1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

A club bought on debt.

Discussion in 'Rugby League Forum' started by DSM5, Dec 13, 2011.

  1. DSM5

    DSM5 Well-Known Member 2016 Tipping Competitor

    9,997
    516
    Ratings:
    +516 / 0
    Interesting article in the weekends Financial Review on Tinkler's empire of debt. Worth noting that his purchase of the Newcastle Knights team was funded by a $23 Million dollar loan. If the loan was sourced from his usual source, the US hedge fund Farallon Capital Partners, then their usual rate is 15%. Tinkler's total net wealth is sitting atop a debt mountain. The Knights might just be in trouble if his attempt to merge Aston Resources and Whithaven Coal fall over due their declining share prices.
     
    • Like Like x 2
  2. arty

    arty Active Member

    219
    31
    Ratings:
    +31 / 0
    Hmmm...very, very interesting....
     
  3. the mauler

    the mauler Well-Known Member 2016 Tipping Competitor

    2,765
    1,139
    Ratings:
    +1,653 / 25
    I thought a was reading the Financial Review for a second. Had to double check i was on the right site! Lol
     
  4. mozgrame

    mozgrame Well-Known Member

    7,007
    3,013
    Ratings:
    +4,565 / 45
    There a not alot of people in Tinkler's tax bracket that are flushed with cold hard cash. Assets and debt almost equal out in the cases of most millionaires. If you could get a list of money owed vs money in the bank, most millionaires would appear to be in debt. Do you have a list of his assets and their net worth??
     
  5. The Who

    The Who Well-Known Member

    7,290
    2,227
    Mona Vale
    Ratings:
    +4,839 / 103
    Assets = Bennett and Uate
    Liabilities = Gidley
     
  6. mozgrame

    mozgrame Well-Known Member

    7,007
    3,013
    Ratings:
    +4,565 / 45
  7. DSM5

    DSM5 Well-Known Member 2016 Tipping Competitor

    9,997
    516
    Ratings:
    +516 / 0
    Mozgrame, the authors of the article state that his personal debts are in the vicinity of $450 Million dollars and very little of his empire is not mortgaged. It would be interesting if the members of the Knights knew that the money for the purchase of the football team came from a highly leveraged loan when they voted for his takeover. It's an interesting read for those who can get their hands of last weekends Fin.
     
  8. mozgrame

    mozgrame Well-Known Member

    7,007
    3,013
    Ratings:
    +4,565 / 45
    I would be very surprised if there would be many financial instituions out there that would willingly lend $23 million to someone, unless they were sure of getting either their money + 15% back, or equal amount back in forced sale of assets. $450 million in debt is fine, but what is his $ value? or what is his perceived income from the venture going to be? They must have faith that they will get their money back somehow or they would not have loaned him the money. I fully agree it is high risk lending and the knights fans should be a little anxious, but in Tinkler land, it's probably a drop in the ocean.
     
  9. DSM5

    DSM5 Well-Known Member 2016 Tipping Competitor

    9,997
    516
    Ratings:
    +516 / 0
    Moz, I was totally surprised to read the level of the interest rate. His positive dollar value is very hard to quantify, although he has a $6 million loan over his house and he borrowed the $20 Million to buy his private jet. It seems his major asset is a share in Aston Resources that was worth $695 Million (heavily mortgaged) in November. That asset has since lost nearly $160 Million (Source, FR Dec 10 -11). Tinklerland may be a short lived entity.
     
  10. mozgrame

    mozgrame Well-Known Member

    7,007
    3,013
    Ratings:
    +4,565 / 45
    I wonder what Aston Resources is and why it is bleeding so heavily? Is it being drained to pay other debts? Shareholders in Aston Resources should be the ones most concerned at the moment. It's hard to think the Knights would jump into bed with someone without thoroughly checking their financial stability. Desperation may have made the gamble look like shorter odds then they now appear.[hr]
    It is very interesting though. Keep digging DSM5. You've got me hooked now. :)
     
  11. vidmar

    vidmar Well-Known Member

    1,675
    250
    Ratings:
    +258 / 0
    I'm re-reading Brain Reades book "An epic swindle: 44 Months with a pair of cowboys" and the story behind Tinkler and Newcastle shows some similarities...and to be honest certainly encourages me in doing what I can so that our ownership group is accountable and that supporters have some avenue to have a say at board level of our club.

    "An Epic Swindle is the inside story of how Liverpool FC came within hours of being repossessed by the banks after the shambolic 44-month reign of American owners Tom Hicks and George Gillett. It is the tale of a civil war that dragged Britain's most successful football club to its knees, through the High Court and almost into administration.
    Players Steven Gerrard and Jamie Carragher tell of their anger at the broken promises, as well as their pain at watching loyal fans in open revolt. Manager, chief executive, board members, leading fans and journalists reveal the turmoil at a revered sporting institution run by two men at war with each other, who trampled Liverpool's cherished traditions into the gutter. No story sums up the naked greed at the heart of modern football quite like Hicks' and Gillett's attempt to turn a buck at Liverpool. No-one has had as much access to the truth, or tells it with as much passion, wit and insight as Brian Reade. An Epic Swindle is the riveting story of how close one of the great football clubs came to financial implosion."

    See the reviews here

    http://www.amazon.co.uk/Epic-Swindle-Months-Pair-Cowboys/dp/0857385992

    Another good book (if you can get it) that also gives a good insight to the running of a Football (round) team is "Floodlight dreams" by Ian Ridley

    (No similarities to any NRL teams are intended or implied....)

    http://www.amazon.co.uk/Floodlit-Dreams-Save-Football-Club/dp/1416511458/ref=sr_1_1?s=books&ie=UTF8&qid=1323754232&sr=1-1

    "The Southern League team of Weymouth FC were in dire straits: nearly half a million in the red, dogged by boardroom squabbles, a decrepit ground, falling turnouts and an end of season performance that saw them lose 5-1 to arch enemies, Yeovil Town. Join Ridley on his rollercoaster journey as he shows just what can be done with a dose of obsessive commitment and unstinting optimism. It's a story of political backstabbing and petty rivalry; of euphoric highs and personal pain; of a man that thought that it should be simpler. Who thought that football - that Weymouth - deserved better. Brilliantly observed, infused with Ridley's trademark wit and peppered with fascinating insights into the machinations of boardroom football, FLOODLIT DREAMS is a compelling journey into the hinterland of the beautiful game. "
     
  12. DSM5

    DSM5 Well-Known Member 2016 Tipping Competitor

    9,997
    516
    Ratings:
    +516 / 0
    Mozgame, my view is that a club full of old aged pensioners and other bogans from Newcastle would have been bedazzled by 'local lad' Tinkler. From what I remember reading, the then club president was against the Tinkler move and was himself moved on after the vote. Without the financial journalists, Angus Grigg and Jamie Freed, I would have had no idea that Tinkler was so highly leveraged, even into Aston's chairmanship, (without disclosing his shares had been pledged for security over his loans). Tinkler's private company, Broadwalk Resources, is loaded with almost $100 million in debt. Its borrowings exceeded assets as of June 30th. I don't remember reading of any of this around the time he was seen as the white knight up in Newcastle, so the average club person wouldn't have had any idea where the money was coming from. Why would he consider buying a leagues club a good investment? Ego perhaps? Anyway this is more fun than discussing 'who was our best water boy in the modern era'.
     
    • Like Like x 1
  13. Dan79

    Dan79 Active Member

    519
    71
    Ratings:
    +71 / 0
    He did buy the knights as an investment. But you are looking at it the wrong way. I live in Newcastle ( no not a Bogan). Tinkler owns the knights, jets and the basketball team (he wants to bring back the falcons I think..)
    He did it all for a reason. If the town sees him as the white knight, he thinks he can leverage there support for his coal business. He wants to build his own coal loader. It will cost him some money but the rewards could be huge
     
  14. DSM5

    DSM5 Well-Known Member 2016 Tipping Competitor

    9,997
    516
    Ratings:
    +516 / 0
    Probably right, but where he wants his built is on the wrong side of the Hunter. I agree, he sees himself as the white knight and will use that cudos as a way of leveraging what he wants. I didn't suggest that all Novocastrians are bogans Dan79, just the ones in the club who voted for his proposal. I can't actually see the Knights being such a sound investment given his borrowings to do it, so you're probably correct in your assessment of his longer term motives.
     
  15. Dan79

    Dan79 Active Member

    519
    71
    Ratings:
    +71 / 0
    The mans a gambler. He made his first million on taking a punt. It won't always pay off for him
    His proposed loader is not far from an existing coal loader. But his lease stated it couldn't be used as a coal loader, so will be interesting to see him buy his way around that.
    There are a whole lot of bogans in Newcastle. But most are up the valley. So I don't take offence.
     

Share This Page