Game over: How Tinkler lost the Knights

High expectations for the Knights to win a premiership under the control of Nathan Tinnkler were unfulfilled. IF you spend long enough as a newspaper reporter, you come to realise that there are all types of tip-off.

There is the “mail” that initially sounds exciting but ultimately proves to be a figment of an informant’s exaggeration.

There are the rumours that seem outlandish but, once confirmed, add weight to the theory that fact is sometimes stranger than fiction.

There are whispers and scuttlebutt, sworn statements and leaked documents. There is all this and everything in between.

Of all the tips I have received over the years, few have grabbed my attention like the phone call I took on the night of Friday, March 14.

On the other end of a line was a long-time contact, who in recent times has become a good mate. As usual, our conversation soon turned to the Newcastle Knights.

“What are you hearing?” he asked.

“I’m hearing they might be having trouble keeping up with the rent,” I replied.

My source asked if I could meet him. “What I’m hearing could be even bigger than that,” he said. “I don’t want to discuss it over the phone.”

We arranged a time and a place to liaise.

I had an inkling our next conversation would be no ordinary tip-off. My impression was that we were going to be discussing the beginning of the end.

WHEN did it all start to go wrong for the Hunter Sports Group?

With the benefit of hindsight, perhaps Tinkler’s right-hand man, HSG chief executive Troy Palmer, was a tad too hasty to get behind the wheel of Tinkler’s new toy and take it for a spin. Palmer was still a relative L-plater when it came to sporting administration, but he was confident, even headstrong, beyond his years.

A former accountant and financial controller, Palmer’s only experience in running football clubs had been gained in the previous five months, after Tinkler agreed to take control of the Newcastle Jets when former owner Con Constantine experienced financial difficulties.

Palmer did not seem to regard his relative inexperience as a hindrance.

Within a matter of days, the incumbent Knights CEO, Steve Burraston, had tendered his resignation.

“He [Burraston] called a meeting just before 2pm, thanked us and walked out without clearing his desk,” one Knights insider said at the time.

Burraston was the first Knights employee to make his exit after the Tinkler takeover but he was by no means the last. In coming months a steady procession of staff and players left, clearing the decks for a new regime, funded by a self-made billionaire and overseen by the incoming master coach, Wayne Bennett.

The signing of Bennett was followed soon after by big-name players Darius Boyd, the international who had won premierships under the master coach at Brisbane and the Dragons, and former Knights favourites Kade Snowden, Danny Buderus and Timana Tahu, who were all lured back to the club.

The mood among the Novocastrian faithful was an intoxicating blend of excitement and anticipation.

Under Rick Stone and his no-frills battlers, the Knights were a top-eight team. The combination of Tinkler’s cash and Bennett’s nous would surely take them to the next level.

Wayne Bennett and Nathan Tinkler

When Bennett was interviewed at a luncheon shortly after arriving in Newcastle and asked: “Do you expect to win a premiership while you’re up here?”, Tinkler interjected from a nearby seat: “He’ll win four!”

Nobody was arguing.

The optimism was perhaps best illustrated by a think-tank for Knights “stakeholders” organised by NIB chief executive Mark Fitzgibbon at the health fund’s Honeysuckle offices, at which the subject matter was: “How can we make the Knights an outrageous success?”

This reporter was among about two dozen who spoke positively about the club’s prospects.

It is fair to say, at that stage, like most people the Newcastle Herald believed in the vision.

THEY say that if something seems too good to be true, it usually is.

It was only natural that, in the early days, Tinkler was viewed as a godsend in his adopted home town.

First the former mine electrician cum self-made tycoon stepped in to save the Jets. Then he underwrote a sold-out exhibition match against David Beckham’s LA Galaxy.

Next he threw Surfest a lifeline and secured international netball Tests. There was talk of funding a National Basketball League franchise.

When he put his hand up to buy the Knights, the only surprise was that 3 per cent of members voted against it.

For the vast majority of the Novocastrian faithful, it was a case of love at first sight.

When Tinkler described himself as a sporting “philanthropist” who was happy to dip into his own pockets as an “act of community”, there seemed little cause to question his motives. Why look a gift horse owner – even one with plans for a coal loader – in the mouth?

But perhaps we were all so dazzled that the warning signs went unnoticed.

Tinkler may have been overwhelmingly endorsed as the Knights’ first private owner, but his takeover bid was hardly amicable.

Twice he stormed away from the negotiating table and publicly lambasted Burraston and Newcastle chairman Rob Tew, placing them under enormous pressure, before a deal was eventually agreed.

Santa Claus, it seemed, had a temper.

But perhaps the most obvious evidence that not all was as it seemed surfaced in June 2011, almost three months after HSG assumed interim control of the Knights.

A fundamental condition of the privatisation contract was for Tinkler to have in place a $20 million bank guarantee, as a safety net in case he could not fulfil his commitments.

After a number of deadline extensions, Tew became so frustrated by HSG’s tardiness in raising the bank guarantee that he threatened to torpedo the deal.

Tew knew how crucial the bank guarantee was. Without it, there would be no “leverage” to ensure Tinkler kept up his end of the bargain.

Eventually, HSG stopped making what appeared to be excuses and delivered the problematic surety and, on August 5, after paying out somewhere between $2.5 and $7 million in liabilities (depending on who you believe), the takeover was completed.

Tinkler finally owned the Knights. But the deed of sale contained a notable clause in the fine print.

If at any point over the next decade Tinkler defaulted on the bank guarantee, the members would be entitled to buy the club back for $1.

AS opening nights go, it was something of an anti-climax.

In front of a bumper crowd of 28,189 at Hunter Stadium on March 1, 2012, Newcastle’s new era dawned with a 15-14 loss to Bennett’s former club, St George Illawarra.

The Knights bounced back with a round-two victory against Cronulla, and by round eight they were were seventh on the ladder with four wins.

Then came a five-game losing streak, after which Newcastle eventually limped home 12th, a far cry from the top-four position Tinkler had boldly promised.

But if game-day results were disappointing, it was developments off the field that were causing most concern.

For months, the Herald had been hearing whispers that, behind the scenes, not all was running as smoothly as possible at HSG. Bills were not always being paid in a timely fashion.

Newcastle Herald front page stories on Nathan Tinkler and the Knights.

Matters came to a head in August, 2012 – a year after the Tinkler takeover – when investigative reporter Donna Page revealed in a page-one exclusive that Tinkler had “left a trail of debt devastating small-business owners from the Upper Hunter to Queensland”.

Page had spoken to “dozens of businesses chasing outstanding debts of more than $1 million from Hunter-based Tinkler companies”, yet the response of HSG was to query the veracity of her report.

“I can assure you there are no cash-flow concerns at HSG,” Palmer said in a statement. “All suppliers are being paid, will continue to be paid and will always be paid.

“It is disappointing that the Herald continues to drive this smear campaign against Nathan all because the Knights and the Jets have introduced a professional media policy which does not allow the Herald to run the agendas of both clubs.”

This became something of a recurring theme. It seemed HSG would go to extraordinary lengths to contain any unwanted publicity.

When the Herald reported that HSG was being chased for a $350,000 tax bill, which they blamed on the former Knights administration, HSG issued a statement to thousands of Jets and Knights members labelling the story “completely wrong” and “another example of the [Herald’s] agenda”.

“HSG has placed all aspects of this issue today in the hands of its legal advisers and further action is anticipated,” the statement read.

Meanwhile, the dominoes continued to tumble.

Newcastle chairman Rob Tew and Hunter Sports Group chief executive Troy Palmer announcing the change of ownership of the Knights in August 2011. Picture: Dean Osland

In quick succession, Tinkler’s private jet and helicopter were repossessed and his head horse-racing trainer, John Thompson, admitted Tinkler’s massive Patinack Farm stud had been running on such a shoestring that: “I’ve gone weeks without vets, farriers, bedding and ran out of feed a number of times”.

According to BRW estimates, the one-time billionaire lost almost $2 million a day during 2012 and disappeared from the ranks of the nation’s Rich List after his fortune fell below the $235 million cut-off.

Tinkler, who by this stage had moved to live in Singapore, responded to all this with a rare interview in November, in which he declared: “There has definitely, absolutely, been a spirited media campaign to get me.

“It does piss me off but I just brush it away . . . some sections of the media treat me like I was Christopher Skase, breathing through a mask, sitting in a wheelchair in Majorca.

“I never run from anybody, everyone always gets paid.”

A month later, the situation escalated when the Australian Taxation Office moved to liquidate eight companies linked to Tinkler, including the Knights, Jets and HSG to recover more than $3.19 million in unpaid tax.

A “surprised” HSG insisted the debt would be settled and subsequently averted wind-up proceedings.

But almost on a weekly basis, it seemed Tinkler’s business empire may have been unravelling.

GIVEN the unprecedented dramas of 2012, what HSG needed more than anything was to present a squeaky-clean shop window, in the form of a successful team. Tinkler’s financial dilemma was now an issue in the national media, as evidenced by a Four Corners documentary in which he was labelled “a grub who doesn’t pay his bills” by a Tamworth electrician who claimed he was owed $30,000.

Other episodes combined to earn Tinkler an unflattering nickname: the “Boganaire”.

First there was the unexplained dismissal of Jets coach Branko Culina and his son, Jason, followed by Tinkler’s eventually aborted attempt to relinquish Newcastle’s A-League franchise licence.

Then the Knights were fined $88,749 for breaching the 2012 salary cap, and soon after it was revealed Tinkler had breached NRL rules – unknowingly – by betting $25,000 on his team to beat the Warriors, in a 2011 game they lost.

Tinkler’s reputation, and the club’s fortunes, hinged on the Knights enjoying a triumphant 2013 campaign.

A premiership win may have plastered over the cracks.

Bolstered by rugged imports Beau Scott, Jeremy Smith, Joey Leilua and David Fa’alogo, Newcastle produced a late-season surge to reach the grand final qualifier – their best finish to any season since their last premiership in 2001.

But the improved performances did not appear to have eased the pressure mounting on HSG. Average home crowds declined from 20,919 in 2012 to 18,836 in 2013, and there were conspicuous numbers of vacant corporate boxes in the Andrew Johns Stand at Hunter Stadium.

The suspicion was that the Knights were costing Tinkler big money, far more than he had anticipated. The question was how long he could sustain it.

Tinkler was understood to be so concerned about how badly the Knights were bleeding, he started telling key figures: “I can’t keep doing this on my own.”

He needed more support from the community, in particular at corporate level.

Trouble was, by now, Tinkler had already relinquished his prized Whitehaven Coal shares, various pieces of blue-chip real estate and hundreds of racehorses, including four-time group 1 winner All Too Hard.

His hopes of hanging onto two football clubs were looking increasingly remote.

IN early January this year, HSG found themselves in a familiar position – under siege – after new signing Russell Packer was jailed for a brutal assault.

But while the media focused on the Packer scandal and other unsavoury incidents involving club official Ben Rogers and young prop Zane Tetevano, an even more remarkable saga was secretly playing out in the corridors of power.

On January 31, HSG was supposed to have in place the annual bank guarantee, now reduced from the initial $20 million to $10.52 million.

Palmer contacted Knights Members Club chairman Nick Dan, asking for an extension, explaining it would save the Knights $500,000 in bank fees.

HSG was given a revised deadline of March 31.

On March 15, I sat down with the source mentioned at the start of this story and he explained the ramifications of what was likely to transpire if HSG did not comply.

It would be the beginning of the end.

His information prompted the Herald to run a front-page story two days later that revealed: “Nathan Tinkler’s ownership of the Newcastle Knights will be in jeopardy if he doesn’t renew a multimillion-dollar bank guarantee within the next fortnight.”

Typically, HSG insiders insisted the bank guarantee would be secured.

History shows that it wasn’t.

Then followed three months of crisis talks that reached a flashpoint on May 16 when, on the same day Tinkler appeared in ICAC to answer allegations he tried to bribe former Minister for the Hunter Jodi McKay and contributed to illegal political slush funds, a host of Knights players were not paid their monthly wages.

That breach prompted the NRL to declare: “The actions of the Tinkler-controlled Knights towards players and staff are completely unacceptable and will not be tolerated . . . there is no place in our game for this kind of behaviour.”

Tinkler’s position was now clearly untenable and, a week later, he announced HSG would “have no further role in the Newcastle Knights” and would relinquish control “once all liabilities are paid”.

Last Saturday, Tinkler’s tumultuous tenure officially ended when NRL chief executive Dave Smith announced the governing body was taking interim control of Newcastle’s NRL franchise.

With $5.1 million in the coffers, leftover from the bank guarantee Tinkler forfeited after a portion of an estimated $20 million in liabilities were paid, Smith assured Knights fans their reborn club had the capacity to become one of the “top tier” outfits in the competition.

The Herald’s front and back page coverage of the sometimes rocky fortunes of the Newcastle Knights under the Hunter Sports Group.

In the process, the members club were left with some token shares and the capacity to nominate a “community director” to the new seven-person board.

The only consolation was that they got to keep their $1.

Tinkler, who recently announced he had sold Patinack Farm and invested in a $150 million mine in Queensland, said he intended to focus on his “core operations in resources and mining”.

In an interview published this week, he was quoted as saying: “I will categorically say there are no racing stables or football teams in my future and that Nathan Tinkler is just going to focus on what he knows and he thinks he’s pretty good at.”

And as we reflect on the Tinkler years, a time that will no doubt live long in the memory of Knights fans, the legacy left behind will polarise opinions.

But the one fact on which we all agree is that, at the very least, it was never boring.

– The Herald gave Troy Palmer the opportunity to comment on the Tinkler era and Hunter Sports Group’s withdrawal from the Knights but he declined.

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