Speculative capitalism meets authoritarianism
Having first become a significant issue at the start of the year, hysteria and concern about it grew as the year progressed. Just when it appeared as though the situation was under control, a troubling new cluster of associated problems would emerge. Numerous times, members of the public were told that a positive solution was imminent. Several members of the media often reported good news stories. Normality would apparently soon return, even if it was going to be a new normality.
But this was not Covid-19, instead it was the kitchen sink drama of the Saudi Arabian government’s attempts to acquire Premier League football club Newcastle United. Although rumours of a Gulf takeover at the club actually dated back to 2017, a concrete Saudi approach for United only emerged in late January this year. In January, an enthusiastic intermediary spoke optimistically of their hopes that a deal would be quickly struck. Some media outlets even carried reports of a deal being completed within seventy-two hours. This didn’t happen.
Instead, what seemingly began as the relatively small matter of a football club sale eventually grew into something much bigger. Its consequences not only spread among Newcastle fans, but also across the pages of the media and among football fans in general. Before long, organisations ranging from the Premier League to the World Trade Organisation got caught in the grip of this outbreak. What many thought would be an issue that was quickly addressed, eventually spilled over into six months (and was still ongoing at the time of writing).
There was an early chance to catch the spread of this matter when the Premier League got the opportunity to apply its Owners and Directors Test (ODT) to the proposed acquisition of United by Saudi Arabia’s Public Investment Fund (the country’s sovereign wealth fund). Taken at face value, there appeared to be nothing in the test that would stop the deal being waved through.
However just as Covid-19 has proved, something that initially appears to be relatively innocuous can often lead to something much, much bigger and more problematic. And so it proved to be as well in the case of United and Saudi Arabia. The ODT’s provisions are designed to account for any illegality in which a prospective owner is involved. Indeed, this can provide the grounds for someone failing the test and their proposed acquisition of a club being rejected.
In this case, all manner of crimes and misdemeanours came to the fore, ranging from the murder of Jamal Khashoggi in Istanbul in late 2018 and ongoing concerns about human rights abuses, through to Saudi Arabia’s pirating of sports television coverage (via an organisation called BeoutQ) belonging to Qatari broadcaster BeIN. It was the latter in particular that appeared to incubate even more problems for the kingdom.
Throughout May, talk of the takeover spread rapidly across social media, initially transmitted by United fans anxious to see their club pass into the hands of new owners. However as late spring started to become early summer, Saudi Arabian trolls escalated the sharing of stories about delays to the Premier League club’s sale. Often these were targeted attacks, Qatar often being the focus, although individuals suspected of blocking or diminishing the deal (which included some respected journalists) also got caught up in the matter.
By late May, the World Trade Organisation had ruled that the Saudi Arabian pirating of BeIN’s content was proven and that the kingdom had been obstructive in Qatar’s attempt to chase down the wrongdoers. Once made, the judgement effectively sealed the fate of Riyadh’s bid to take control of Newcastle United. In July, the Premier League confirmed that the bid had failed the ODT and would not be permitted to proceed.
There had already been some super spreading of toxic content on social media, which intensified once the bid was rejected. But it wasn’t just Gulf region trolls, considerable numbers of Newcastle United fans were also involved too many of whom were abusive. Other fans started a petition calling for the British government to investigate the Premier League’s handling of the takeover.
This was somewhat ironic, as at the same time the British government’s handling of the pandemic has frequently been the focus for a large number of petitions generated by the general public. It was equally ironic that, just as the British government has unconvincingly dealt with the effects of Covid-19, it’s engagement with the Newcastle takeover was also unconvincing. In public, Downing Street vowed to stay out of the matter; privately, members of Boris Johnson’s government were all over the matter, concerned that antagonising Saudi Arabia could be detrimental to Britain’s economic interests.
Constant British government intervention behind the scenes was one reason why it took so long for the Premier League to rule on the United takeover – months rather than what would normally be weeks! However, the Saudi Arabian government persistently added to the viral mix of communications being transmitted from Riyadh. In addition to the trolls, the kingdom’s feverishness led to the country appealing the WTO’s ruling on BeoutQ even though it had earlier claimed victory in the case.
To most, Saudi Arabia thus appeared irrational, petulant and bellicose in its stance on the proposed acquisition of Newcastle United. Rather than re-branding and re-positioning a country with a tarnished global reputation, throughout the takeover period its authoritarian rulers often seemed massively out of kilter with public attitudes and perceptions.
This begs the question of who in the first place suggested to the kingdom that a bid for Newcastle United would be successful. It is likely that an intermediary over-played their hand in selling the idea to officials in Riyadh. Speculative capitalism is prone to making promises that it can’t then keep. In this case, it seems that due diligence had been sacrificed in favour of an avaricious financial pursuit.
Just as the outbreak of Covid-19 seems to have been the result of two entities mysteriously engaging in an unfortunate relationship, so an authoritarian government from the Gulf and a speculative intermediary together took a punt on buying Newcastle United. In both cases, matters not only spiralled out of control but were also hugely damaging. The remedy for Covid-19 seems clear, but what will help guard against such fractious football takeovers happening again remains to be seen.
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