'Everything has changed' at Newcastle amid £1bn takeover reveal - Kieran Maguire

It has been almost three years since the Saudi Public Investment Fund took over Newcastle United – and the club is unrecognisable from the outfit Mike Ashley left behind.

As well as the success Eddie Howe has brought on the pitch, the club’s commercial and matchday income is now more befitting of a club of Newcastle‘s stature.

And revenue will need to continue its trajectory if PIF are to have any hope of realising their stratospheric ambitions on Tyneside.

The departure of director and minority shareholder Amanda Staveley from St James’ Park was perhaps the biggest shock of the Saudi era so far.

She herself has admitted that she would preferred to have stayed at the club, and it has now emerged that she is eyeing another Premier League investment in a move that would smart for Newcastle fans.

Based on the original takeover price of £305m, the 5.7 per cent stake Staveley has now sold to the Reuben Brothers would have been worth around £17m.

However, a recent Bloomberg report suggests that she has in fact recouped closer to £60m, which would value the club at £1bn.

How have Newcastle more than trebled their value in less than three year? TBR spoke exclusively to Liverpool University football finance lecturer and Price of Football author Kieran Maguire to find out.

Newcastle want financial stability like the ‘Big Six’ clubs’

It is rare in football for a club’s enterprise value to increase so steeply in such a short period of time.

For context, West Ham were valued at £800m by vice-chair Karren Brady in 2018 and that figure is believed to have stayed almost exactly the same in the years since.

It was a sign of how far things have come at Newcastle that they were disappointed not to finish in a European place in 2023-24.

And, insists Maguire, the Magpies have now established themselves as a Premier League ever-present, leading to their value soaring.

“It’s gone three times the original value,” he said.

“But in terms of the market, everything has changed. Demand now exceeds supply with Premier League clubs – that has been a positive.

“Newcastle have also transitioned from being a club that might get relegated to being a club who, while you can’t say 100 per cent they won’t go down, they are 95 per cent certain.

“When you are looking at a revenue-based multiplier, one of the things you take into consideration is seismic shocks to your revenue base, which could come via relegation.

“Therefore, I don’t, for example, think Brighton would ever be worth more than two times a revenue multiplier. That is the case with a lot of clubs. All they need is one bad season and they go down.

“Newcastle have moved away from that group. Along with Aston Villa, they have created a little subgroup who aren’t quite Big Six but aren’t a million miles off.

• READ MORE NEWCASTLE NEWS: Newcastle issue statement that proves Amanda Staveley was right about £165m issue

PIF deepen Newcastle roots with another North East takeover

When PIF arrived in Newcastle, they immediately signalled their commitment to invest not just in the football club but in the surrounding area.

This is a strategy similar to the sovereign wealth funds of Abu Dhabi and Qatar, both of whom have invested heavily in their clubs’ respective cities, Manchester and Paris.

PIF have already started a regeneration project in Newcastle, and it now appears that they want to further invest in the region’s sport.

As reported by The Times, PIF are believed to be close to buying a Durham-based Hundred cricket franchise.

“The 100 is a form of entertainment that happens to involve cricket balls and bats.

“There is diminishing interest in test cricket, whereas the T20 and The 100 are generating interest and are therefore attracting investors.

“There is an elephant in the room in terms of the Indian Premier League. It doesn’t get the credit it deserves.

“You can understand that appeal to PIF. It is dirt-cheap as an investment. It is buttons as far as they are concerned.

“It also does help tie up the link with the North East they have through Newcastle. They want to make Newcastle United the centrepiece of that.

The truth about Newcastle’s deal with Adidas

When it was first reported that Newcastle would be partnering with Adidas, it was suggested that Newcastle could earn £40m per year from the deal.

That would put them on a par with the likes of Tottenham in terms of kit deal value, and it would mean they earned by the far most of any non-Big Six club.

However, new analysis suggests that the true figure will be far more modest and based mainly on a commission structure as opposed to a PSR-boosting upfront fee.

The deal will still likely be lucrative, especially with three kits having now been released to a positive reception from the Toon Army.

The Magpies are currently on tour in Japan and have used the opportunity to release their new third kit.

“PIF want to get the Newcastle brand into as many people’s mindsets as possible.

“I think the Adidas value is overstated. They won’t overpay for Newcastle in the same way they will pay for Man United or Bayern Munich, their tier-one clubs in international markets.

“Japan won’t move the dial as an individual market. I think PIF are more doing this to support their attempts to try and globalise Newcastle, as opposed to it coming from Adidas themselves.”