Newcastle United owners report £8.5bn loss after sports investment gamble

Newcastle United’s owners, Saudi Arabia’s Public Investment Fund, reported $11 billion in losses in 2022, according to Bloomberg.

After making a $19 billion profit in 2021, even after the £305 million purchase of Newcastle, the wealth fund set in motion a flurry of sports investments as the global markets faced significant blows.

At the end of 2022, PIF’s assets stood around $778 billion.

2022 was the year it launched its Sports Investment Company, the arm of PIF which set up the LIV Golf tour and will now oversee the historic merger between the tour and the established PGA Tour. Yesterday it was revealed PIF invested over $1 billion in the merger in order to see an agreement reached.

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Its accelerated investments this year has exposed PIF’s desire to take over the sports world: buying 75% stakes in the top four Saudi Pro League teams, merging with the PGA Tour and chasing stakes in both F1 and tennis.

None of these moves come cheaply either. After financing Cristiano Ronaldo’s move to Al Nassr at the beginning of year, PIF have given the green light to their Saudi clubs to target some of Europe’s best footballers with offers that aren’t restricted by Financial Fair Play. Karim Benzema is set to be paid 100 million euros per season.

It’ll take a while before the wealth fund starts getting significant returns on its new, expensive ventures. In 2022, Newcastle reported losses of £70.7 million because of PIF’s drive to invest in the squad post-takeover.

But PIF’s sports investments might not be to blame. The global markets experienced the worst year since 2008.

And even after $11 bn in losses, Newcastle United remain the richest club in the Premier League.