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Wests Tigers need an urgent cash injection of $1 million to survive - something powerful stakeholder Wests Ashfield will only provide in exchange for control of the joint venture's board.
Fairfax Media can reveal the embattled club has come to the most critical crossroads of its turbulent history, with the Magpies side of the partnership no longer prepared to provide funding without greater control.
While they steadfastly want to remain in partnership with cash-strapped partners Balmain, Wests have demanded an extra director on a reduced nine or seven-man board and the chairmanship for the next three years in exchange for new funding to remain solvent.
Wests Tigers chairman Mike Bailey - who is also chairman of Wests - said on Monday night: ''I don't know what Balmain's view is today, but we live in hope that good sense will prevail and the need will be recognised for the sort of money we're contributing and that the club can flourish. I would have to say, when you look back over this joint venture, there have been times when we have reached a similar situation. The difference this time is that we do have a financial problem that needs to be addressed. We have one side, potentially, to address that. The [ARL Commission] understands the situation and they are keen for us to address it. From our point of view, we need to bring this to a head and march on with a more secure financial base.''
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Asked when Wests wanted an answer from Balmain, Bailey said: ''We've asked for Balmain to address this by the end of the week. We want to continue, as we always have, in partnership with Balmain despite the problems we have. We have tried to do that in the past. We do get frustrated that we can't address the most pressing problem - the need for finance.''
It is also understood the ARLC recently commissioned an independent report on the governance of the club, which foreshadowed independent directors.
A bemused Balmain chairman Nick Di Girolamo, who is deputy chairman of the joint venture, said his side of the partnership wanted the NRL model pursued.
''The Wests Tigers have been in constant dialogue with [NRL chief executive] Dave Smith in relation to financial stability and best corporate governance practices,'' he said. ''This is not about a short-term quick fix for the Wests Tigers. This is about the longevity of the club. It's about ensuring that we have the best corporate governance in place, which would include the injection of independent directors to cover the breadth of expertise required on club boards to ensure the future viability of the club.
''I say that with no disrespect to the current directors of the Wests Tigers. However, it is quite clear from our discussions with the NRL that we need reform. From a Balmain Tigers perspective, we accept this view.''
Wests are prepared to allow even control again once Balmain becomes stronger financially.
But for now, Wests have asked for the governance change in the wake of growing frustration over Balmain's inability to meet its financial obligations since the closure of Balmain Leagues Club prevented the Tigers from providing investment funds to the club.
Wests Ashfield, which provides the Magpies' funding, has already provided more than $500,000 in short-term loans to the NRL club.
Balmain were unable to make immediate contributions when funds were needed in July last year, with Wests then starting negotiations to alleviate the situation, as allowed under the agreement between the two foundation clubs.
In December, when the required funding had not been received, Wests initiated the change in the club's shareholding to more accurately reflect the financial viability of the two groups, effectively enabling Wests to contribute financial support alone. Balmain rejected this move, along with other short-term changes, without explanation.
Bailey denied the club was on the verge of insolvency.
''I don't think it's a matter of insolvency as a matter of addressing some of the ongoing financial problems going into the future,'' Bailey said. ''Also, that money is to support the junior leagues of both areas. We regard the most important aspect of our business as overcoming financial shortcomings.
''That's why we are trying to move in the way we are.''
Read more: http://www.smh.com.au/rugby-league/league-news/wests-tigers-need-quick-1m-to-survive-20130819-2s7c3.html#ixzz2cRiyPZue
Fairfax Media can reveal the embattled club has come to the most critical crossroads of its turbulent history, with the Magpies side of the partnership no longer prepared to provide funding without greater control.
While they steadfastly want to remain in partnership with cash-strapped partners Balmain, Wests have demanded an extra director on a reduced nine or seven-man board and the chairmanship for the next three years in exchange for new funding to remain solvent.
Wests Tigers chairman Mike Bailey - who is also chairman of Wests - said on Monday night: ''I don't know what Balmain's view is today, but we live in hope that good sense will prevail and the need will be recognised for the sort of money we're contributing and that the club can flourish. I would have to say, when you look back over this joint venture, there have been times when we have reached a similar situation. The difference this time is that we do have a financial problem that needs to be addressed. We have one side, potentially, to address that. The [ARL Commission] understands the situation and they are keen for us to address it. From our point of view, we need to bring this to a head and march on with a more secure financial base.''
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Asked when Wests wanted an answer from Balmain, Bailey said: ''We've asked for Balmain to address this by the end of the week. We want to continue, as we always have, in partnership with Balmain despite the problems we have. We have tried to do that in the past. We do get frustrated that we can't address the most pressing problem - the need for finance.''
It is also understood the ARLC recently commissioned an independent report on the governance of the club, which foreshadowed independent directors.
A bemused Balmain chairman Nick Di Girolamo, who is deputy chairman of the joint venture, said his side of the partnership wanted the NRL model pursued.
''The Wests Tigers have been in constant dialogue with [NRL chief executive] Dave Smith in relation to financial stability and best corporate governance practices,'' he said. ''This is not about a short-term quick fix for the Wests Tigers. This is about the longevity of the club. It's about ensuring that we have the best corporate governance in place, which would include the injection of independent directors to cover the breadth of expertise required on club boards to ensure the future viability of the club.
''I say that with no disrespect to the current directors of the Wests Tigers. However, it is quite clear from our discussions with the NRL that we need reform. From a Balmain Tigers perspective, we accept this view.''
Wests are prepared to allow even control again once Balmain becomes stronger financially.
But for now, Wests have asked for the governance change in the wake of growing frustration over Balmain's inability to meet its financial obligations since the closure of Balmain Leagues Club prevented the Tigers from providing investment funds to the club.
Wests Ashfield, which provides the Magpies' funding, has already provided more than $500,000 in short-term loans to the NRL club.
Balmain were unable to make immediate contributions when funds were needed in July last year, with Wests then starting negotiations to alleviate the situation, as allowed under the agreement between the two foundation clubs.
In December, when the required funding had not been received, Wests initiated the change in the club's shareholding to more accurately reflect the financial viability of the two groups, effectively enabling Wests to contribute financial support alone. Balmain rejected this move, along with other short-term changes, without explanation.
Bailey denied the club was on the verge of insolvency.
''I don't think it's a matter of insolvency as a matter of addressing some of the ongoing financial problems going into the future,'' Bailey said. ''Also, that money is to support the junior leagues of both areas. We regard the most important aspect of our business as overcoming financial shortcomings.
''That's why we are trying to move in the way we are.''
Read more: http://www.smh.com.au/rugby-league/league-news/wests-tigers-need-quick-1m-to-survive-20130819-2s7c3.html#ixzz2cRiyPZue
