The Saudi Arabian national team’s Sela agreement will test new Premier League related-party transaction restrictions.
A Saudi events company is in advanced negotiations to become the new shirt sponsor of Newcastle United FC, a transaction that will test the new Premier League regulations on related party transactions.
Sela, which operates in dozens of countries and has organized sporting events such as the annual Race of Champions, is engaged in extensive negotiations to become the Magpies’ largest commercial partner.
Sela is the top prospect to replace Fun88 as Newcastle prepares for Champions League participation.
Depending on the outcome of the negotiations, an agreement could be announced as early as next month. In time for replica kits to be manufactured before the new season begins in August.
One source cautioned that the talks could still break down.
Sela Sport, created in 1995, was Fifa’s first Saudi athlete representation group.
It has extensive ties to the Saudi men’s national team, which participated in last year’s World Cup in Qatar and stunned eventual champions Argentina by defeating them in the group stage.
Since then, Sela has managed over 15 million attendees at sports and non-sporting events.
Newcastle’s new sponsor, Sela, headquartered in Saudi Arabia, will undoubtedly attract intense scrutiny from the Premier League and rival clubs.
Due to Saudi Arabia’s financial power, other top-flight clubs disputed the PIF’s £305m ownership of the club in 2021.
Gary Hoffman, the former chairman of the Premier League and a respected businessman who helped save Northern Rock during the 2008 financial crisis, resigned as a result of his disagreement with the league’s handling of the transaction.
The Premier League’s current code scrutinises teams’ business connections with affiliated parties to prevent financial advantages.
Under the regulations, transactions must be conducted at “fair market value,” as determined by an impartial third party.
If market prices are off, teams may have to renegotiate.
In footballing terms, Mike Ashley’s acquisition of Newcastle has thus far been an unqualified success.
The club is in third place in the table, one point and one spot behind Manchester United.
Newcastle will return to Europe’s elite club competition after 20 years because Liverpool, in fifth place, cannot pass them.
The Times reported last month that Newcastle had reached a £25 million-per-year shirt sponsorship agreement with a Middle Eastern entity from a country other than Saudi Arabia.
Wednesday, the value of the agreement being negotiated with Sela was unknown.
The Premier League, Newcastle United, and PIF all declined to comment.
