Sharks cap superthread - latest: NRL clears Flanagan to assistant coach from 2020

[taipan]

Is an annual recurrent 8.5% return realistic on an $18million investment?

Not on Banking investments.Govt infrastructure developments?
Having a new Leagues club with new restaurants and facilities surrounded by a retail complex with units on top, will have a captive clientele, to boost revenue ,should any revenue shortfall occur in the $18m investment.
Debts up to end 2019 will be cleared.

 

[Frailty]

They were desperate, they need money now or it’s all over red rover. Good move by them, no doubt will have cost them a few million long term but needs must. The challenge for them now is to get that annual $2-3milion loss under control so the money doesn’t get blown yet again servicing debt. If they can’t do it now they never will. First thing they need to do is invest in s decent ceo and snr management team and get their reputation issues under control so they don’t end up with the loss of sponsors which has been a big part in those annual losses.

I don't think it was quite as desperate of a situation as you're making out. Under the older arrangement with Capital Bluestone there was always another injection of money coming it that would have cleared the current debt.

There was also a number of redundancies to improve the operational costs of the club which was bring the ledger back to even.

This deal has effectively replaced the planned income from the retail with a $1.5M payment for a fixed amount of years, as well as eradicating the amount of money the club would have needed to invest in the club refurbishment (my belief is the old arrangement involved both partners contributing towards the cost).

Unfortunately, Gorman whilst seemingly having the apparent look of success whilst he was here had a bad habit of spending beyond what was viable. Not exactly the best person to have at Manly.

 

[taipan]

There was also a Flanno payout involved, which will affect the 2019 figures.
Gorman IMO was still basking in the 2016 glory and got lost in the" translation when it came to salary cap issues?

 

[Hello, I'm The Doctor]

https://www.dailytelegraph.com.au/s...e/news-story/404f2cdf9a6d7483cb886d3b406712a0

The Cronulla Sharks have secured a game-changing $40 million cash injection that will turn the NRL’s premiership paupers into a long-term powerhouse.
[COLOR=var(--emphasis-color)]The Daily Telegraph [/COLOR]can reveal the Sharks are poised to announce an agreement to fast-track tens of millions of property development dollars, killing off speculation of a forced relocation or merger as the game looks towards the hot topic of expansion.
Under the agreement being finalised by lawyers, the Sharks will receive an immediate $9 million payment to get rid of all debts and cover their recent salary cap fine and a projected $3 million football club loss in 2019.

Cronulla look set to keep going up, up. Image: AAP Image/Dan HimbrechtsLater this year another $18 million from developers Capital Bluestone will go into a future investments fund that will provide long term income for the football club, estimated at $1.5 million annually to support the NRL side outside of sponsorship, membership and gate takings.
A further $12 million will go into an escrow fund, money held by a third party that becomes available to the Sharks once building work begins on the new Leagues Club and shopping centre on their Woolooware Bay site. The $12 million which must specifically be used for the new Leagues Club, which is expected to be completed in 2021.

How the Sharks’ new development will look.The Sharks have agreed terms with Capital Bluestone to sell their remaining interest in the Woolooware Bay Town Centre staged development to get the money advanced.
Cronulla, along with the Manly Sea Eagles and Wests Tigers, have for years been under threat of a relocation or merger as the game looks to expand and include Perth and a second Brisbane team before a new TV broadcast deal is finalised for 2022.

Cronulla chairman Dino Mezzatesta has ever right to be excited by the news. Image: Brett Costello“We’re not going anywhere,” declared chairman Dino Mezzatesta, “This club will carefully invest the money to ensure we have long term income outside of football and poker machines. The board has put in place an investment committee to ensure the funds would be carefully invested.
“It places us in an absolute position of strength for the future and guarantees the Sharks’ future will always be in the Shire.
“We’ve been around for more than 50 years and will be around for another 50.”

The sun will continue to shine on Cronulla. Image: Tony Feder/Getty ImagesThe Sharks had been under enormous financial strain without a major sponsor, having to deal with the salary cap scandal, the termination payment to coach Shane Flanagan and calls to strip the club of the 2016 premiership.
This is despite the fact the Sharks were actually $130,000 under the salary cap when they won the competition, although the NRL have since found two non-compliant third party deals, collectively worth $70,000.
The club was hauled before an NRL finance committee late last year to explain their precarious position with a warning from CEO Todd Greenberg of no future bailouts for financially stricken clubs.
The new funding deal elevates the Sharks to a powerful position alongside the most secure of the nine Sydney based clubs.
Outside of the $40 million, the Sharks are poised to receive a further $16 million from the State and Federal governments for ground improvements and a high performance facility at the venue they own.
“We will be as strong and secure as any of our rivals in Sydney,” Mezzatesta said.
“We have undergone the most searching compliance overhaul and can now move forward with a new coach and a great roster capable of playing finals football.
“This agreement enables us to de-risk rather than divorce ourselves from the development.
“We acknowledge and thank our partner Capital Bluestone for working towards this successful outcome for both parties and for its ongoing support for the Sharks.”

Does this mean the Sharks are giving up a big revenue stream later?

 

[shaggs]

Does this mean the Sharks are giving up a big revenue stream later?

No it means that they are receiving the money now instead of having to wait until all is built. The money received now will be invested to provide that income that was going to come.

 

[Perth Red]

Does this mean the Sharks are giving up a big revenue stream later?

It’s unclear if the money they were going to get from recurrent revenue from the commercial buildings was for ever or time limited.
Sharks fans in here had previously said it was worth over $1million a year for ever so in that regards yes probably. They have got the equivalent of 12-15 years of that revenue up front but written off what may have kept flowing after that period.

Reality is though they had no choice. They were screwed again so had to take it up front to sort out their annual deficit issues. It still isnt covering whAt they have lost on avg over the last few years but hopefully they can sort out the other issues and this will help a lot.

I’m sure the developers felt they got a good deal out of it.

 

[taipan]

It’s unclear if the money they were going to get from recurrent revenue from the commercial buildings was for ever or time limited.
Sharks fans in here had previously said it was worth over $1million a year for ever so in that regards yes probably. They have got the equivalent of 12-15 years of that revenue up front but written off what may have kept flowing after that period.

Reality is though they had no choice. They were screwed again so had to take it up front to sort out their annual deficit issues. It still isnt covering whAt they have lost on avg over the last few years but hopefully they can sort out the other issues and this will help a lot.

I’m sure the developers felt they got a good deal out of it.

Of course the developers got a good deal out of it, and so they should they are outlaying the money up front in a housing market that is taking a hammering.That means profits on units sales could also take a hammering on joint profits.The club does not have to worry about units being sold, or shops being rented.

A new leagues club with decent restaurants ,a big improvement on the sorry old one now ,will encourage more people to enter and spend.The more profit they make ,the beneficial it is to the Football club.IOW a better revenue opportunity than currently exists.

The Football club had a decent debt, and Greenburger made it clear they weren't bailing out clubs.You play with the cards you've got .Cash up front instead of half share on future unit sales and rental income on retail. Debts up to and including 2019 expectations wiped, money in the Bank.part held in escrow.

A nice impediment to the NRL, trying to relocate the club.

Overall the developer did better, but the Sharks have at least consolidated their position and are or will be debt free, with a new Leagues club as a result.

Of course they cannot cover what they lost over the years due to dumb management, that's water under the bridge.They have a new start now, that's what counts.Shark's fans can at least breath a lot easier, than they have done over the years.

 

[bad boy bubby]

I'm not as positive on this issue as some Sharks fans.
I need to see them hire the right person who will take control of further investments and ensure our future is secure for a very long time.
We've been through enough turmoil with idiots running the joint.

 

[taipan]

I'm not as positive on this issue as some Sharks fans.
I need to see them hire the right person who will take control of further investments and ensure our future is secure for a very long time.
We've been through enough turmoil with idiots running the joint.

I'm positive because of the debt wiping.I'm positive because of the money for a Leagues club,
That being said:-
I agree with you ,the $18m needs to be invested wisely/safely with.,a long term income plan, by a person of the highest scruples and investment and business acumen.
Nothing is a lay down these days, especially with the economy growing slowly, and the housing market taking a hit.That's why I'm more than happy, we don't have to rely on unit sales for revenue from now on.

Sure I'd like the $1m pa est rental from retail,I look at it this way, if we kept going as is, after Greenburger did his expansion essay, we could well be lined up ,for a see ya later job.
We've always walked on egg shells as a club ,but like the cockroaches after a nuclear testing, we keep coming back from oblivion.

 

[thorson1987]

Fair enough. They should be putting a ban on Gorman and make a statement about former directors not being allowed to hold a position in future though. Why should the fans contiue to suffer whilst those actually resposnible get a free ride?

Some things don't change though.

https://www.heraldsun.com.au/sport/...bcb6bc443?sv=3cb1e528a8742a78d80a26c0455dcb51

THE NRL can't claim the Melbourne Storm salary cap scandal report was a warning to would-be cheats if Peter O'Sullivan remains employed at the Sydney Roosters, says former Storm chairman Rob Moodie.

O'Sullivan, the Roosters recruitment manager, escaped any sanction from his club or the NRL despite revelations he was an active participant in Storm's salary cap deceptions from 2005-07 when he worked at Melbourne.

Moodie, sacked as Storm chairman after the scandal, said with an alleged salary cap cheat still active at another NRL club, the game could never be regarded as clean and the Storm saga could not get its full stop.

"The fact that he has been found to be intimately involved in this looks bad for the game. Should he be with the Roosters? No," Moodie said.

NRL salary cap auditor Ian Schubert's 136-page report found evidence O'Sullivan had failed to include in player contracts money paid for third-party agreements and that he "deliberately concealed" the true amount paid to at least two players.

Schubert recommended Storm's two former chief executives, Brian Waldron and Matt Hanson, should never work in rugby league again for their role in the fraud, but there was no such recommendation for O'Sullivan.

That prompted Roosters CEO Steve Noyce to declare O'Sullivan would keep his job and face no penalty.

But NRL boss David Gallop yesterday revealed only legal advice prevented the league from recommending O'Sullivan be sacked.

He stopped short of ordering the Roosters do that, but urged the club to re-think its stance.


"The report discloses serious and persistent past misconduct on his part," Gallop said. "We expect the Roosters to discuss with the NRL this employee's future once they have digested the report. The findings against him are serious and cannot be ignored."

 

[Hello, I'm The Doctor]

No it means that they are receiving the money now instead of having to wait until all is built. The money received now will be invested to provide that income that was going to come.

Basic rule of economics: "Money now is more valuable than money later". You said yourself that the Sharks could take this, invest it and make a bunch more....

So why would the developers hand it over without asking for anything in return? Are we really meant to believe property developers are kind and generous people who give something for nothing to a business partner?

 

[shaggs]

Basic rule of economics: "Money now is more valuable than money later". You said yourself that the Sharks could take this, invest it and make a bunch more....

So why would the developers hand it over without asking for anything in return? Are we really meant to believe property developers are kind and generous people who give something for nothing to a business partner?

God no. We all know property are only slightly above real estate agents on the human scale.

They likely believe that by the time they complete the entire project they will make more money. Previously the sharks got a share of the profits.
They have bothered hedged their bets and decided they are getting a better deal.
As you say money now is what’s important to the sharks, so I think it’s the decision that was needed

 

[taipan]

Basic rule of economics: "Money now is more valuable than money later". You said yourself that the Sharks could take this, invest it and make a bunch more....

So why would the developers hand it over without asking for anything in return? Are we really meant to believe property developers are kind and generous people who give something for nothing to a business partner?

The developers get ALL profits from now on. IOW sale of units and rental from the retail side ,
which they will now own(a sort of min Westfield if you will).They don't have to share any profits with the Sharks.
Thus instead of the club getting a rental income set at $1m pa under the old deal, they will instead get income from the $18m invested (cash up front) and a new League club, which should also boost revenue, compared to the old tired Leagues club now.
The Sharks don't have to worry about what the housing market will or won't do, and ATM it's hardly inspiring.They don't carry those risks.
With Sharks debts mounting and with Greenburger hovering with the relocation axe, the Sharks needed to get of their backsides and ensure long term viability.

No other choices available except a private owner.
We don't know any Arab Sheiks or Russian Billionaires.

 

[Frailty]

The developers get ALL profits from now on. IOW sale of units and rental from the retail side ,
which they will now own(a sort of min Westfield if you will).They don't have to share any profits with the Sharks.
Thus instead of the club getting a rental income set at $1m pa under the old deal, they will instead get income from the $18m invested (cash up front) and a new League club, which should also boost revenue, compared to the old tired Leagues club now.
The Sharks don't have to worry about what the housing market will or won't do, and ATM it's hardly inspiring.They don't carry those risks.
With Sharks debts mounting and with Greenburger hovering with the relocation axe, the Sharks needed to get of their backsides and ensure long term viability.

No other choices available except a private owner.
We don't know any Arab Sheiks or Russian Billionaires.

The bolded is the issue. They don't have the long term viability unless they actually make changes and smarter investments. Hoping the Leagues Club will increase business when the retail is there is a very limited plan, that is no guarantee.

The original development plan was brilliant for the Sharks and the developers, but the Sharks have since operated in a negligent manner that has meant they have had to bite into that deal.

 

[taipan]

I have always stated, the Sharks have since day one had management all with good intentions, but hopeless when it comes to running a business, which is what an NRL club is.

And the development set up by D Irvine is to be applauded, else we would have gone yonks ago.Delays where by now ,the retail section should have been started didn't assist either.

The Leagues club that initially tried to be a Taj Mahal, instead of starting small, overpayments to players who turned out to be duds(one was going to be the next SBW),payouts to coaches who were sacked before contract completion(hello Chris Ando),fines for Peppy le Pews, fines for salary cap fiddly diddly, fines for naive email,Barbas,Birds off fields.

That's why any investment should revolve around if possible Govt infrastructure .Interest rate environment ATM is pretty average.

Yep there are no guarantees about the Leagues club, but I suggest people are more likely to be drawn to a club with modern facilities than one that looks like it's a relic of the past.And having a retail centre on the doorstep provides additional custom possibilities. So having a new Leagues club is one of the changes.The club must cater for children also.
Mark Bouris of Yellow Bricks stated his company has never known the market as bad as it is now.He lost $35-37M last financial.

The point is we had a debt that was going to grow by another $3m this year to $9m.
Mortgage market had great uncertainty.So relying on a 50% share of a huge drop in profits and a far longer delay in clearing the units already built and the stay on others to be built ,would not assist the club.

The club was either going to try and ride out the storm, continue to grow the debt, giving Greenburger the lever to push the relocation button, or do what is being done now.The lesser of two evils.

No debts, a new Leagues club and yes an investment that MUST MUST be invested wisely for the long term.Or the inability to service the growing debt.

NB it always comes down to inept management ,when things hit the fan.
And our club has hit the fan, for nearly 60 years.

 

[Hello, I'm The Doctor]

The developers get ALL profits from now on. IOW sale of units and rental from the retail side ,
which they will now own(a sort of min Westfield if you will).They don't have to share any profits with the Sharks.
Thus instead of the club getting a rental income set at $1m pa under the old deal, they will instead get income from the $18m invested (cash up front) and a new League club, which should also boost revenue, compared to the old tired Leagues club now.
The Sharks don't have to worry about what the housing market will or won't do, and ATM it's hardly inspiring.They don't carry those risks.
With Sharks debts mounting and with Greenburger hovering with the relocation axe, the Sharks needed to get of their backsides and ensure long term viability.

No other choices available except a private owner.
We don't know any Arab Sheiks or Russian Billionaires.

Damn, that sucks. His regular income would have ben a valuable long-term asset...

Ive said befor that it dont think the NRL should have a team in Cronulla ahead of other locations, but that is a big loss for junior RL funding too.

 

[Hello, I'm The Doctor]

I think most would agree though that $1mil-pa potentially forever is better than $18mil in one lump.

Its clearly not a sign that the Sharks are in a good way. I reckon the developers are stoked with the deal.

 

[Frailty]

I think most would agree though that $1mil-pa potentially forever is better than $18mil in one lump.

Its clearly not a sign that the Sharks are in a good way. I reckon the developers are stoked with the deal.

It's not $18M in one lump sum.

It's being put into a Future Investment Fund, the club will received around $1.5M a year (works out to be 12 years by my math).

Essentially the club has sacrificed and ongoing payment from rent (that wasn't a guaranteed amount) for a limited guaranteed amount.

 

[Dragon Slayer]

Frailty, I don’t see it that way you are suggesting.

The trust fund of $18million is to be invested and the interest earned from it annually will go to the Club.

It’s not to be eventually withdrawn down to nothing.

 

[taipan]

Damn, that sucks. His regular income would have ben a valuable long-term asset...

Ive said befor that it dont think the NRL should have a team in Cronulla ahead of other locations, but that is a big loss for junior RL funding too.

If they invest the $18m wisely ,that should be close to making up for the lack of future retail rent.Throw in a new Leagues club, that should (not will )provide better funding than exists currently.

Based on membership numbers, junior numbers, ground ownership, they should never have been considered as temporary.And soon to be no debt, compared to a few other Sydney clubs.

Clubs who have their financials in a solid base in Sydney, should not have to worry about relocation.

Based on what is being shown up at the Titans ,I think Cronulla should be ahead of other locations.

How many Sydney clubs rely on their Leagues clubs to remain solid, quite a few.
If the Sharks had been in the comp a few years I'd agree they would be vulnerable, but they have established a decent fan and membership base and competitiveness over the years.