Tinklers Knights set for strong financial finish
John Stensholt
With the club set for an NRL finals appearance this weekend, the financial result for Nathan Tinklers Newcastle Knights this season will be the best since the former billionaire became owner in 2011.
Troy Palmer, chief executive of *Tinklers Hunter Sports Group (HSG), the entity that owns the Knights and A-League football club the Newcastle Jets, says the rugby league team is in a healthy position on and off the field.
The Knights were a bit of a basket case when we took them over. They were always in the bottom of the competition for most indicators, such as revenue, merchandise and sponsorship. But now, we are in the top three or four in the NRL for those categories.
Turnover for the club will exceed $20 million in 2013. However, Palmer admits the Knights will still lose at least $2 million this year, a sum he says will be covered by Tinkler, who has had well-publicised financial issues.
Weve still got a bit of work to do in that regard, but it is the same for most NRL clubs at the moment, Palmer says. I think in the next two to three years, we will definitely be profitable.
At the moment, there is still that gap and weve done a lot of upfront *spending since Nathan became owner. But we will see the benefit of that over the next few years and we will close that gap [between profit and loss] *significantly.
Palmer confirmed the $10.3 million bank guarantee the Knights still have in place from Tinkler, as per the terms of his takeover of the club, will remain untouched and not be used to cover any annual losses.
The Australian Securities Exchange-listed Brisbane Broncos, South Sydney Rabbitohs and the North Queensland Cowboys are considered to be on the only clubs in the competition to be *profitable, although Manly will be close to breaking even this year.
Palmer says the Knights have about $10 million in annual sponsorship income, and companies such as NIB, Sportsbet, Aurizon and Hunter Ports, which is owned by *Tinkler, will continue to sponsor the club past 2014.
Long way to go
Even more importantly, the Knights officially launched its new training and administration facility last week, paid for by Wests Group Australia under a long-term sponsorship deal with the licensed club *organisation.
The facilities we have at our centre of excellence are now as good as any club in the country, Palmer says.
He says HSG is also working to convince sponsors to back both the Knights and the Jets. We think it works well and they can reach different markets that way. Football appeals more to the youth market in particular.
He says the Jets are on target to attract at least 10,000 members for the 2013-14 A-League season, which begins in October.
The league will be in its first season of a four-year $160 million broadcast *contract with SBS and Fox Sports Australia, with the former meaning the sport will have its first free-to-air presence since the old National Soccer League was disbanded in 2004.
However, Palmer says the Jets will still lose more than $1 million in the coming season and the financial *equation for the private owners of A-League clubs remains difficult.
Theres still a lot of issues for the clubs and we still battle. What I think you will see is that its the next TV deal after this one that will see the clubs in a better position, so we have to hang on until then, he says.
The deal starting this season means clubs are probably $500,000 better off each. But we lost $20 million combined last season, so that only really brings the total losses back to $15 million. So its still a long way to go.
The Australian Financial Review
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