Both the Premier League and Uefa will have to approve Newcastle United’s prospective £25m shirt deal with Sela, an events company whose website says it is similarly owned by the club’s primary owners Public Investment Fund [PIF], in a first major test of the competition’s new rules on sponsorship that were introduced after the takeover.
It is understood that senior football executives are even questioning whether the regulations adequately cover the situation, given that the club's sponsors would ultimately have the same owners.
In light of news of the deal, human rights group FairSquare have warned the Premier League to be mindful of the ability of “autocratic states” to “easily disguise the source of funding”. Given that Newcastle United have qualified for the Champions League, the sponsorship would also have to be tested by Uefa.
The club’s deal with gambling firm Fun888 expires this summer and the St James’ Park hierarchy are currently in talks with Sela, to the extent that the Premier League have been contacted.
While there is understood to be sound advice that the deal represents fair market value given the Champions League qualification, the question from some executives in the game is whether the new regulations are as relevant in this case given they concern the same ownership.
PIF purchased 80 per cent of the club in the controversial 2021 takeover, and Financial Fair Play rules currently constrain owner funding, with clubs allowed losses to a maximum of €30m over a three-year monitoring period so long as €25m of that loss is covered by the owner via an equity purchase.
The other 18 non-state-owned clubs raised concerns to the Premier League regarding such issues in the wake of the takeover, out of fear that they could be outstripped by inflated sponsorship deals from companies in autocratic states such as Saudi Arabia.
Covered from page 132 in the Premier League handbook, the new rules state that “each Associated Party Transaction must be submitted to the Board (in such form and including such detail as required by the Board) in order for the Board to conduct a Fair Market Value Assessment of it”.
Independent experts also assess any prospective deals.
“States don't operate by the same rules as businesses and autocratic states often dispense with rules altogether,” FairSquare, a human rights group, said in a statement to The Independent.
“Their ability to easily disguise the source of funding, either for the purchase of clubs or to inject money into their club via nominally independent third parties is a further reason why they shouldn't be involved in club ownership."
Sela are an event management agency described as “the first official athlete representation in the [Gulf] region”, with its own website reading “owned by Public Investment Fund”.
The company was founded by Dr Rakan Al-Harthy, who is also named as a director of Qiddiya, an entertainment project similarly owned by PIF. Newcastle chairman Yasir Al-Rumayyan also sits on the Qiddiya board, which is chaired by Crown Prince Mohammed bin Salman.
The Qidiya website reads: "Dr Rakan Al-Harthy is the founder and managing director of Sela Company. He also serves on the boards of several other companies, including the Event Investment Fund and Qiddiya Investment Company.
“An entrepreneur and innovator, Dr Al-Harthy founded Sela Company (originally known as Sela Sports) nearly 25 years ago and has headed its strategic development. Through joint efforts between government entities and the private sector, Sela participated in the growth of multi-recreational industries.”
Newcastle United have been approached for comment. The Premier League has declined to comment.