Rich list coal baron Nathan Tinkler has stunned the world of rugby league by offering to buy the struggling Newcastle Knights rugby league club in a deal worth more than $100 million.
Tinkler, who tried to buy the club in November 2010 for the more conservative sum of $10 million, has made a proposal to the Knights board that would see him guarantee a minimum of $10 million in advertising revenue for the next 10 years, plus pay off the company’s $3 million debt, in return for the club’s license.
The Knights board with discuss the proposal with Tinkler tonight. If they do not back his push, Tinkler says he will walk away from the club to which he has contributed around $750,000 in recent years. He also has loaned the company more than $450,000.
But If the board approves his offer, the matter will then proceed to a vote of members, where it will need 75% of the votes in favour if it is to succeed.
However, club chairman Rob Tew says he is “not sure this is the best proposal” for the club and says Tinkler’s offer in late 2010 has flushed out other investors prepared to invest in the club.
Some reports suggest that senior club officials remained opposed to Tinkler’s takeover move.
However, Tinkler has moved to reassure the Newcastle community that he is not trying to attack the club’s administration and take the club away from members.
“We want to make it very clear this offer isn’t an attack on the current Newcastle Knights administration,” Tinkler told the Daily Telegraph.
“It is about presenting a better and more financially stable option. It is incomprehensible that in our region we struggle to financially support a rugby league club, yet we export 40% of the state’s wealth. It is clear in our current format and structure we can’t financially compete with the big-city clubs.
Tinkler, whose fortune is worth more than $600 million, is well known for his love of sports.
He has sunk a reported $200 million into his Patinack Farm horse racing and breeding empire, and last year he rescued the Newcastle Jets A-League soccer club from dire financial straits.
Given the economics of sports team ownership in Australia, Tinkler is unlikely to see much of a return on his giant investment.
However, this does not seem to worry the entrepreneur.
“My motivation is to support the community and I am lucky enough not to worry too much about the Knights’ bottom line. I want them to be successful both on and off the field, like the rest of the Hunter community.”
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
Comments