War of words as Newcastle claim $100m bid has changed
Robert Dillon
February 21, 2011
NEWCASTLE officials and Nathan Tinkler were at loggerheads last night as they prepared for a showdown today that will determine if the billionaire abandons his plans to privatise the club.
Read the statement from the Tinkler Sports Group
Read the statement from the Newcastle Knights' board
In an apparent response to suggestions by the Tinkler Sports Group on Friday that the Knights had been tardy in taking a $100 million, 10-year proposal to their members for ratification, the club issued a press release yesterday to reveal there were ''key commercial elements which we still need to be satisfied on''.
In the statement, Knights chairman Rob Tew said he was confident both parties could ''successfully negotiate the outstanding issues'' at today's summit.
But Tew then detailed the Knights' belief that fundamental aspects of Tinkler's takeover bid had changed since it was tabled on January 17.
After giving in-principle endorsement on January 19 to Tinkler's offer, Tew said three components of the deal had since been altered.
Tew said ''the first and overriding issue'' was that the offer, as it stood, ''represents a significant departure from the $100 million proposal guaranteed to be paid over 10 years that was announced by The Tinkler Group last month''.
He said: ''The present offer does not commit to a 10-year period. The offer of guarantee at present is for a period of two years, and does not commence until March 31, 2012.''
He said TSG wanted to calculate all revenue, including ticketing and membership, in its definition of ''sponsorship income''.
''On that basis, the total is already as high as $10 million, and therefore the contribution by the Tinkler Group would be zero,'' Tew said.
He said there was no guarantee if TSG sold the Knights within 10 years that the new buyer would commit to the same level of funding.
The Knights insist the members should be given a ''stated buy-back sum at the outset of the agreement'' or be empowered to ''enforce the obligations of the guarantee and other conditions upon an incoming purchaser for the remainder of the 10 years''.
Tew also alleged that TSG had ''removed the commitment to junior development from the documentation'', and the club would require ''an iron-clad commitment guaranteeing a minimum expenditure''.
TSG executive chairman Ken Edwards said the Knights had either misinterpreted Tinkler's offer or were ''being mischievous, at best''.
''To suggest that it's not a 10-year offer, or it's not $100 million in sponsorship and hospitality commitments is totally wrong and refuted, in the strongest possible terms,'' Edwards said last night.
''We're bemused
they clearly haven't understood the documents or are being mischievous in some sort of negotiating ploy. But we strongly deny that the offer we've documented isn't consistent with our previous offer. It is wrong to say we have moved the goalposts.''
Edwards conceded there were ''risk scenarios'' in the proposal but they were ''hypothetical''.
''They are things that are unlikely to happen that might mean the club isn't held by the Tinkler Group for 10 years,'' he said. ''For example, what happens if the Tinkler Group goes into liquidation? The Tinkler Group isn't going to go into liquidation, but if it did, it's a technical argument that is mischievous at best.''
Edwards reiterated that if Tinkler was not satisfied by today's meeting, and given a date at which members could vote on his proposal, he would abandon any further negotiations.
''It's not a line in the sand,'' Edwards said. ''We've made it very clear to them that a deal either gets done tomorrow or it doesn't
our offer expires tomorrow if we can't reach a deal. Then it's up to members to either support the current board or for members to move against them with a vote of no-confidence.''
Asked whether he expected a tense atmosphere at today's summit, Knights chief executive Steve Burraston replied: ''Certainly not from our point of view.
''We're still starting to work towards a final conclusion
I'm not aware of any ultimatum or being summonsed to a meeting or whatever has been reported.
''This meeting was always scheduled, and all our meetings have been amicable to date, and hopefully they will continue that way.
''The important thing is the members have all the information documented so they can consider it because it is a critical decision - the most important decision made in our club's history. It's a very complex issue, and it's very important that we don't rush it.''
Edwards disagreed. ''Clearly there is tension [between the two parties],'' he said. ''There is no question about that, and that's unfortunate.
''But, at the end of the day, the objective that both parties need to keep in mind is getting the best possible outcome for Newcastle, northern NSW and the Knights.''
