Tinkler weighs in with $100m Knights offer

[muzby]

lambretta, i'm guessing finance wasn't your strong suit at school..

Well point me in the direction of the people willing to pump $100 million into Souths then. Saying another number is bigger is completely pointless if no one was going to pay it.

that's exactly the point.. no-one in their right mind would value souths as a $10m per year investment..

lets maybe put it in terms that you may be able to understand..

i have $100,000 and want to buy a car..

i walk down to one of uncle nick's car yards..

i see a nice BMW there, as well as a beaten up hyundai excel.. both have $100k price tags on it..

which one would i buy? correct.. the bmw.. why is that? because at $100k, the hyundai is dramatically overpriced...

now.. if that hyundai was for sale for $3k, i may just buy it as it seems to be at the right price..

hence the same with souffs.. $3m seems about right for them..

The person looking to buy into the Knights has offered to clear a $3 million debt and make up additional money in sponsorship. That's not buying the club for $100 million - it's paying three and then entering into a business plan with a limited liability.

correct.. he's not buying it for $100m, but he's placing a market value on the club of $10m per year, and is valuing it at $100m over 10 years..

still more than souffs..

 

[macavity]

Bunniesman: The gift that keeps on giving.

Yes, he reminds me of herpes, too.

 

[muzby]

1. I'm 20. I have been for like 3 months.
2. I'm a uni student and it's our holidays and I'm bored because most of my friends are back in Sydney visiting family and my girlfriend actually does have a job.

doofus, if you read the post, he was saying that you don't have a job, wasn't referring to your girlfriend..

but going off your response, i'm assuming that your GF is the only breadwinner in the house... so i guess if she's the one who earns the cash, she's probably within her rights to demand that you:

- watch the wedding instead of the football
- can't grow a beard
- can't get a tattoo
- must wax yourself


tell me, when you go drinking with your friends (the ones she permits you to see) does the conversation go something like this:

 

[Cletus]

Originally Posted by Different kind of Rabbit
lol.

If you actually look at the nuts and bolts of it, the deal that Tinkler is offering is almost exactly the same as that which Crowe offered Souths.

$3 mill to wipe off debt and then an amount each year to cover any short fall in sponsorship. The only difference being that Tinkler has a cap on his liability, Crowe does not.

Don't let the truth stand in the way of a good Souths bashing though.

Very true.

No it's not, 1. e says he will provide sufficient working capital if the club has a shortfall. I don't know how likely it is but he's still offering it, it's a very good deal.

 

[Ziggy the God]

lambretta, i'm guessing finance wasn't your strong suit at school..



that's exactly the point.. no-one in their right mind would value souths as a $10m per year investment..

lets maybe put it in terms that you may be able to understand..

i have $100,000 and want to buy a car..

i walk down to one of uncle nick's car yards..

i see a nice BMW there, as well as a beaten up hyundai excel.. both have $100k price tags on it..

which one would i buy? correct.. the bmw.. why is that? because at $100k, the hyundai is dramatically overpriced...

now.. if that hyundai was for sale for $3k, i may just buy it as it seems to be at the right price..

hence the same with souffs.. $3m seems about right for them..


correct.. he's not buying it for $100m, but he's placing a market value on the club of $10m per year, and is valuing it at $100m over 10 years..

still more than souffs..

Market Value?
He is underwriting the sponsorship and clearing the debt.

Of that, the Knights who already have sponsorships of $7m pa, would need to pull zero sponsorships from now on, for Tinkler to tip in the full $10m in that year.

That does not even account for inflation over the next 10 years.
Thus, Tinkler is not taking a material risk, he knows that his presence will be more than enough to close that sponsorship gap fairly quickly.

Crowe did not underwrite the sponsorship, but built it up to the highest we have ever had in the clubs history.

Good luck to the Knights, I think this is a great deal, and will set the club up into the next decade and beyond.

 

[Slackboy72]

In all seriousness though (bit tired of laughing at Bunniesman's lack of testicular fortitude) I don't think this is a good deal for Newcastle.
It's not $100m. It's $33m or less.
We know the Knights get $7m per year from sponsors.
We know that the grant from the NRL will increase with the next TV deal. We just don't know how much and when.
So what if the sponsorship goes up from $7m to $9m?
That leaves Tinkler paying $3m and then $10m over 10 years some of which will of course be tax-deductible for Tinkler's company.
That's not much better than his original offer.
Are the Newcastle Knights worth more than $13m? I would say so.
Are they worth $33m. I would say manybe not but I'm glad for people to disagree on that.
Is the expected increase in grant revenue worth more than $33m? Is the expected increase in revenue from the refurbished stadium worth $33m over 10 years (120 games)? Possibly not.
But from where I sit the Knights aren't in any grave danger, even with that debt.
Everything points up from gate revenue, membership revenue, TV revenue.
I suspect Tinkler knows this and he wants to grab a bargain on the cheap.
All speculation sure but if I was selling something I wouldn't let someone else buy it with my future income.
Ask Tinkler to front up with his own $33m and see what happens.

 

[muzby]

Crowe did not underwrite the sponsorship, but built it up to the highest we have ever had in the clubs history.

so ziggy, what level has your sponsorship been "built up" to? what is your current sponsorship position? how much is the club earning in sponsorship?

i've been asking all through this thread for someone from souffs to actually put some facts & figures up here to justify these claims of russell's input & influence..

do date what have readers of this thread seen?

nought. nada. zip. nothing.


souffs fans can keep spinning their line about how rich and well off they are at the moment and how they are the most influential in the league..

when the rest of us know what your short-medium term reality is...

 

[muzby]

Market Value?
He is underwriting the sponsorship and clearing the debt.

yes.. market value.. he is saying that if they do not get $10m per year in sponsorship, he will pay the difference, therefore putting their market value at $100m over 10 years..

why is this market value?

well, because tinkler, being a buyer or an investor, has said how much he is willing to pay as a maximum.. if no-one trumps this offer, then he is the leading bidder and therefore has set the market price..


lets say you rock up to an auction for a house and you expect the place to sell for between $600-$700k... if bidding gets to $650k and then someone comes in with a ridiculous bid of say $900k, and they win the auction and pay for the house, the house's current market value is now $900k, not $700k..


have you got it now, or are you still fuming that the knights, with their shorter history, less premierships and tainted player history are worth more than "the pride of the league"?

 

[Ziggy the God]

so ziggy, what level has your sponsorship been "built up" to? what is your current sponsorship position? how much is the club earning in sponsorship?

i've been asking all through this thread for someone from souffs to actually put some facts & figures up here to justify these claims of russell's input & influence..

do date what have readers of this thread seen?

nought. nada. zip. nothing.


souffs fans can keep spinning their line about how rich and well off they are at the moment and how they are the most influential in the league..

when the rest of us know what your short-medium term reality is...

Go and find it yourself, Google is your friend.

All of our sponsors have had publicity about it, you know, as you seem to bitch about it all the time.

 

[muzby]

Go and find it yourself, Google is your friend.

All of our sponsors have had publicity about it, you know, as you seem to bitch about it all the time.

why should i have to go and do your grunt work for you?

my side of the argument (newcastle's $100m is greater than souths $3m) has figures to back it up..

souths argument (rusty's profile and pockets are worth more than the $100m) has no factual support...

 

[Ziggy the God]

yes.. market value.. he is saying that if they do not get $10m per year in sponsorship, he will pay the difference, therefore putting their market value at $100m over 10 years..


have you got it now, or are you still fuming that the knights, with their shorter history, less premierships and tainted player history are worth more than "the pride of the league"?

You clearly have comprehension problems, because you firstly do not understand the deal (go and read other posts, don't take my word for it).

In any case, who gives a rats what the team is worth financially, it is not listed and I cannot buy it, so as long as they have enough revenue in comparison with the top clubs, that is all you want.

Secondly, I am all for the deal, I have said it twice in this thread.

I am happy to have a laugh and a dig, I can handle it when people constantly have a go at our club, but when we get braindead pharks like you who know two bits of f**k all trying to have a swing, then it would be remiss of me to not point it out.

I am going to stop talking about us from here, because this is a thread about the Knights. I suggest you start another if you want to continue your trolling.

 

[Alex28]

In all seriousness though (bit tired of laughing at Bunniesman's lack of testicular fortitude) I don't think this is a good deal for Newcastle.
It's not $100m. It's $33m or less.
We know the Knights get $7m per year from sponsors.
We know that the grant from the NRL will increase with the next TV deal. We just don't know how much and when.
So what if the sponsorship goes up from $7m to $9m?
That leaves Tinkler paying $3m and then $10m over 10 years some of which will of course be tax-deductible for Tinkler's company.
That's not much better than his original offer.
Are the Newcastle Knights worth more than $13m? I would say so.
Are they worth $33m. I would say manybe not but I'm glad for people to disagree on that.
Is the expected increase in grant revenue worth more than $33m? Is the expected increase in revenue from the refurbished stadium worth $33m over 10 years (120 games)? Possibly not.
But from where I sit the Knights aren't in any grave danger, even with that debt.
Everything points up from gate revenue, membership revenue, TV revenue.
I suspect Tinkler knows this and he wants to grab a bargain on the cheap.
All speculation sure but if I was selling something I wouldn't let someone else buy it with my future income.
Ask Tinkler to front up with his own $33m and see what happens.

Appreciate what you are saying, however:

* What club in the competition is actually getting $10 Million in sponsorship annually? Maybe Brisbane?;
* We WILL lose the C&A sponsorship of around $1 Million once it ceases to become a community club. This sees our sponsorship drop from $7 Million to $6 Million. By my sums he is then paying $4 Million in the first year to meet the requirements of the agreement (plus the $3 Million to repay the clubs debt);
* If the club really wants to compete with the others, they will need to generate more "third party" sponsors to be able to pay players outside of the salary cap, not generate more club sponsors. This makes his sponsorship guarantee even more valuable as it guarantees club income whilst giving us the ability to compete with the Souths and Broncos-type deals that we can not compete with at the moment;
* The $10 Million figure increases annually linked to inflation, so it is more than likely to be closer to $12-13 Million at the end of the 10 years;
* He has indicated that any profits go back to the community - I don't see him as "picking up a bargain" as I really don't see anything for him to gain financially out of this directly from the club;
* Any revenue from the increased TV deal (if that actually occurs) is outside of sponsorship revenue. That actually puts the club in an even better position.

Tinkler will have to pay closer to $33 Million than $13 Million over the 10 years.

 

[muzby]

In any case, who gives a rats what the team is worth financially, it is not listed and I cannot buy it,

wow.. and you say i have comprehension skills... so because you can't afford to buy the team, it is therefore not up for sale..

your team would be very much up for sale if someone came in with the right sized cheque... hell, your messiah even said in 2009 that he was going to stop putting money in and that you have to stand on your own two feet..

guarantee you if tinkler went to rusty with the same deal, he'd be out of there quicker than sandow dives..

Yo
I am happy to have a laugh and a dig, I can handle it when people constantly have a go at our club, but when we get braindead pharks like you who know two bits of f**k all trying to have a swing, then it would be remiss of me to not point it out.

please.. point it out..

 

[Slackboy72]

Appreciate what you are saying, however:

* What club in the competition is actually getting $10 Million in sponsorship annually? Maybe Brisbane?;

I think there would be a few who are close to it. Considering most teams have an annual operating budget of ~$20m+ it's hardly a game changing amount.

* The $10 Million figure increases annually linked to inflation, so it is more than likely to be closer to $12-13 Million at the end of the 10 years;

It's still $10m in current terms. The fact that he can get away with paying it in the future with income of the club is what the club should be concerned about.

* He has indicated that any profits go back to the community - I don't see him as "picking up a bargain" as I really don't see anything for him to gain financially out of this directly from the club;

But how much will the Tinkler group charge as a management fee for running the Knights?

* Any revenue from the increased TV deal (if that actually occurs) is outside of sponsorship revenue. That actually puts the club in an even better position.

Which is why they don't necessarily need his money...

Tinkler will have to pay closer to $33 Million than $13 Million over the 10 years.

Doesn't it bother you that no one can nail down a price on the club? Surely they, and Tinkler, should know how much the club is worth both on a NPV and net asset valuation. That and selling it for an unknown amount is just bad business.

 

[Perth Red]

Are clubs actually worth anything? Aside from Brisbane all clubs lose money so what exactly is the profit in owning an NRL club? Even if he only ends up putting in $10mill how will he earn $1mill a year from the Knights to cover that investment? To me clubs actually have very little commercial worth to investors who expect a return.

As stated Knights sponsorhip is currently $6.5mill (and is probabaly higher than its been in a long time at that amount). Either he will bring in more sponsors = + for the Knights
or he will make up the shortfall and guarantee an extra $3.5mill a year for the Knights = + for the Knights.

I am struggling to see ANY downsides to this deal for the Knights.

you can argue that an NRL license should be worth more to buy (and I'd love to know your arguments for how you value a NRL team) but I don't see a que of investors looking to buy the Knights or any other team, so on market value they clearly aren't worth very much at all.

 

[Von]

Agree Red, clubs in Australia are not money making ventures. Private investment is generally by guys who love the club and don't want it to fold. A nice plaything if you have too much money and don't mind losing some of it on your hobby. Good luck to them.

Do the Knights want to go on living this hand to mouth existence for another 25 years?

 

[Swamp]

I've got a sinkling feeling that this inept Knights board will knock this back just to give themselves more time to mull over their "other" options knowing that they could well be out of job soon.
I think Tinkler has the game at heart, born & bred in the Hunter Valley where he made his millions, he now wants to ensure both the Knights & the game of RL is safe. Who is to say another investor comes alonmg with a slightly better offer but is in for themselves & not worry about grass roots etc. They must go with Tinkler on this, he has already bailed them out before, he is not going to let go down the gurgler!

Swamp

 

[applesauce]

Can anyone honestly say that they think Tinkler will stop the club prospering? Who invests "$100million" (theoretically) and wants to keep on sinking money into it long term (without trying to make it self sufficient) or just pisses that money down the drain and screw the club and their own reputation over?

Tinkler has just as much to lose in this through his public and commercial image within Australia and Newcastle.

It is a minimum 10mill/year amount (without sponsors). I find it hard not to believe if the club needed more money he wouldn't be 110% committed to getting the club back on it's feet just like Souths.

It would really help out the club if the Bears come back as well, i would think he would have deep pockets for marketing/juniors on the CC and Newcastle regions.

 

[Spot On]

Can anyone honestly say that they think Tinkler will stop the club prospering? Who invests "$100million" (theoretically) and wants to keep on sinking money into it long term (without trying to make it self sufficient) or just pisses that money down the drain and screw the club and their own reputation over?

Tinkler has just as much to lose in this through his public and commercial image within Australia and Newcastle.

It is a minimum 10mill/year amount (without sponsors). I find it hard not to believe if the club needed more money he wouldn't be 110% committed to getting the club back on it's feet just like Souths.

It would really help out the club if the Bears come back as well, i would think he would have deep pockets for marketing/juniors on the CC and Newcastle regions.

He'll guarantee the club receives a minimum of $10 mill per year in sponsorship revenue. It currently receives around $7 mill. Tinkler needs only tip $3 mill a year at the moment.

 

[Slackboy72]

I'm sure he means well but what does he know about running a football club?
How do we know he won't screw things up?
It's a big risk to sell your club to someone for an indeterminate amount.