dispute with its neighbour, Qatar. In this blog, I will cover whether this takeover really is something different, or whether the premier league is simply open for any sort of business like it has been in days past.


Binding Assurances

Given the uproar, and subsequent litigation, that took place after the PIF engaged in the sale, the Premier League felt compelled to act if the purchase bid was to succeed. What resulted from this intervention was a vague promise, indicating "legally binding assurances" had been struck to ensure the Saudi state would not directly control the football club. What these assurances actually entail is unknown to the public, but the fact it exists when no other English club to have fallen under foreign ownership had been subjected to the same terms is interesting. Unfortunately, I think the footballing body is looking at things the wrong way round. Rather than seeking to keep state hands off football teams rooted in English culture after dubious sales take place, it should develop an ownership model where complete takeovers by offshore state-related parties are regulated (the 51-49 model in Germany springs to mind). The consequences to league competitiveness is another matter, we already observe the complete dominance in the German Bundesliga of Bayern Munch - regardless of ownership and control restrictions. A formula must be found to mix entertainment with money.


It's no secret money creates good teams, and good teams create good competition. The issue, however, is that the Premier League has relinquished almost all control in the process of acquiring such investment. The failed European Super League project is a case in point. Regardless of whether it was consulted or not, the fact the PL held no meaningful power whatsoever to impact the direction of travel is a massive issue for domestic footballing structures. Action (possibly state-sanctioned) must be taken to address the private-public balance in English football.


The Washing in Sportwashing

Through all the talk of states using football to clean their images, I was interested in discovering whether the theory actually takes hold in the real world. I, for one, have never looked at a football club's owners and found the nation-state they represent enhanced reputationally in my thinking. What I do think acquisitions of this nature do for a country is bring it into the international conversation at yet another level. A small Emirate in the gulf wielding influence on stages as far away as the USA - through New York City FC (NYCFC), which it owns - and the UK through powerhouse Manchester City FC is an incredible feat, and I have a suspicion influence is what these nations aimed to gain from transactions like this to begin with. My searching ended in split opinion over whether the sportwashing practice actually works, one report even detailed how NYCFC perceived its business moves to be restricted by the reputation of its owners (this article is listed under sources). In the club's search for a stadium, NYCFC's holding company allegedly considered a strategy to distance itself from Abu Dhabi in order to secure permission to build a stadium in Queens (and dodge questions on the UAE's human rights record at the same time).


It's an interesting discussion, but I think the jury is still out on whether owning a successful western football club actually boosts your image abroad. Besides, Roman Abramovic (allegedly associated with Putin and the Russian state - he denies this) bought Chelsea 18 years ago, and Russia is still no closer to or better regarded by its western adversaries today.


The Season From Here

Other than uniting in condemnation, the rest of the Premier League has also instituted a freeze on sponsorship deals with entities linked to club owners. Unsurprisingly, Manchester City abstained - having been accused and punished by the European footballing authorities for doing this exact thing last year. Although some may think this is a new stance on human rights issues, I think it shows the richest English clubs aren't keen to make room at the top. For now, the rest of the competition is united under the guise of applying justice, but it's doubtful that unity will last.


Author: My name is Amer, I'm a Computer Science with Business graduate currently working in tech consulting. My thoughts in this blog are based on my opinions regarding the regulation of ownership in football, rather than concrete proposals based on research. Feel free to reach out to me via LinkedIn (on the about page) if you have any questions.


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