Singo's blast at Knights
By Josh Massoud
http://www.news.com.au/dailytelegraph/sport/nrl/story/0,26799,23431152-5006066,00.html
JOHN Singleton has slammed the Newcastle Knights for "doing business like it's the 1960s" after stunning revelations the club is facing insolvency. The Knights are reeling from a $1,288,660 loss last year - a monster shortfall that has prompted auditors to declare the club's future "uncertain''.
And rich benefactor Singleton - the millionaire advertising guru whose beer label Bluetongue pours $675,000 a season into the Newcastle coffers - is not a happy man.
"There's no networking, no communication - it's like doing business in the 1960s. It's pure management incompetence,'' Singo stormed. Newcastle's 2006-07 annual report shows the Hunter flagship is battling to reconcile a $2.3million deficit between its assets and liabilities.
The difference all but accounts for a $2.1million reversal in fortunes from the previous financial year, when Newcastle recorded an $813,255 profit.
The effect of last season's miserable weather and team form on gate takings has been blamed for the downturn, but the report also reveals Newcastle racked up an extra $1.55million in football-related expenses from the previous year.
It is understood a six-figure payout to departed CEO Ken Conway and legal advice incurred in the ongoing Kirk Reynoldson dispute contributed to the spending explosion.
The financially unnerving outcome moved reporting auditor Crosbie Warren Sinclair to raise the prospect of insolvency in the report.
"Uncertainty exists as to whether the company (Newcastle Knights) will be able to continue as a going concern without the continued support of the company's members, crowd attendances, NRL funding, sponsors and the alliance with our commercial partners.
"The board is continuing to monitor costs through budgeting and reviewing all expenditure and seeking out further opportunities for increased revenue. If the company is unable to continue as a going concern it may be required to realise assets and extinguish liabilities other than in the normal course of business and at amounts different to those stated in this financial report.''
Now operating without a licensed club grant or guarantee because of the recent collapse of its safety-net deal with Wests Newcastle, the Knights will lean heavily on sponsorship money to see them through the current crisis.
Singleton expressed little surprise upon learning of the club's dire finances, and remains furious over last year's release of several local heroes who appeared in Bluetongue advertising.
"We give them almost $700,000 a year, and they don't seem to give us anything in return,'' Singleton told
The Daily Telegraph.
Bluetongue is now in the third year of its five-season sponsorship, a "goodwill deal'' Singleton has vowed to honour. "We won't pull the plug but I want to make it clear that my support is for the players, not the board,'' he said.
Singleton is a member of influential Hunter-based business lobbyists, the White Knights. Although unhappy with last season's player sackings and turmoil, the group has not nominated a ticket for Newcastle's current board elections.
But former stars Tony Butterfield and Robbie Tew are contesting the vote, whose result will be announced at the club's AGM on April 9.
Burraston did not return calls last night.
Loses ... On-field success is overshadowed by off-field drama. Liam Driver
