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.
Since then, Sela has managed over 15 million attendees at sports and non-sporting events.
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.
Wednesday, the value of the agreement being negotiated with Sela was unknown.