Sell-out would put Knights at risk
BY ROBERT DILLON
11 Nov, 2010 04:00 AM
Knights chairman Rob Tew said yesterday his club would expose itself to "potential catastrophe" by selling out to Nathan Tinkler - or any other private owner - without financial guarantees.
Knights management attracted a barrage of criticism yesterday after revelations that Mr Tinkler, the Hunter Valley magnate who owns the Newcastle Jets, had made an offer to add the city's NRL franchise to his portfolio but been rebuffed.
Mr Tinkler's proposal, tabled on Monday, was to bankroll the club for up to $10 million over 10 years, which would include clearing accumulated losses of more than $2.5 million.
When Mr Tew responded that "we would need the existing levels of revenue, as a minimum, guaranteed each year", Mr Tinkler emailed the Knights to withdraw his offer and inform them the matter was "closed".
But the executive chairman of Tinkler Sports Group, Ken Edwards, contacted the Newcastle Herald on Tuesday night to make Knights members and the general public aware of the impasse.
Mr Tinkler's offer, which Mr Edwards said last night was negotiable, will stand until December 31.
The Knights had several issues with Mr Tinkler's offer, including:
* the fact it stipulated a "ceiling" of up to $10 million over 10 years, but no guaranteed minimum investment;
* confusion over whether the $10 million figure included repaying the $2.5 million accumulated losses, or was separate;
* concern about vague clauses such as the "Tinkler Group will ensure adequate working capital at all times";
* and concern that sponsors might not support a privatised club.
Mr Tew said the Knights needed to ensure that any new business model would not disadvantage the club.
"It's a matter of ensuring that any deal that we countenance to take to the members is a deal that places our club in a superior position than it currently is in," Mr Tew said.
"To do that, you need to have a guarantee on particular revenue streams.
"Alternatively, you run the risk of recommending to your members that they expose themselves to a potential catastrophe.
"That's not something that I'm comfortable with. Nor would I recommend it."
Mr Tew said he had no reason to doubt Mr Tinkler's bona fides, but added, "It's not sufficient to say 'I will do them'.
"You need to guarantee certain things . . . an incoming purchaser, or privatiser, would have to accept the fact that they would need to top up the revenue stream.
"And if that's the case, why wouldn't you guarantee it up front?"
Mr Edwards said Mr Tinkler was "frustrated" by the Knights' stance but hopeful that negotiations could resume.
"Everything is negotiable," Mr Edwards said.
"Nathan is determined to do the right thing by the Knights and by the Newcastle community . . . but what we're not prepared to do is enter into unrealistic and uncommercial and unfair arrangements.
"And some of what we've been asked to do we consider to fall under those categories."
Knights chief executive Steve Burraston said he had not given up hope of an amicable resolution.
"The board has always said they will consider any offer that is made in good faith," Mr Burraston said. "But it doesn't mean you have to accept the first offer that comes along.
"And it doesn't mean you don't have a right to negotiate.
"And it doesn't mean you don't have a right to question what is in the offer."
Mr Tew dismissed suggestions he had acted unilaterally in his dealings with Mr Tinkler this week, saying his board had been regularly updated.
"The fluency of the situation would dictate, as you would imagine, that not 100 per cent of the detail would be available on a daily matter to all of the board members," he said.
He was disappointed the Jets had opted to publicise the breakdown in negotiations.
"It's probably fair to say that part of the modus operandi that is unfolding is that there is a question that has been put out there in the public domain that perhaps the existing board and their chairman of the Newcastle Knights are not acting in the best interests of their members," Mr Tew said.
"I suspect that is the undertone to Ken Edwards and Nathan Tinkler releasing this into the public domain."
Mr Tew said he had "been told directly by some sponsors that they would need to rethink their position" if the club became privately owned.
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