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Manly's future hangs in balance
Brad Walter and Glenn Jackson | March 7, 2009
THE FIBROS may save the Silvertails, with Mounties - the licensed-club group that started in Mt Pritchard - emerging as a potential buyer of the debt-ridden Manly Leagues Club.
With the $15 million sale of Manly Leagues Club to football club owners Max Delmege and Scott Penn collapsing earlier this year, the future of both entities is under a cloud just a week before the Sea Eagles commence their NRL premiership defence against the Bulldogs next Saturday night.
Delmege and Penn, who hold respective 38 and 42 per cent stakes in the Manly football club, have fallen out badly over the failure of the deal but put on a united front yesterday at the Sea Eagles' season launch as they shook hands and insisted they would attempt to continue working together.
The pair contributed $750,000 in the form of a 5 per cent deposit on the purchase of the leagues club premises and the land it is on in Pittwater Road, but lost that money after failing to meet a deadline, which was twice deferred, to pay $10m before the end of last year.
The balance, of which $3.5m was to be deducted in exchange for the adjoining property that formerly housed the Manly football club offices before being bought by Delmege in 2002 for $2.5m, was to have been paid by the end of this month but the deal has been cancelled and the deposit forfeited.
As a result, Manly Leagues Club - also a shareholder in the company that owns the Sea Eagles - has struggled to meet its financial contributions to the football club.
According to a balance sheet dated October 31, 2007, that was included in that year's financial report, the leagues club had debts of $9,820,014, which is what prompted the decision to sell its building and land.
In addition, Phil Franks - the man whose $1m guarantee to the NRL after the demise of the Northern Eagles joint venture in 2001 enabled Manly to continue playing in the premiership - is seeking payment of $500,000, reduced from $1m, which he says he was promised for 21 months' work as project manager overseeing the redevelopment of Manly Leagues club.
Franks began legal action against the leagues club on the eve of last year's grand final win and, according to documents obtained by the Herald from the Supreme Court hearing, there may be other outstanding debts, namely a $700,000 mortgage.
The Sydney property developer and former Balmain, Norths and Penrith forward says his main motive isn't the money and that is why he has agreed to halve the amount of his fee from the amount first offered to him. But after previously saving the Sea Eagles, Franks again fears for the club's future.
"I just think they are going down the drain so I might as well get some of my money otherwise I won't get anything," Franks told the Herald. "You need $10 million or $11 million a year to run a football club so unless something happens I really fear for their survival."
Finding a new buyer for the leagues club appears crucial but after Franks lifted the value of the site from $12.2m to $21.1m in 2005, another valuation before the sale to Delmege and Penn estimated the property to be worth $15.25m and there is likely to have been a further decrease since.
Also considered at the time was a proposal to amalgamate with the Mounties Group, which Manly Leagues club general manager Peter Spray said "took the board by surprise".
Despite deciding not to pursue the proposal, Spray told Mounties Group chief executive Greg Pickering in a letter dated April 23, 2008, that "there had been genuine interest" and the Herald understands there have been recent inquiries to see whether the organisation - which also operates Harbord Diggers club and Manly Bowling Club as well as two clubs in western Sydney - was still interested.
A meeting of the Manly board, which is divided in support for Delmege or Penn, is scheduled for March 18 but the co-owners yesterday foreshadowed an earlier gathering to resolve their differences.
After shaking hands with Penn and speaking briefly with him, Delmege said he wanted the pair to sort out their differences at the board meeting, of which he would enjoy majority support. However, Penn said he would prefer the warring factions to come together earlier, possibly even next week, in a bid to end the stand-off.
"We've got to sort it out," Penn said. "Between the Penns and the Delmeges, we're about 84 per cent of the club. The board's important, but as majority financial owners of the business, we've got to work out what we want. I think it's probably prudent that we sit down and work it out first and then talk to the rest of the board."
Delmege said: "We'll iron out our differences. There's no question."
http://www.leaguehq.com.au/news/news/manlys-future-hangs-in-balance/2009/03/06/1235842657991.html
