DC_fan
Coach
- Messages
- 11,980
The Cronulla Sharks are set for a change in fortunes.
Not even Todd Carneys drunken antics can stop the Cronulla Sharks becoming one of the richest clubs in the NRL.
Sounds far-fetched, doesnt it? Surely those scandal-scarred Sharks cannot suddenly morph into silvertails.
Theyre stuck in a drug investigation that never ends. Theyve got a part-time coach. Theyve never won a premiership. Heck, they might not even be playing in Cronulla a season or two from now.
And when the Sharks tell you their secret weapon is a $500 million property development, you know its only a matter of time until the receivers padlock the gates.
One of the nice things is that 95 per cent of these sales were made to locals they want to be a part of this
Ben Fairfax
Just ask the Balmain boys about property developments. Its bound to end in tears. Not even Canterbury Bankstown could avoid trouble with their Oasis development dream.
Sharks club chairman Damian Keogh gets the scepticism. After 47 barren years, he admits that many fans are not quite ready to believe that fairy tales can come true in the Sutherland Shire.
Weve got this coming but until it all starts being built, its a bit out of reach for people to really see it will happen, he told Saturday Extra.
But on February 1 this year, Sydneys passion for real estate arrived at the Sharks door, and it will take more than any alcohol-fuelled, drug-tainted, urine-bubbling scandal to dampen enthusiasm.
Artist impression of the Woolooware Bay's Cove building.
Little more than a month after NRL chief Dave Smith announced that the club faced a $1 million fine over the 2011 supplements scandal, 250 people swarmed towards the Sharks home ground at Woolooware Bay.
Within eight hours, contracts had been signed on $110 million worth of apartments to be built neighbouring the Sharks Remondis Stadium. No one expected such a rush.
In the months since, 360 apartments worth $235 million have been sold almost 80 per cent of the first two stages of the residential development.
One of the nice things is that 95 per cent of these sales were made to locals they want to be a part of this, said Ben Fairfax, the man behind the Sharks improbable rags-to-riches quest.
Barring a property meltdown on a GFC-scale, the Sharks are looking at an upfront windfall of between $40 million and $50 million.
Fairfax, 44, grew up in Grays Point, went to high school at Kirrawee and spent his weekends as a teenager cheering on Sharks legends like Gavin Miller, Andrew Ettingshausen and Mark McGaw.
Hes remained a Sharks fan ever since, but likes to remain out of the media spotlight, shying away from any suggestion he may be the clubs saviour.
Weve never once said this is about saving the Sharks, he told me this week.
Its not about coming to the club with a cheque book anyone can then go and spend the money and get into other problems.
This is about delivering a new town centre for the Sutherland Shire and by doing that we can help deliver financial independence for the club and a long-term sustainable future in the community.
It was only four years ago that Fairfaxs fledgling development company, Bluestone Property Solutions, convinced the Cronulla Sutherland Leagues Club board to develop their land.
Cronulla Sharks chairman Damian Keogh looking over Sharks Stadium
The Sharks were in deep water. The clubs perilous financial state became public in 2009, with plans even being announced for a partial move to the Central Coast.
They had struggled for years to generate a positive cashflow, running up a $15 million debt.
A vicious cycle of poor financial results, dubious player signings and losing streaks added up to a string of off-field dramas, turning off supporters and sponsors.
Well before ASADA and Todd Carney, there had been player orgies in New Zealand, Reni Maituas two-year drug ban, Greg Birds domestic dispute and a club CEO allegedly hitting an employee while shadow-boxing. No wonder major sponsor LG walked away in 2010.
The club had no choice but to leverage the one advantage it has always held over every other club in the NRL owning its home ground.
The board made a big leap of faith and recognised the financial position they were in and realised they needed a partner to help them, Fairfax said.
Under Bluestones council-approved plan, 600 up-market apartments, looking back towards the city skyline across Botany Bay, will be developed on the Sharks 10ha land holding. Three-bedroom apartments are selling for up to $2.24 million.
The residential precinct has been designed by respected architectural firm Turner, which delivered leading Sydney projects such as Green Square Town Centre, Divercity in Waterloo and Australia Towers in Sydney Olympic Park.
On the other side of the stadium, a 17,500 square metre retail precinct will be developed, giving the area its first full-line supermarket, as well as specialty fresh food retailers, waterfront restaurants and cafes and a medical centre.
The Todd Carney photo scandal is the latest in a string of controversies to hit the Sharks.
The plan includes 770 car parks. The anchor supermarket tenancy is expected to be signed within weeks.
The licensed Sharkies club, which adjoins the grandstand, will be remodelled into a smaller, more efficient facility, sitting above part of the retail precinct.
All development approvals are in place and construction work will be begin on the residential development in September.
By 2018, 1200 people will be living on the Sharks doorstep and 25,000 visits are expected to be made each week to the shops next door.
Fairfax, whose career highlights include the $300 million Woolloomooloo wharf project and the $1.2 billion Rhodes Waterside development, revealed to Saturday Extra financial details of the Sharks joint-venture deal.
Bluestone has agreed to give the club 10 per cent of the gross sales figure for all apartment sales. With the total sale expected to exceed $400 million, the Sharks stands to receive more than $40 million.
Of this, the Sharks have already received a $10 million advance from Bluestone, enabling them to pay out a debt to St George Bank and refinance. Their debt now stands at $5.1 million.
On top of that, the retail development is expected to be worth $150 million on completion.
Fairfax said the Sharks could expect to receive an ongoing dividend of between $750,000 and $1 million a year if the joint-venture decides to retain ownership of the shopping and medical precinct.
If it is sold, the club would receive $9 million, an interest payment and more than 20 per cent of the developments profit.
Things like what happened with Todd Carney really have no impact long-term on what were doing, Fairfax said. As a Sharks fan, Im disappointed, of course, but what is happening here will bring a real, sustainable future.
Imagine the opportunities when you have 25,000 people a week coming here to shop the Sharks will become the centre of the entertainment and leisure destination for the eastern side of the Shire.
Sharks captain Paul Gallen has been with the club throughthe highs and lows.
Keogh expects money from apartment sales to begin flowing to the club in the second half of 2016.
The board is already seeking advice on how to ensure the property windfall is invested long-term to provide income for generations.
Well be setting up a type of future fund low-risk investments to produce a dividend stream, Keogh said.
In the meantime, the board is trying to build revenues and, despite the ongoing ASADA investigation, is already bagged a $5.5 million in corporate sponsorships, 28 per cent ahead of last year.
Despite Carneys urine prank, a new a six-figure jersey sponsorship was signed this week with Labour Health for the rest of the season.
When you consider the South Sydney Rabbitohs, one of the best supported clubs in the NRL, have corporate sponsorships of around $7 million, you realise the Sharks have been swimming hard trying to stay in touch.
The club and football operations would have broken even last year had it not paid $1.4 million responding to the ASADA drug probe and a $150,000 salary cap fine, financial documents show.
When you compare the Sharks overall revenues to the Brisbane Broncos, who have the advantage of playing televised games almost every week, they are well behind its $35 million versus $25 million.
But when the property developments are completed, the Sharks assets might top the Broncos club, which listed assets of $35.4 million in its 2013 annual report.
The Sharks may never match the Bulldogs though, which is backed by the Canterbury Leagues Club, which holds assets valued at $153.4 million.
But Keogh, a former Sydney Kings and Australian basketball star, knows Cronulla will never achieve its full potential without a team of players who act professionally on and off the field. I dont think thats too much to ask, he said.
On the front counter of the Sharkies club sits a glossy 2014 membership brochure, promoting Todd Carne on the cover as the clubs pin-up player.
Inside the brochure, fans who pay to become club members are asked to promise to uphold a membership code of conduct.
As a Shark Member I will conduct myself in a manner that ensures I am a great representative and ambassador for my team, the pledge says.
I wont become intoxicated and understand that I risk being evicted if I do.
As Carney demonstrated over and over again before his eviction, all the money in the world does not guarantee long-term success.
Originally published as Rags to riches tale of NRLs underdogs
http://www.dailytelegraph.com.au/ne...-cronulla-sharks/story-fni0cx12-1226978631525
A rehash of an old story. Someone at the Telegraph feeling sorry for the Sharks.
