I agree with PR
Nothing but manouvering, this isn't the end of this deal.
The media conference that just concluded seemed to indicate there's a much better offer on the table...
The media conference that just concluded seemed to indicate there's a much better offer on the table...
Exactly! It would be like a hollywood actor running an NRL club because he has money...wait a minute...:shock:
I'm going against the grain here and saying good riddance. From all reports management wanted to call a meeting today to discuss some finer points such as junior support, and a buy back price for the club. Sounds like they wanted to ensure the community wasn't going to get screwed over.
Tinkler seems like a petulant child with a lot of money who either immediately gets his own way, or nothing.
Mmmm we can only hope, where is all this love for the Knights suddenly coming from?
The offer was apparently something to do with a "Patrons Trust". The $$ figures mentioned are much smaller than the Tinkler offer but that may not be relevant given the difference in the period of time this offer refers to.
Knights need to come out and be very clear what the problems and blocks were or else their fans could just see the $100mill disappearing and get very disenchanted. Some good PR needed by the Knights me thinks.
The Newcastle Knights Board today said it was confident it could successfully negotiate the outstanding issues related to the proposed privatisation of the Knights when negotiations resume on Monday.
Knights Chairman Rob Tew said there were a number of key issues which need to be resolved for a deal to be finalised and he was optimistic an agreed proposal could be negotiated.
The Knights board received detailed legal documents in draft form on Wednesday and today issued comments on the documents to the Tinkler Group in advance of a meeting on Monday.
There are a number of key commercial elements which we still need to be satisfied on, all of which were clearly enshrined in the proposal received and considered by the board on the 19 January and which we were prepared to endorse in-principle at that time.
1. $10m guaranteed sponsorship per annum over 10 years
The first and overriding issue the Board has in relation to the current offer on the table is that it represents a significant departure from the $100 million dollar proposal guaranteed to be paid over ten years that was announced by The Tinkler Group last month.
Currently, the offer consists of a commitment to underwrite the difference between $10 million annually and income generated via sponsorship and sponsorship hospitality each year.
The offer also includes a one-off up-front payment of $3 million (the accumulated debts).
The present offer does not commit to a 10 year period.
The offer of guarantee at present is for a period of 2 years and does not commence until 31 March 2012.
In order to progress this proposal a number of matters need to be agreed between the parties including
The definition of the sponsorship sum.The commitment to 10 years.An ability for our members to enforce the guarantee
At present the Tinkler Groups offer to underwrite the difference between sponsorship and $10mil each year has included calculating all revenues (excluding ticketing and membership) into the definition of Sponsorship income. On that basis the total is already as high as $10mil and therefore the contribution by the Tinkler Group would be zero.
At present – in the event of a sale of the company within the 10 years – there is no obligation upon a future purchaser to commit to the guarantee and other conditions for the remainder of the 10 year period.
At present there is no ability for our members to enforce the guarantee on the guarantor. That is as a consequence of the company structure as is proposed by the Tinkler Group.
2. Ability to fairly buy back the club if something goes wrong
Separately, The Tinkler Group can sell the Knights to another party – including another Tinkler entity – and the only ability the Members have to stop this and buy the Club back is to pay the combined cost of $3 million (the accumulated debts) plus the unknown combination of the total of all Tinkler Group contributions per annum.
We are seeking to:
Identify a stated buyback sum at the outset of the agreement orInclude an ability to enforce the obligations of the guarantee and other conditions upon an incoming purchaser for the remainder of the 10 years.
3. Junior Development
The Newcastle Knights have accepted responsibility for junior development in Rugby League in our Region for some 23 years. It is written into our constitution as such and we have excelled in this area over that time.
In the current offer, the Tinkler Group have removed the commitment to Junior Development from the documentation.
We understand the financial commitment to development is substantial however, we require an iron clad commitment guaranteeing a minimum expenditure on development in the region to ensure we do not lose the benefit of the excellent work undertaken by generations of Knights operatives thus far.
Clearly these outstanding items would be as much of a concern to Members as they are to the Board, it is imperative they be resolved as quickly as possible.
We are optimistic that we can reach an agreement on the above items as they were all within the scope of the original offer proposed by the Tinkler Group in January.
Rob Tew
Chairman
Statement from the Tinkler Sports Group
The Tinkler Sports Group would like to thank the Newcastle Knights Board for providing feedback on its proposal. Media outlets received this release at approximately 4.30pm today, yet the Tinkler Sports Group is still to receive a copy from the Knights.
The Newcastle Knights media release refers to the Tinkler Sports Group being provided today with detailed comments on the documents, which we have also not received. We are therefore at a loss to understand the various statements made by the Newcastle Knights Board in its media release. The Tinkler Sports Group is confident that the key platforms of its offer are very much intact and are fully enshrined in the considerable documentation negotiated over the last month and presented to the Knights last Wednesday.
To recap, we reconfirm that our offer:
Is for a 10 year period.
Allows for a minimum $100 million in sponsorship and hospitality revenues across the term
It does extinguish Club debt – which could be more than $4 million
It is not for profit – all profits ploughed back in to the Club
All heritage rights are protected
Further we are also pleased to commit today to a minimum $1 million per annum + CPI spend in Junior Development but have withdrawn our offer to agree to a buyback for the Club in certain circumstances It is not feasible to provide certainty in every possible risk assessment. The Tinkler Sports Group strongly supports the current Board’s position to identify the risks, if any, for Members.
It would appear that the Newcastle Knights Board may not understand the offer as tabled and documented, or it may be a risky commercial tactic.
As the Knights have previously and publicly stated, this is the biggest decision in the Club’s history - yet in our view it would appear that they may have failed to provide the resources necessary to get this job done.
The Tinkler Sports Group also highlights its frustration that after more than a month of negotiation that the Newcastle Knights Board has yet to present all requested due diligence materials and have not honoured an agreement to consult in relation to key commitments regarding player contracts and sponsorship agreements.
The Tinkler Sports Group is determined to reach a positive outcome which will provide security and a strong financial future that will make the Newcastle Knights and rugby league in the Region, the envy of the NRL.
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.