The Newcastle Knights Board today announced it would move to finalise negotiations for the establishment of a Patrons Trust – following the Tinkler Group's decision to terminate good faith negotiations with the Club and withdraw its privatisation proposal.
Knights Chairman Rob Tew said that the Tinkler Group's proposal in its current form would have been just as unacceptable to the Club's Members as it was to the Knights Board.
“What was initially touted as a $100 million guaranteed offer to buy the Knights has turned out to be a small fraction of that offer with no certainty for the club beyond two years and a host of other liability questions unanswered,” Mr Tew said.
“Quite simply we are not prepared to put the future of the Knights at risk on a ‘just trust us' basis. This matter has been taken out of our hands and we are conscious many Members will be disappointed that the initial promise we all hoped for in the Tinkler Group offer has turned out to be little more than a mirage.
“Throughout the negotiation process over the past four weeks the Board has had one focus – securing the best outcome for the Club and its Members. And, quite simply, after key elements of The Tinkler Group proposal were withdrawn it ceased to be the best outcome for the Knights.
“We believe continuing to operate the club on the current basis and re-opening other options previously on the table makes the most sense.
“At the time we announced “in-principle” support for the Tinkler Group's offer in its revised form, we also referred to a number of other options available to the Club. This included the potential establishment of a Patrons Trust
“The Patrons Trust model has been successfully used in other football codes to help clubs advance their growth plans.
“At the Knights, the Patrons Trust would be used to access funds for capital expenditure, junior development, community programs, special projects, resource improvements and the like, that are deemed necessary to the ongoing future success and development of the club
“Importantly, the Patrons Trust would allow the Knights to maintain its current membership structure. That is, we could continue to operate as a community-based club that has the best interest of Members at its heart
“A Patrons Trust would also allow the Knights to continue its financial turnaround, which has recently gathered momentum on the back of a range of initiatives introduced at the Club.
“The past three years have been a period of significant turnaround in the Knights financial affairs and the future looks extremely healthy. Having inherited a club facing significant financial challenges, major inroads have been made to turn the Knights around.
“As we enter the 2011 playing season, the Club's financial position stands to be significantly enhanced thanks to a new rental agreement for the stadium which will significantly reduce our operating costs going forward,” he said.
