Reuben Brothers seal new deal that could spark £80m Newcastle payoff

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The Reuben Brothers are the junior partner to the Saudi Public Investment Fund at Newcastle United, but they still exert considerable influence.

After purchasing a chunk of Amanda Staveley and Mehrdad Ghodoussi’s Newcastle shares following their exit from the boardroom last month, the Reuben Brothers now control 15 per cent of the club.

And while their wealth pales in comparison to PIF‘s – as does nearly every private company in the world – the Reuben Brothers’ net worth is still an enormous £25bn.

On paper, that makes them the second-richest owners in the Premier League, behind only PIF.

Of course, that is an oversimplification, but it does provide some insight into just how wealthy and influential David and Simon Reuben are.

Now, the real estate and technology entrepreneurs have struck a brand new deal that could benefit Newcastle and their quest to spend big under PSR.

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Reubens Brothers investment can help boost Newcastle’s commercial income

Under the Premier League’s Profit and Sustainability Rules, Newcastle are allowed to lose a maximum of £105m over a rolling three-year period.

They flirted with the very upper limit of that threshold for the period up until 30th June 2024, creeping in under it thanks to the begrudging sales of youngsters Yankuba Minteh and Elliott Anderson.

CEO Darren Eales has said Newcastle will always spend the very most they are allowed to under PSR, which means that they need to raise revenue in order to lift their spending ceiling.

Commercial income is one area in which they have had big success in under PIF, with revenue from sponsorship, merchandise and events nearly doubling compared to the Mike Ashley era.

When they release their accounts for 2023-24, Newcastle are expected to post £80m commercial income.

The club’s content strategy is encompassed in this category – and the fact that Man City attribute much of their commercial success to their content strategy illustrates how important this strand is.

Newcastle are currently in the process of hiring a new head of content, who will oversee this department, curating behind-the-scenes videos, promotions and more.

And as reported by Bloomberg, the Reuben Brothers have just sealed a deal to acquire the media studio EDGLRD.

The studio is run by American producer Harmony Korine and the funds from the Reuben Brothers will go towards creating content in the form of “movies, video games, advertising, interactive content, social media, music, fashion, hospitality and sports.”

And it seems likely that there will be some collaboration with Newcastle, whose content centred on the new Adidas kit deal ahead of 2024-25 has been a wild success.

How much can Newcastle spend under PSR?

As acknowledged by Eales at a recent press briefing, the fact that Newcastle’s £70m loss in 2021-22 is now no longer part of their PSR calculation does give them some grace.

However, the Magpies still do not have a huge amount of headroom, especially given that it appears that they will not sell any of their biggest stars this summer.

It could be the case that Newcastle are waiting until January, when they will be able to better assess their financial outlook for the campaign before they sell players.

The fact that any new signings they make will be amortised over five years whereas received fees are registered upfront could also give them some breathing space.

But that does not make new signings a free hit – they will still need to bear their cost over the next four seasons, placing strain on Newcastle’s future PSR position.