Newcastle in huge trouble - financially

@Tommy Magpie said:
Also need to be careful around the definition of 'not-for-profit'. Profit in essence is revenue less costs. Do the costs include management fees to the Tinkler Sports Group? If so, who controls what they are?

The ATO also has rules and regulations around non-for-profits and the members still will have the right to boot him out.

But I I don't think that scenario will happen. He hardly needs the cash and the knights won't easily turn a profit.
 
@spudoakes said:
i think your being a bit unfair on the bloke who was an apprentice electo from musclebrook and turned himself in2 a millionaire comparing him to global giants like xstrata , rio tinto, BHP etc do u really have any knowledge of the mining industry
anyway im glad he didnt he buy them so he can pump more money into the jets

Don't get me wrong - I have no problems with a bloke making it big like he has. I just think he seems to be having trouble realising he can't just have everything his way.
 
@hammertime said:
@Tommy Magpie said:
Also need to be careful around the definition of 'not-for-profit'. Profit in essence is revenue less costs. Do the costs include management fees to the Tinkler Sports Group? If so, who controls what they are?

The ATO also has rules and regulations around non-for-profits and the members still will have the right to boot him out.

But I I don't think that scenario will happen. He hardly needs the cash and the knights won't easily turn a profit.

Yeah I don't think you buy a rugby league team to make money. Any sport really - unless you onsell it for a profit.
 
Tinkler to stump up $5m to clear Knights' debts

http://www.smh.com.au/rugby-league/league-news/tinkler-to-stump-up-5m-to-clear-knights-debts-20110225-1b8ii.html" onclick="window.open(this.href);return false;

NATHAN TINKLER will immediately pay up to $5 million to cover Newcastle's debts, and has assured members the Knights will not change their name, colours or logo, nor relocate to another city, without their approval if he gains control of the club.

The assurances are contained in a 100-page document outlining the mining magnate's offer to buy the Knights, although the wording of some sections was still being formulated by lawyers from the two parties yesterday to ensure there could be no misunderstanding of the terms of the deal. Tinkler has also committed to underwrite a minimum of $10 million in sponsorship revenue for the club each season until 2021 - a guarantee that is expected to cost him more than $3 million in the first year of the deal as the Knights' sponsorship income is about $7 million.

Any profit made by the club will be put into junior development, and should Tinkler, who has an estimated wealth of $610 million, go broke, the Knights members will be able to buy the club back for $1.

''Nathan won't take a cent out of the club, and that is what upset him so much this week - the fact that some people were suggesting he was somehow going to make money out of it or that he was trying to dud the Knights,'' a source close to the deal said of Tinkler's decision to withdraw the offer on Monday before re-submitting it on Wednesday night. ''He just wants to do it for the community, and to ensure Newcastle has a good football team.''

Much of the confusion about the deal revolved around the headline figure of $100 million - Tinkler's offer to guarantee the Knights $10 million in sponsorship revenue a year for 10 years.

Some people had mistakenly thought Tinkler was paying $100 million to buy the club, a figure that would have dwarfed the $3 million Russell Crowe and Peter Holmes a Court paid in 2006 for a 75 per cent stake in South Sydney.

In fact, the two deals are similar, which is not surprising as Tinkler Sports Group chairman Ken Edwards was the boss of ANZ Stadium when the Rabbitohs under Crowe and Holmes a Court negotiated a 10-year, $10 million deal to play at Homebush until 2017.

''We've talked to Ken about what we did and how we did it,'' Souths chief executive Shane Richardson said. ''[Rabbitohs chairman] Nick Pappas put a lot of things in place to ensure the members were protected, and he is on the board as a representative of the members. For example, if Russell and Peter pull out, they have to give the club back in the same condition as when they took over.

''People were saying that $3 million wasn't a lot of money for Souths but let me tell you, they have put a lot more in than that because nobody makes money out of rugby league.''

As Manly owners Scott Penn and Max Delmege did when they took over the club in 2004, and Crowe and Holmes a Court have done at Souths, Tinkler plans to boost the Knights' sponsorship revenue, and believes he can find new backers who will add at least another $3 million a season to the club's income. If so, Tinkler might not have to put a cent into the Knights but the club would still be in a far stronger financial position than it is now, with the most recent annual report showing Newcastle received $6,544,000 from sponsorship in 2009.

However, the Herald has been told that the Knights have between $4 million and $5 million in debts and accumulated losses that Tinkler would pay off. ''Sustainability is the key, and $10 million in guaranteed sponsorship is a number most clubs would love to have,'' Penn said.

Not surprisingly, Tinkler has the support of the Knights players, and leading player agent Jim Banaghan said private investment provided greater security for contracts.

''Having lived through the collapse of the Crushers, the Chargers, the Perth Reds, the Adelaide Rams, the North Sydney Bears and the Warriors, twice, I think it is absolutely fantastic that somebody wants to offer some security to the players,'' Banaghan said. ''I am sure he has the support of all the players because the NRL doesn't guarantee their contracts so at least the players at the Newcastle Knights will know that they are going to get their money.''

Besides Manly and Souths, Gold Coast, the Warriors, Broncos and Storm are all privately owned, while WIN television has a 25 per cent stake in St George Illawarra.

''Half the fun of privately owned clubs in the NFL is the eccentricity of the owners, and it's the same with people like Russell, Nathan and Eric Watson at the Warriors,'' Richardson said. ''I don't know Nathan Tinkler but he's a self-made millionaire, he's Newcastle born and bred and his father was a truck driver, so he doesn't look like a bad bloke to me.''
 
I am not sure about the name of this thread "Newcastle in huge trouble - financially". I don't think that is accurate.
 
@Tommy Magpie said:
Also need to be careful around the definition of 'not-for-profit'. Profit in essence is revenue less costs. Do the costs include management fees to the Tinkler Sports Group? If so, who controls what they are?

Spot on.

All in all though i think it's a devil Newcastle need to have in order to be really competitive. They struggle to attract players, they aren't currently developing a great lot of talent (unlike us), so it may just be the deal they need to do in the meantime if they want to be competitive.
 
Not just that mate, the Central Coast is a booming area with a heap of potential.
Young families, good mix of demographics; it's everything the NRL should be targeting!
 
@whoneedstherapy said:
@Tommy Magpie said:
Also need to be careful around the definition of 'not-for-profit'. Profit in essence is revenue less costs. Do the costs include management fees to the Tinkler Sports Group? If so, who controls what they are?

Spot on.

All in all though i think it's a devil Newcastle need to have in order to be really competitive. They struggle to attract players, they aren't currently developing a great lot of talent (unlike us), so it may just be the deal they need to do in the meantime if they want to be competitive.

Rich guys aren't always evil. They support the country and communities through considerable taxes.

All the Newcastle directors need to do is approach what effectively is a generous sponsorship offer with optimism rather than cynicism. The bloke is throwing millions at the club for philanthropic reasons only.

Tinkler seems to have his heart in the right place. Non-for-profits exist all over Australia and they are structured so people can't take advantage of them.
 
lol…. not for profit is whats left after management fees & costs...

I'll take a stab in the dark, but I'd want approx $1M fee to manage a footy club!!!
 
http://www.ato.gov.au/nonprofit/content.asp?doc=/content/33732.htm" onclick="window.open(this.href);return false;

Non-profit clause

‘The assets and income of the organisation shall be applied solely in furtherance of its above-mentioned objects and no portion shall be distributed directly or indirectly to the members of the organisation except as **bona fide compensation** for services rendered or expenses incurred on behalf of the organisation.’
 
@hammertime said:
@whoneedstherapy said:
@Tommy Magpie said:
Also need to be careful around the definition of 'not-for-profit'. Profit in essence is revenue less costs. Do the costs include management fees to the Tinkler Sports Group? If so, who controls what they are?

Spot on.

All in all though i think it's a devil Newcastle need to have in order to be really competitive. They struggle to attract players, they aren't currently developing a great lot of talent (unlike us), so it may just be the deal they need to do in the meantime if they want to be competitive.

Rich guys aren't always evil. They support the country and communities through considerable taxes.

All the Newcastle directors need to do is approach what effectively is a generous sponsorship offer with optimism rather than cynicism. The bloke is throwing millions at the club for philanthropic reasons only.

Tinkler seems to have his heart in the right place. Non-for-profits exist all over Australia and they are structured so people can't take advantage of them.

it was probably a bad analogy as i didn't intend to impart he was evil per se, but I do think he is going to be a pain in the ass with tapping up players as he has already demonstrated and seems more than adept to utilise the media to further his interests. Newcastle need a bit more mongrel, someone a bit more cut throat & aggressive to get their re-development going and i feel he would suit them down to the ground. As you mentioned his heart seems to be in the right place and essentially the bloke is looking to create a newcastle sporting superclub between it and the jets which makes great sense due to available leveraging, cost synergies etc.

They also need to make sure that grass roots is looked after as i'm sure a lot of players will look at the lifestyle as well as the coin before they sign. I'm not sure newcastle is the most desirable place to play your trade if you are a younger guy with a fair amount of excess coin to splash around.
 
@whoneedstherapy said:
it was probably a bad analogy as i didn't intend to impart he was evil per se, but I do think he is going to be a pain in the ass with tapping up players as he has already demonstrated and seems more than adept to utilise the media to further his interests. Newcastle need a bit more mongrel, someone a bit more cut throat & aggressive to get their re-development going and i feel he would suit them down to the ground. As you mentioned his heart seems to be in the right place and essentially the bloke is looking to create a newcastle sporting superclub between it and the jets which makes great sense due to available leveraging, cost synergies etc.

They also need to make sure that grass roots is looked after as i'm sure a lot of players will look at the lifestyle as well as the coin before they sign. I'm not sure newcastle is the most desirable place to play your trade if you are a younger guy with a fair amount of excess coin to splash around.

True. Same as Rusty in that respect. Trying to lure blokes like GI just before they sign. I don't blame the guy though, Snowden would have been locked up for 3 years so there was only one time to try to nab him. He'll probably try the same thing with Idris.

There just seems to be some key Newcastle Juniors about to sign hefty contracts, so he needs to act now, before the deals go through.

Once the club is reestablished as a local team, I can't see him poaching too many more players. They will be just like us, nurturing the blokes through the junior grades.
 
<big>Tinkler deal endorsed</big>
BY BRETT KEEBLE
04 Mar, 2011 04:00 AM

![](http://static.lifeislocal.com.au/multimedia/images/large/1136956.jpg)

NATHAN TINKLER

The Newcastle Knights board has endorsed Nathan Tinkler’s privatisation proposal in what Knights chairman Rob Tew described as a watershed day in the NRL club’s 23-year history.

Emerging shortly before 8o’clock last night from a board meeting that lasted almost four hours, Tew said the decision was not unanimous but the majority of directors believed the Tinkler Sports Group’s offer, which includes $10million in guaranteed annual sponsorship revenue for the next 10 years and a bank guarantee of $20million for the first two years of that deal, was ‘‘superior to the alternatives’’.

Tew said an extraordinary general meeting of up to 3000 eligible voting members would be held at the earliest opportunity, most likely Thursday, March 31, at which a 75per cent majority is required to vote in favour of Tinkler’s bid to make the relevant changes to the club’s constitutional structure.

‘‘After due consideration of the attendant risks, the board believes the commercial benefits of the transaction are superior to the alternatives, and on that basis recommend this transaction to members for their support,’’ Tew said, reading from a hand-written prepared statement.

When that news was relayed to Tinkler last night, the multimillionaire racing and mining magnate told the Newcastle Herald: ‘‘That’s great news.’’

When asked whether he and the directors would now stand alongside Tinkler and urge Knights members to vote in favour of the proposal, Tew said: ‘‘That’s exactly what that statement says. It’s a defining day … It is a watershed day, and it is a big decision for our members to make.’’

Tew, who said he personally endorsed Tinkler’s proposal, and Tinkler Sports Group executive chairman Ken Edwards said a unanimous board endorsement was not required for the offer to remain, and that the support of a majority of directors was sufficient.

‘‘This is a big decision, and as I’ve read there, there is attendant risks in that, which our members will assess in their own right,’’ Tew said.

‘‘They’re fully explained, and they will be fully explained and posted out to them in an explanatory memorandum, so our members will have an opportunity to bring their own considerations to the table.’’

Tew said the necessary paperwork had to be sent to the club’s printers by 9am today to make the deadline for a March 31 meeting.

Earlier, Knights chief executive Steve Burraston emerged from the board meeting after about two hours to attend the club’s corporate season launch at Fort Scratchley last night.

‘‘It’s about clarification and going through it, and they are still working through the document ... They’re actually working through it page by page, line by line, and getting a good understanding from the lawyers what each clause means,’’ Burraston said.

‘‘That’s why we haven’t rushed it. We’ve always said we’ll never rush this decision.

‘‘It’s the most important decision that the club will ever make and we’ve got to give the board every opportunity, and the members every opportunity, to have all the information necessary and to make an informed decision on that information, so that’s the process that they’re going through at the moment.

After twice being postponed on Wednesday, the board meeting to analyse Tinkler’s proposal was scheduled for 8.30 yesterday morning but Burraston said it was pushed back until the afternoon because directors did not receive copies of the final document until yesterday morning.

The meeting finally began at 4.15pm, Burraston left at 6.30pm, and directors Leigh Maughan and Peter Corcoran followed him out the door five minutes later.

Burraston said it was never the club’s intention to announce their decision to members or corporate supporters at the club’s season launches yesterday and last night.

‘‘We always said we would call a members’ meeting when we had a completed document. We do have a completed document now, and we will be putting a members’ memorandum together to go out in the next couple of days, as soon as possible,’’ he said.

‘‘The important thing now is that members get the opportunity to go through that document, take what advice they need, and as we’ve always said, the decision is theirs. It’s not mine, it’s not the board’s, it’s nobody else’s. The members will make the decision.’’

http://www.theherald.com.au/news/local/sport/rugby-league/tinkler-deal-endorsed/2093417.aspx?storypage=0
 

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