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Clock ticking for Nathan Tinkler as Knights bank guarantee transferred

Default risk: Cash-strapped mining magnate Nathan Tinkler with Knights coach Wayne Bennett.

Default risk: Cash-strapped mining magnate Nathan Tinkler with Knights coach Wayne Bennett. Photo: Darren Pateman

Nathan Tinkler edged closer yesterday to defaulting on his commitments as Newcastle Knights owner but has not given up hope of retaining control of the club.

Tinkler has until close of business on Monday to secure a $10.52 million replacement bank guarantee, a key component in the terms and condition of his 2011 takeover.

But the latest twist in negotiations suggests this might not happen, which would entitle the Knights members club to start the process of buying back the club for $1 from the struggling tycoon.

The first step towards that will occur today, when members club chairman Nick Dan accesses the existing bank guarantee, which expires on Monday, and collects cheques of $10.3 million from Westpac and $220,000 from the Greater Newcastle Building Society.

Those cheques will be deposited in a joint-signatory account, accessible only when HSG and the members club concur.

In the meantime, Knights chairman and CEO Matt Gidley have held last-ditch negotiations with the members club and the NRL in the aim of creating a new ‘‘unified’’ business structure.

How this can be achieved remains to be seen, but if a new bank guarantee is not in place by 5pm Monday, Tinkler will have reneged on his obligations, and the members club will have the upper hand in any negotiations.

It would then appear HSG would need to produce an extraordinary proposal to persuade the members club not to activate the process of buying the club back for $1.

Alternatively, the NRL could step in to broker a ‘‘restructure’’ of Knights at management level, as the governing body has done this month with Wests Tigers.

But it is understood the NRL would be reluctant to override the rights of the members, as agreed when Tinkler privatised the Knights on March 31, 2011.

In a statement issued last night, the Knights said HSG had ‘‘allowed’’ the bank guarantee to be transferred into a joint-signatory bank account.

‘‘HSG has been in fruitful discussion with the NRL over a period of time to identify a unified business model to ensure the long-term future of the Knights,’’ the statement said.

‘‘This guarantee has been placed in a secure bank account with joint signatories being HSG and the members club while negotiations between the members club, the Knights and the NRL continue. 

‘‘The current ownership model and management team will remain in place throughout the duration of these discussions.

‘‘No further comment will be provided by any parties involved during this period of negotiation.’’

In a list of key points, the statement said the Knights, members club and NRL would ‘‘undertake negotiation to identify a new model moving forward’’ and HSG remained ‘‘committed to contribute [to] and support the Knights into the future’’.

7 comments so far

  • So this "guarantee" Gidley and others have made so much of a big deal about is not really a guarantee at all because its proceeds will be sunk into a "joint signatory" account with HSG. That being the case, if HSG decides not to sign its release, because it does not concur with members, doesn't that leave the Knights in an insolvent position pending litigation? The Sharks, the Tigers, the Knights; who's next? These clubs are now serious business entities and cannot be run by unskilled people who happen to be favourite sons of the clubs. In this case, the Knights history over the last few years is marked by naivety and false hope rather than pragmatic business operations. That does a disservice to a great club and an incredibly loyal fan base. The Knights should be a dominant force in the NRL and it is time for that to occur.

    Commenter
    Steve
    Location
    Arizona, USA
    Date and time
    March 27, 2014, 2:55AM
    • All very sad!

      Commenter
      curaeus
      Date and time
      March 27, 2014, 4:40AM
      • Well, the former Knights board member who insisted on the bank guarantee when all seemed to baying for his head has been proven right. I doubt anyone will apologise.

        Here is one ting to keep in mind: Wayne Bennett is Tinkler's employee, not the club's. What happens if Tinkler walks away entirely? Does Bennett do so as well? After all, it's rumoured that Bennett is on $1 million a year and I doubt that Tinkler can find that kind of money down the back of the couch.

        Commenter
        YS
        Date and time
        March 27, 2014, 11:52AM
        • To be honest, and I'm only guessing based on the character of the man but I can imagine that Bennett will stay to the end of his 4 years regardless of the money situation. I don't think we have a snowball's chance in hell of retaining him after that no matter how much money is thrown at him.

          But now the Tink's money is gone and once we lose the super coach Newcastle it seems that Newcastle will be back to were we were 5 years ago. Only able to attract second rate coaches and the cast offs from other clubs and constantly battling to keep the wolves from the door.

          This is a sad state of affairs considering our great fan base and rugby league nursery.

          Commenter
          Seano
          Date and time
          March 27, 2014, 2:05PM
        • Combined with his own already proven ability, the learning curve Rick Stone has had under Bennett will ensure the Knights are in more than safe hands down the track.

          Commenter
          Nathan
          Location
          Dogtown
          Date and time
          March 27, 2014, 5:13PM
        • The character of the man, Seano? This is a man with a history of stripping clubs bare as he leaves. The Broncos have never recovered from the player exodus as he left, for which he was clearly responsible, and it also happened to a lesser extent at the Dragons.

          Make no mistake, Bennett is in it for the money. There is a good reason for that. He is determined to provide for his two disadvantaged kids for the rest of their lives, and I respect that. But it doesn't alter the fact that money is his driving force.

          Commenter
          Paul D
          Location
          Brissie
          Date and time
          March 28, 2014, 3:15AM
      • Count yourselves lucky that Nathan Tintkler has thrown money into the Newcastle Knights for the last 5 years. Imagine if one of those so called "Sports Reporters" were the bank, you'd be gone long ago. They have been spelling doom to the Knights since day one, no ideas just dragging down a good club with a great district full of supporters. Newcastle can't rely on a millionaire to keep themselves financial, time to stand on your own. Sports clubs eat up the $$ so you need a big and constant supply of cash coming in via ownership, supporters and sponsorship.

        Commenter
        devilsmman60
        Location
        brisbane
        Date and time
        March 28, 2014, 12:43AM

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