Tinkler weighs in with $100m Knights offer

[BunniesMan]

http://www.smh.com.au/rugby-league/...n-with-100m-knights-offer-20110117-19u42.html

MINING magnate Nathan Tinkler has upped his offer to buy the Newcastle Knights to a staggering $100 million - guaranteeing the Knights $10m in sponsorship every year for the next decade and erasing their $3m debt in return for the club's NRL licence.
Just two months ago, Knights chairman Rob Tew rejected a $10m offer from Tinkler for the licence. Tew last night said he would take Tinkler's offer to a board meeting tomorrow night, when other funding options for the struggling club would be discussed.

Surely if the Knights are braindead enough to knock this offer back then the NRL should never give them any financial help ever again like they did a year or two ago. And we should never not raise the salary cap just for their sake.

This is a no brainer. Surely it's a given that they accept? Thoughts?

 

[Ulysseus]

This is simply a flow on from them rejecting the first offer.
Now they have been given an increased off, 10 fold.
Good for them, that's how business works to a degree.
Now it is up to them to take the 100M or hold out for more, or possibly lose the offer altogether.

 

[BunniesMan]

This is simply a flow on from them rejecting the first offer.
Now they have been given an increased off, 10 fold.
Good for them, that's how business works to a degree.
Now it is up to them to take the 100M or hold out for more, or possibly lose the offer altogether.

Before this was announced I'm pretty sure I remember Tinkler saying this would be his final offer. If they do hold out for more, and he calls their bluff and walks away, that would just be inexcusable on their part and I would not want another cent going their way ever again to specially aid them. The salary cap aswell.

 

[Loudstrat]

Hang on - so if Piggins had won in his fight against Rusty and PHaC you would not want any money going to Souffs?

It seems like an offer that is too good to refuse - but what's in thefine print? $100m is not enough if the result is going to be another Edelstein type joke.

 

[Von]

On the surface it seems a good deal for all parties. Let's see what happens.

 

[BunniesMan]

Hang on - so if Piggins had won in his fight against Rusty and PHaC you would not want any money going to Souffs?

It seems like an offer that is too good to refuse - but what's in thefine print? $100m is not enough if the result is going to be another Edelstein type joke.

If we were stupid enough to knock Crowe/HaC back, and they walked away, I would not expect a cent in charity specifically for us ever again. Or for the salary cap to be held back for our sake. It's not that I wouldn't want it, I wouldn't expect it. We wouldn't have deserved it.

 

[Perth Red]

I struggle to see them getting a better offer. What have they to lose other then some board members having to leave?

 

[Ulysseus]

On the surface it seems a good deal for all parties. Let's see what happens.

Agree, and sometimes it isn't all about the surface.

100M is a f**king good offer.
However, remember, this is for the licence.
What has always been viewed as a peoples club would now be one mans hobby....................a hobby he may eventually get tired of (see English Premier League).

I can see that it would be a bit rich for them to walk away from this and 2 years later start asking for handouts ala 2005.

 

[Perth Red]

$100m is a expensive hobby! and so what if he walks away in 10 years, either someone else will take over or they'll revert back to public ownership and be no worse off than now. I still struggle to see why you wouldn't.

 

[Cletus]

They'd be crazy to knock that back. But you have to wonder if his notives are pure, for $100 million I can't see how the Knights can get any promises not to move the club out of him.

 

[BDGS]

They'll accept this, they only turned down the last offer because it wouldn't guarantee a lot of things. But $100M will take care of that, the Knights will accept this final offer.

 

[Cletus]

$100m is a expensive hobby! and so what if he walks away in 10 years, either someone else will take over or they'll revert back to public ownership and be no worse off than now. I still struggle to see why you wouldn't.

Or they'll be in Perth.

 

[Ulysseus]

Private owners pulling out, after varying lengths of time, of many businesses have often caused acute financial pain.

 

[1 Eyed TEZZA]

$100m is a expensive hobby! and so what if he walks away in 10 years, either someone else will take over or they'll revert back to public ownership and be no worse off than now. I still struggle to see why you wouldn't.

Just on this, what would happen if a club did decide to go public again? Would the members have to pay out the owner? Would club profits be garnished until the payment is complete?

 

[aqua_duck]

They'd be crazy to knock that back. But you have to wonder if his notives are pure, for $100 million I can't see how the Knights can get any promises not to move the club out of him.

Considering all his assets are based in and around the Hunter Valley and his passion as a born and bred Novacastrian, relocation wouldn't be much of a concern

 

[cleary89]

I read they get 17m in sponsors a year, and knocked back the first offer because coal and allied was the major sponsor, putting something like 3m into them each year. So coal and allied pulls out, they still have 14m a year, and he is only guaranteeing they have 10m a year. So basically, he puts nothing into it. Just pays off the 3m debt and gets the license.

That said, he obviously loves the region and wouldn't let the club die, but putting 10m a year into the club is different to guaranteeing they get 10m a year.

 

[cleary89]

My bad, according to tele it was only 7m a year from sponsors.

here


So at current, he would only be putting in an extra 3m himself, plus wiping the 3m debt. Current trends are that everyone is growing, with more sponsor dollars, so in 5 years whos to say they wont have the 10m easily?

I don't think the offer is as great as it sounds from what I can see.

 

[Slackboy72]

So now where are the people who said the Knights were crazy to knock back the first offer?

And how cheap does this make the Rusty-PHac bunnies deal look?

 

[butchmcdick]

So what happens if tinkler goes bust ?

 

[Alex28]

Just on this, what would happen if a club did decide to go public again? Would the members have to pay out the owner? Would club profits be garnished until the payment is complete?

Under the last offer the public/members could buy the club back off him for the amount that he put in to the club. When it was $1 Million per year IF the club needed it, I could see this is achievable.

However now it is $3.5 Million per year (last set of financials actually states our sponsorship at $6.5 Million). At the end of 10 years who is coming up with $38 Million+ to buy the club back off him?

I also kinda question long-term his ability to underwrite this. $100 Million (and I know he will never have to put in the whole amount, but that is his commitment to us) from a guy who is worth $600 Million now and has made it very quickly and in a very risk driven is a substantial amount. What if the next deal brings him undone? Where does that leave the Knights?

Do the due diligence and get it right members of the board. On the face of it - great offer. But we only have one chance of getting the sale of the club done right.