Newcastle FC Looks at Options for £1 Billion Stadium Financing

(Bloomberg) -- English football club Newcastle United has begun discussions with lenders about funding a new stadium or the redevelopment of its existing St James’ Park, according to people with knowledge of the matter.

Executives at the Premier League team, which is owned by Saudi Arabia’s sovereign wealth fund and the Reuben Brothers, are talking about the feasibility and cost with a number of institutions, said the people. The financing could total about £1 billion ($1.3 billion) in a part equity and part debt package, depending on the final scope of the project, they added, asking not to be identified.

The talks are at an early stage and may not result in any agreement, one person said. The planning and financing of football stadiums often takes over a decade, with Tottenham Hotspur’s new ground needing about 12 years from conception to completion.

A spokesperson for Newcastle United FC and the Saudi Public Investment Fund declined to comment.

Top-tier football clubs including FC Barcelona and Everton FC are increasingly raising money from private lenders to finance new stadium projects. These are being driven by the changing economics of the game, as transfer fees and player salaries skyrocket, leading teams to aim for luxury hospitality and amenities for more revenue.

Newcastle’s Saudi owners bought the club for £305 million in October 2021 and then spent heavily to strengthen its squad. Within a couple of years, the team was playing in Europe’s prestigious UEFA Champions League.

While the Saudi wealth fund has about $1 trillion under management, it’s been pulling back from investing overseas, instead prioritizing investments at home.

Executives at Newcastle had been hoping to make a decision on whether to go for a new stadium or redevelopment by early 2025, according to a statement on the club’s website last year. Infrastructure debt is exempt from a club’s profit and sustainability calculations, creating an incentive for owners to fund stadium upgrades.

Newcastle is one of the best-supported clubs in England. The St. James’ Park stadium lies in the heart of Newcastle-upon-Tyne, a city in the northeast of the country, and draws average crowds of more than 50,000.

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