EXCLUSIVE: Knights, Wests at odds over ... $1m club loss
By BRETT KEEBLE
THE Newcastle Knights are bracing for a loss of about $1 million after a disastrous year on and off the field and the Wests Group is baulking at covering all the shortfall.
It is understood one of the main sticking points is which organisation is obliged to cover a $200,000 "golden parachute" to former Knights chief executive Ken Conway.
When the Knights and Wests Group announced their commercial partnership two years ago, the main component was Wests agreeing to underwrite the Knights for losses of up to $1 million a year, if required.
The Knights did not need Wests' financial safety net last year, as they reported a net profit of $813,255.
But a series of crises, such as the retirement of Andrew Johns, a drop in home crowds by an average 6000 a game, poor results from which the team narrowly avoided another wooden spoon and Mr Conway's payout have contributed to a likely seven-figure loss for 2007.
"I wouldn't like to speculate but it could be in that vicinity," Knights chief executive Steve Burraston told The Herald yesterday.
"That's the total exposure for Wests anyway, because our agreement with them has total exposure for $1 million.
"Whether we need all that, I wouldn't like to speculate but we'll certainly need part of it.
"I don't think we could have had a worse year if you'd have scripted it, from the boardroom problems and the CEO going, to Joey retiring, to the performance on the field mainly due to injury, to the poor weather conditions and significant number of night games and a whole lot of off-field controversy on top of that.
"It was one of those seasons last year and that was always the intention of the Knights-Wests agreement to protect the Knights when a bad year came along and I don't think there was anything more negative that could have happened to us last season."
Wests Group chief executive Phil Gardner would not comment when contacted yesterday.
"One thing I've been really strong on is making sure there is only one voice for the Knights and that is Steve Burraston," Mr Gardner said.
"All will be revealed in the fullness of time."
Mr Burraston said the Knights would settle their figures on December 31, the end of the club's financial year.
Those accounts would be audited before being presented to Wests, so he did not expect to announce the club's bottom line until February at the earliest but was confident any differences with Wests would be resolved amicably.
"The relationship between ourselves and Wests is still very strong and I don't believe that will be an issue," Mr Burraston said.
"It's no secret that we're coming off a pretty poor year.
"Our crowds were down from an average 22,000 to 16,000 and obviously that affects your ticket sales, your concession sales at the ground, your merchandising sales and so on, so we're not expecting a flash year at all in the wash-up."
Mr Burraston attributed the decline in attendance to Johns's sudden retirement early in the year, wet weather and the scheduling of nine night games at EnergyAustralia Stadium.
