The $10m question: Did the Dragons choose the right buyer?
Andrew Webster31 August 2018 — 12:00am
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Heavy hitters: Keogh with club skipper Paul Gallen, No.1 ticket holder and now Prime Minister Scott Morrison, and former CEO Lyall Gorman in 2016.
Photo: John Veage
The mystery bidder who missed out on part-ownership of St George Illawarra can finally be revealed amid claims he offered $5 million more than
Bruce Gordon’s WIN Corporation, which was ultimately successful in taking a 50 per cent stake in the club.
South Coast entrepreneur
Paul Smith’s Total Sport and Entertainment, which also owns 50 per cent of the Sydney Kings, had been in serious negotiations with the club since October. It is understood TSE offered exactly $10m to the Dragons, clearing their $5.8m of debt with the NRL while leaving plenty in cash reserves to help build the famous club into the powerhouse it should be.
Done deal: The WIN Corporation now owns a 50 per cent stake in the Dragons.
Photo: NRL Photos
Smith also offered the cash-strapped Steelers a $1.25m loan.
When the Gordon family announced in April that it was walking away from two years of negotiations with the Dragons, TSE believed it was in the box seat to buy Illawarra’s 50 per cent stake. Instead, after months of in-fighting between the St George and Illawarra factions, the Dragons enticed the Gordon family back to the table.
While WIN’s successful bid has been hailed as a “win-win” for the Dragons, questions are now being asked about the process that got it there. It has been widely assumed and reported that WIN’s bid was also worth $10m, although that figure has never been confirmed on the record by any of the parties.
There’s a suspicion from TSE the bid was far less. WIN and the Dragons refused to say how much was paid, citing “commercial confidence”.
Maybe more will be revealed when the Dragons’ annual report drops at the end of the year.
The other curious part of the WIN deal was the appointment of Dragons chairman
Brian Johnston as chief executive to replace
Peter Doust, who is retiring at the end of the season. It smacks of “jobs for the boys”. Johnston is a former Dragons player, was the chief executive before Doust took over in 2000 and was, as chairman, on the sub-committee to find Doust’s replacement.
Doust defended Johnston’s shock appointment when the
Herald reported earlier this month that tens of thousands of dollars were paid to a recruitment firm to find a replacement CEO.
Was the WIN deal contingent on Johnston being chief executive? Or was that a condition of the St George side of the joint venture if WIN was to be successful? It is understood TSE was completely blindsided by Johnston’s appointment. It had told the Dragons there was no need to rush into appointing a chief executive. At no stage in negotiations was Johnston becoming CEO discussed.
Smith mightn’t have the public profile of the Gordon family but he is highly regarded in the world of sports business. Apart from growing up and now living on the South Coast, as well as being a life-long Dragons fan, he would’ve brought decades of expertise to the NRL. Which, to be honest, it needs more of.
His former sports consulting firm Repucom counted the NFL, NBA, FIFA and English Premier League among its clients. Smith sold the business in 2016 for $260m.
The fact that Smith’s interest in the Dragons has never been reported shows he’s not one for grandstanding. He declined to comment when contacted.
“There were a number of interested parties, all with different propositions involving more than just financials, and such propositions are governed by confidentiality agreements, so it would be inappropriate for me be discussing specifics, other than to say that there were many variables considered,” Doust said.
“The available shares belonged to the Steelers and they dealt directly with WIN with respect to certain elements of the financial transaction. Under the terms of the joint-venture agreement, St George District had to sign off on any potential partner. The Steelers believed that WIN was the best option for them and the St George District Football Club and Dragons supported this decision.”
On Johnston’s appointment, he said: “The decision to appoint Brian as CEO came after it was agreed that WIN was to be the partner of the Dragons, and it was a completely separate process. Whilst there was an independent process under way for the CEO role, both partners agreed that Brian was the best person to see through this transition given his knowledge and experience. Brian is highly capable and credentialed with a vast amount of rugby league and corporate experience to blend with his passion for the Dragons.”
“So what?” some may ask about WIN out-manoeuvring TSE to seize part-ownership.
Dragons fans who have grown tired of never having a say in how their club is run, who runs it, and who owns it, especially with their side face-planting on the eve of the finals once again, might think differently.
On the surface, WIN’s involvement appears to be a fantastic outcome for the Dragons. But, like Manly fans angry about the direction of their club under the Penn family, their faithful followers often feel like outsiders.
Witch hunt takes heavy toll
That said, there’s a big difference between having a voice and filthy abuse, and those who attacked Dragons players as they walked up the Jubilee Oval tunnel after the loss to the Bulldogs should hang their heads in shame. “Youse blokes are pieces of shit!” yelled one fan. Not cool.
Whipping boy: Ben Hunt has borne the brunt of the blame for the Dragons' slide.
Photo: John Veage
Meanwhile, there are plenty of people inside and outside the club who are concerned about the mental state of halfback
Ben Hunt. In an interview with the
Herald last week, Hunt said he dealt with the devastation of costing the Broncos the 2015 grand final by going into his shell and shutting out any outside support. There’s concern he’s doing it again as he wears most of the blame for the late-season slide. He won’t speak to a sports psych. The other person copping it is coach
Paul McGregor. There’s speculation he’s already been sacked with one year to run on his contract, which was news to McGregor and others at the club. I’ve been assured no serious discussion about a replacement has taken place, including one about
Wayne Bennett returning. That might change if the Dragons limp out of the finals.
https://www.smh.com.au/sport/the-10...s-choose-the-right-buyer-20180830-p500uo.html
