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Newcastle United: The Kingdom Rising?

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There’s an Oct. 18th video doing the rounds on Twitter where Yasir Al-Rumayyan is greeted with thunderous claps by 52,000 odd spectators at St. James Park when he was introduced. For the uninitiated, Yasir Al-Rumayyan is the Governor of the Public Investment Fund, the sovereign wealth fund of the Kingdom of Saudi Arabia and the Chairman of Saudi Aramco who also is now the new chairman of Newcastle United F.C after the takeover.

 

 


The picture above captures the boisterous mood. The claps and welcome could mean expectation of massive changes, a climb to the elite of the league or the elation due to removal of Mike Ashley as Chairman, or maybe all of them. It certainly marks a new chapter in the history of Newcastle United FC.

 

After a tumultuous period, the takeover led by Public Investment Fund or PIF has been accepted and a new script is about to be written. The dust, though, has not settled yet and there is a section continuously after the takeover but that’s another chapter. We at SBI, Barcelona look at the possible changes that can be expected in the club given that the key driver-owners, the PIF, have a big pocket of an estimated $430 billion making them the richest owners in the football industry.

 

The Squad

 

The squad changes would be the first thing on everybody’s mind.  Newcastle’s squad market value was £114.6 in 2016 and it rose to its pinnacle in 2019 when the value was £246.22. The present-day value is given as £220.86 and it currently lies in the 16th position in the market value table. (All the figures are taken from Transfermarkt).

 

 


According to a rough estimate, there is almost a £500 m gap between the average squad market values of the six top teams and Newcastle United. Obviously, plans would have been drawn up by now or are in the final stages and we can surely expect some big changes in this space.

 

Turnover

The second area where increased actions would most likely to be seen is in the club turnover. Turnover of the 2017/18 and 2018/19 seasons have been fairly similar followed by a dip in 2019/20 revenues understandably hit by Covid-19 (Season 2020/21 revenue breakdown is yet to be disclosed till the time of writing).

 

 

 

If we don’t consider the 2019/20 season, then the average attendance at St. James Park in the previous three seasons have been fairly consistent at around 51,000, about 96%-97% occupancy which translates into a similar matchday revenues. The same can be said about the broadcasting revenues. While the matchday revenues might not be seen to effect too much in the near future but broadcasting revenues might be lifted up following a change in team strengths and more stars. That remains to be seen.

 

It is in the commercial revenue area that we can see some heightened action soon enough and it has already raised some temperatures. A comparison between Newcastle United and an average of the top 6 PL club revenues shows the gap.

 

 

 

 

We can expect some immediate high value sponsorship deals to take place in order to increase the commercial revenues. 

However, media reported that recently at an emergency meeting called by the PL clubs, they voted “to impose a temporary freeze on any of them signing commercial and sponsorship deals with businesses that have links to their club's owners” clearly targeting the possibility of commercial deals with Saudi Arabia based companies.  This, however, is certainly not an end to the discussion

 

Social Media

 

Another area where some significant actions will be seen is in the digital space of Newcastle United. Beginning with a possible internal digital transformation and culminating in more exciting content coming out in their social media channels. We have already seen a growth spurt in the total social media followers within a few days

 

 

 

 From 5.125 m cumulative followers pre-takeover recorded in the month of September across the five social media channels to 6.031 m cumulative followers recorded just after takeover, showing a growth of 18%. The most growth has come from TikTok followed by Instagram

 

One can expect a variety of content being released through these channels fueling the growth of followers which would add to their commercial strength. This would be one space to keep an out for

 

Conclusion     

 

These are just some of the key changes expected from the new Newcastle United management but as most takeovers show, there is a lot more work carried out. Who knows maybe even a St. James Park uplift is in the scheme of things! The action has begun and one can only watch out as the changes unfold. One thing is for certain, the fight for Champions League spots have just certainly become more interesting and competitive!

 

PS:  Steve Bruce has left the position of head coach by mutual consent. The drama has begun!

 

Photo source: New Castle United's Twitter account

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