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Saudi influence in Newcastle: A story of property, prosperity and power

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Newcastle is undergoing significant changes. This transformation is not only taking place on the football pitch, with the club’s resurgence from a low point to competing in the Champions League, but also within the city itself. Investments in infrastructure, developments, and urban regeneration projects are reshaping Newcastle and its future.

Two years ago, a takeover led by Saudi Arabia’s Public Investment Fund (PIF) acquired 80 percent of Newcastle United, with the remaining stakes split between Amanda Staveley and the Reuben family. Staveley emphasized that this move was an investment rather than sportswashing, addressing concerns about Saudi Arabia’s human rights record. In Newcastle, the new ownership has been a welcome change for a city facing economic and social challenges.

The city of Newcastle has faced austerity measures, with significant cuts in public spending, low life expectancy, child poverty, and unemployment rates higher than the national average. Deindustrialization has left parts of the city in a state of decline, with traditional industries such as coal, shipbuilding, and steel dwindling.

The Manchester City takeover by the Abu Dhabi United Group (ADUG) in 2008 serves as a precedent. ADUG, with links to the UAE government, invested in impoverished areas of east Manchester, aiming to build affordable housing and revitalize abandoned brownfield sites. While these developments have brought economic benefits to the city, there have been concerns about potential exploitation and lack of income for the local council.

Newcastle finds itself at a similar crossroads, with its ownership pledging to contribute to the city’s regeneration. However, the lessons from Manchester highlight the importance of careful scrutiny of such investments, especially when they are linked to human rights concerns. Newcastle’s future will be shaped by these developments, and it remains a city in transition.

“The past we inherit, the future we build” is the motto of the National Union of Mineworkers, symbolizing the region’s history and the challenges it faces. This story explores the ongoing changes in Newcastle, including the Reuben family’s investments and Saudi Arabia’s long-term strategy, as the city continues to evolve and rebuild.

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1. The Reubens

The iconic Sports Direct signs are being removed, but this time, it’s not from the front of St James’ Park as seen during the takeover process. Instead, the signs are coming down from the stores in central Newcastle.

The Reuben family, who acquired Monument Mall in 2021, is preparing to open a rooftop bar with a view of the stadium. As part of this transformation, Mike Ashley’s Sports Direct brand is being evicted from the site. Although Sports Direct will relocate to Northumberland Street nearby, the move carries significant symbolic weight.

Newcastle

The Reuben family’s connection to Newcastle goes back well before their acquisition of a 10% stake in the football club as part of the takeover.

Brothers David and Simon Reuben, who still oversee the family’s business interests (with Jamie Reuben being David’s son), made significant purchases in the city in 2011. They acquired several properties on Pilgrim Street, including the old police station, the art deco building Carliol House, and multiple office spaces. Pilgrim Street, located just north of the Tyne Bridge and once part of the A1, is a vital thoroughfare in Newcastle that had suffered neglect over the years.

The Reuben brothers have envisioned a comprehensive revitalization of this area, highlighted by the construction of a large new office building for HMRC named Pilgrim’s Quarter. In addition to these developments, they also own substantial portions of prime locations in Newcastle, including Monument Mall, the Central Arcade near Grey’s Monument, and the Newcastle racecourse to the north of the city. This is all in addition to their stake in St. James’ Park, the iconic football stadium of Newcastle United.

The Reubens own Central Arcade (Photo: Jacob Whitehead)

The Reuben brothers have openly acknowledged the connection between their investment in the football club and the city of Newcastle. After the takeover, Jamie Reuben emphasized their commitment to building a true community club and working closely with Newcastle City Council to foster long-term sustainable growth for the area.

According to Land Registry records, the Reuben brothers own a minimum of 21 properties in Newcastle’s city center through companies registered in the British Virgin Islands. However, the football club’s ownership has a history of involvement in property development.

Sir John Hall, who became the majority owner of Newcastle United in 1992, was a prominent property magnate. He was behind the construction of the Gateshead MetroCentre in the 1980s, a significant effort to stimulate the city’s economy. During his ownership, the “Entertainers” era under Kevin Keegan contributed to enhancing Newcastle’s image as a tourism and nightlife destination.

Alex Niven, an academic, Newcastle fan, and author, points out that the aftermath of de-industrialization is a central factor in the recent history of both the club and the city. Sir John Hall’s attempt at regeneration was one early effort, symbolized by the MetroCentre’s rise amid post-industrial challenges. However, the current ownership, with its Saudi backing, represents a much larger-scale endeavor to regenerate the city after de-industrialization.

Hall, who understands the synergy between football club ownership and city development, has praised the Reubens’ development capabilities. He sees a similar spirit in the city now to what existed during the rejuvenation of the 1990s. Like the Reubens, he owned both the football club and substantial city properties, recognizing how they can complement each other in shaping the city’s future.

Ongoing building work at a Reuben family property on Pilgrim Street (Photo: Jacob Whitehead)

While the Reuben brothers have received praise for their development efforts in Newcastle, there have also been criticisms. Some people are frustrated with the pace of certain aspects of the development, and there have been delays in initiating building work on Pilgrim Street, which only began in early 2022, following the takeover.

On the other hand, proponents argue that large-scale construction projects require time, especially when faced with planning objections and complexities. Ged Bell, who was the council’s cabinet member for employment and investment at the time, described the Pilgrim Street redevelopment as one of the most significant city-center regeneration opportunities in northern England.

However, the timing of these developments in relation to the ownership takeover does raise questions. Local business leaders, speaking anonymously to protect their relationships, believe that there might be Saudi investment involved in these upcoming projects. As will be explored further, Newcastle United is not the only area in the North East where Saudi investments are making an impact.


2. From the Middle East to the North East

Immediately after the takeover, representatives from the Public Investment Fund (PIF) traveled to the North East to meet with several club legends. During these meetings, various topics were discussed, including potential ambassadorial roles for the legends. However, the discussions went beyond football, and advice was sought on where PIF should prioritize its investments in the city. Suggestions ranged from hotels to shops to housing.

The underlying message was clear: PIF’s intentions were not limited to injecting money into Newcastle United alone but extended to benefiting the broader Newcastle city and the region as a whole.

Simon Chadwick, a professor of sport and geopolitical economy at SKEMA Business School, emphasizes that the example set by Abu Dhabi demonstrates that investment in a football club encompasses more than just football. It involves civic engagement and infrastructural development. Chadwick believes that PIF will serve as a channel for other Saudi Arabian investments, not only in Newcastle but also in the broader North East region.

This broader investment strategy is already taking shape. Following Newcastle’s 2-0 victory over Arsenal in May 2022, then-director Majed Al-Sorour shared a video on LinkedIn, capturing the celebrations from the owners’ box. In the comments section, there were numerous notes of congratulations, with one commenter noting the positive impact of investment in the North East. Al-Sorour responded by indicating that the focus would soon shift to improving the city and the surrounding area together.

In a video capturing celebrations following Newcastle United’s victory over Arsenal in May 2022, two additional figures are visible in the owners’ box. One of them is Prince Khalid bin Bandar Al Saud, the Saudi ambassador to the UK, waving a Newcastle flag. Seated next to him is his wife, Lucy Cuthbert, a member of the influential Percy family and the niece of the Duke of Northumberland. This union between the House of Saud and the House of Percy, a prominent North East aristocratic family, highlights the growing connection between Saudi Arabia and the region’s political elite.

The Percy family possesses extensive land holdings, including approximately eight percent of Northumberland, as well as properties in London and Tyneside. Alnwick Castle, part of the Percy family’s heritage, serves as the venue for Newcastle United board meetings and famously stood in as Hogwarts for the first two Harry Potter films.

Prince Khalid’s passion for investing in the North East and his understanding of Geordie humor have been noted in meetings. Sources have emphasized his desire for tangible results from these investments.

George Percy, the heir to the Duke of Northumberland, has a background in Arabic studies and has worked in the Middle East, particularly focusing on renewable energy—a crucial area of investment for the Saudi government, which the North East region is well-positioned to support.

The region’s historical relationship with the Middle East has seen parallel trajectories of rise and decline. In the 1970s, as British manufacturing and coal mining faced downturns, Saudi Arabia benefited from the oil crisis of that decade, fueling the kingdom’s rapid modernization. Today, Saudi Arabia, under Crown Prince Mohammed bin Salman’s leadership, aims to diversify its economy and reduce its dependence on oil. This shift includes significant international investments in regions such as London.

Renewable energy is a key focus of Saudi Arabia’s economic diversification strategy, and the North East is seen as a potential partner in this endeavor. British leaders have actively sought Saudi investments in renewable energy projects, such as sustainable aviation fuel production in Teesside. Additionally, Saudi Arabia aims to generate half of its electricity from renewable sources by 2030, aligning with the UK’s goals for a greener future.

In light of these economic and strategic considerations, it becomes evident why the British government closely monitored the Newcastle takeover process, as it had implications for the UK’s relationship with Saudi Arabia. The government, however, has consistently denied involvement or attempts to influence the takeover.

Newcastle’s Saudi takeover: The UK government’s emails revealed

The Saudi-led takeover of Newcastle United has ushered in a wave of investment and economic opportunities for the city and the broader North East region of England. With a focus on diversifying Saudi Arabia’s economy, the new ownership sees Newcastle as a strategic hub for various investments and initiatives.

The North East region’s potential as an alternative energy capital aligns with Saudi Arabia’s priorities in renewable and sustainable energy sources. The presence of Newcastle United, along with Saudi Aramco and SABIC, positions the region as an attractive destination for energy-related investments.

A devolution deal between Newcastle and the government, valued at £1.4 billion, aims to create jobs and leverage private sector investment. The North East Economic Forum (NEEF) has initiated the Saudi-North East England Trade and Investment Dialogue, fostering connections between regional leaders and international investors, including those from Saudi Arabia.

The Newcastle takeover has heightened awareness of the North East in Saudi business circles, prompting discussions on potential investments. Initiatives such as direct flights between Newcastle International Airport and Saudi Arabia, investment in the health economy, automotive industry, wind energy, digital sector, and educational institutions are under consideration. There are also plans for a small modular nuclear reactor (SMR) construction project during the early 2030s.

The involvement of the Reuben brothers, experienced developers, adds expertise to the region’s regeneration efforts. Amanda Staveley’s connections with both the Saudi owners and the Reubens facilitate collaboration and investment opportunities.

The ownership triumvirate—Saudi Arabia’s Public Investment Fund, the Reuben brothers, and Amanda Staveley—aims to leverage their 10 percent ownership stake in Newcastle United to explore broader investment opportunities across Tyneside and the North East.


3. Manchester — model or moral?

Amanda Staveley’s involvement in the takeover of Newcastle United is not her first experience in such a venture. In 2008, she played a significant role in the takeover of Manchester City by Abu Dhabi United Group (ADUG).

Over the subsequent decade, as Manchester City achieved on-field success, ADUG invested heavily in Manchester, particularly through a substantial property portfolio. This approach bears some similarities to the Newcastle takeover, where the football club serves as a gateway to foreign investment.

In 2013, the UK government assembled a team known as Project Falcon, aiming to encourage the UAE to invest in the UK. Freedom of Information requests revealed close ties between ADUG and these talks. The result of these efforts was that Manchester now receives a substantial amount of foreign direct investment (FDI), second only to London in the UK.

One notable project stemming from this partnership was Manchester Life, a joint venture equally owned by ADUG and Manchester City Council. The concept was straightforward: the council would provide publicly owned brownfield sites for redevelopment, with ADUG financing affordable housing. However, questions have arisen about the deal’s fairness and transparency.

Critics argue that the council did not receive a fair financial return from the project and that it failed to meet standard affordable housing requirements. Reports also suggest that land was sold to ADUG at a price well below market value, with unusually long 999-year leases granted, whereas typical leases are much shorter.

A report titled “Manchester Offshored” by academics from the Urban Institute criticized the transfer of public wealth to private hands, describing it as “difficult to justify as prudent.” Manchester City Council defended the deal, stating that independent experts had valued the land and that it was a long-term arrangement that would eventually benefit the council financially.

The purchase of Manchester City appears to have been a catalyst for significant investment in the city, given the location of the land around the Etihad Stadium, although opinions on this premise vary.

While some argue that the UAE did not need to buy Manchester City to invest in the surrounding areas, Manchester has consistently welcomed investment, making it attractive for various stakeholders. The parallels between the UAE’s investment in Manchester and potential Saudi Arabian investments in Newcastle are evident, and Newcastle City Council has viewed Manchester’s redevelopment around the Etihad Stadium as a positive model.

Foreign direct investment (FDI) in the North East has grown from £16.2 billion to £24.5 billion between 2015 and 2020, although it still lags behind the North West’s £73.9 billion. Saudi investment represents an opportunity for the region, but there are also potential risks, as seen in the Manchester Life scheme.

Jonathan Silver, a senior research fellow at the University of Sheffield and co-author of “Manchester Offshored,” notes that the speed of investment in Newcastle could be accelerated due to Manchester serving as a model. However, this acceleration may come with risks, especially if Newcastle is in a desperate position with limited alternatives, potentially leading to unfavorable financing and reputational outcomes.

The foundations for this investment have been laid over two years, with key relationships established among stakeholders. Government intervention, the personal stake of the Saudi ambassador, organizations fostering Saudi-North East business relationships, and devolution funds are all in place. Newcastle, which hasn’t seen the same level of urban development as cities like Leeds, Liverpool, or Manchester, may view this as a significant opportunity, but the potential risks and trade-offs should be carefully considered.


4. Newcastle, the ‘what next?’ of the north

Despite concerns about the identity of potential investors, the urgent need for investment in Newcastle is evident, particularly given the city’s high child poverty and unemployment rates. These complex and pressing issues have local significance.

The lack of investment in cities during the 1980s, coupled with more recent austerity measures that severely impacted council budgets, has left a void that any substantial investment is likely to fill. Given the circumstances, Newcastle’s leaders are eager to welcome investors, regardless of their source.

Newcastle United’s ownership is uniquely positioned to drive broader investment in the region. They have the financial resources, motivation, determination, and local knowledge necessary to address these pressing economic and social challenges.

Amanda Staveley, despite being from North Yorkshire rather than the North East, is likely well aware of the region’s economic and social conditions. The region faces issues such as high poverty rates, elevated unemployment levels, and a shortage of business startups.

Amanda Staveley will play an integral role in Newcastle’s future – on and off the pitch (Jacques Feeney/Offside/Offside via Getty Images)

The North East, particularly Newcastle, is viewed as fertile ground for overseas investors to step in and potentially benefit the local population. With a perception that the central government in London has failed the North East, investors such as Japanese companies like Nissan and Gulf investors like the Public Investment Fund (PIF) are seen as potential sources of job creation, wealth generation, and improved socio-cultural conditions for local residents.

Local politicians face a unique challenge in balancing the need to encourage investment with ensuring that the terms of such investments are advantageous for the city. The emotional connection between the football club and the one-club city, as well as the associated political considerations, further complicate the situation.

While some political figures have raised concerns about human rights issues and sportswashing associated with Saudi investment, the prevailing sentiment in the region is that, given the urgent need for regeneration, Newcastle should not be held to stricter standards than other UK cities that have received Gulf investment.

However, it is crucial that the Newcastle investment, following the example of Manchester, receives thorough scrutiny. Newcastle’s vulnerability, given its unique status as the largest one-club city in the UK, makes it especially important to ensure that investments benefit the city and its residents while addressing any concerns related to human rights and other issues.

The pursuit of a regeneration solution has been a long-standing goal, and both the Reuben brothers and Saudi ownership are offering potential solutions. However, the lack of oversight in these investments poses significant risks.

The purchase of Newcastle United by Saudi Arabia’s leadership appears to be more than just an end in itself; it may serve as a key to unlocking economic opportunities in the North East region of the UK. The UAE’s successful ventures in Manchester have likely inspired Saudi Arabia to pursue similar investments in the North East, potentially creating a competitive geopolitical dynamic between the two Gulf states.

Newcastle, like Manchester, can be seen as a node in an international network where Gulf states are vying for European outposts. Qatar’s interest in Manchester United and their existing investments in London further illustrate this trend.

These developments also raise broader questions about the future of the North, as many in the region have felt neglected by a centralized government. International investment and the influence that comes with it have become a natural replacement for addressing economic and infrastructure needs.

The takeover of Newcastle United, and potentially the city itself, represents a stage for reflection on the evolving role of regions like the North in the 21st century, as well as the entanglement of Britain’s economic and defense interests with Gulf states.

The historical context of T. Dan Smith’s efforts to regenerate Newcastle in the 1960s serves as a reminder of the city’s aspirations for a brighter future. In 20 years’ time, what will have replaced Brasilia in Newcastle’s nickname as the “Brasilia of the North” is a question worth pondering.

(Top image: iStock; design: Sam Richardson)

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