Will in debt Tinkler sell the Knights and Jets?

Chad Bennett Editor

By Chad Bennett, Chad Bennett is a Roar Editor

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    Portrait of Nathan Tinkler by sports caricaturist David Green

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    The imminent sale of Nathan Tinkler’s Patinack Farm horse racing empire might not come as a surprise to many, but what it means for Newcastle’s Knights and Jets clubs remains to be seen.

    Fairfax Media reported that Tinkler will attempt to sell his entire racing operation, including property and bloodstock, for a figure he hopes will be north of around $100 million by May 1st.

    But should foreign investment not be found within the next month, Patinack Farm would cease all racing and breeding operations if the business cannot be sold.

    Over the past 12 months the Tinkler Group has seen its fortune crippled crippled by a slumping resources market, with Tinkler revealing in the NSW Supreme Court that his company held debts of over $500 million.

    Australia’s youngest billionaire has been steadily offloading his assets and the future of Hunter Sports Group, through which Tinkler controls the Newcastle Knights and Newcastle Jets, could be next.

    Tinkler’s commitment to his pride and joy the Newcastle Knights will mean that he will hold out as long as possible before selling, but if he can’t resolve his financial situation soon the decision might no longer be his.

    The key to this situation will the relationship between the Tinkler Group and the HSG, and just what impact the ongoing decline of Tinkler’s mining operations will have on HSG.

    A $20 million bank guarantee was a condition of Tinkler privatising the Knights two years ago, and HSG have previously stressed the independence of HSG from Tinkler’s other business interests.

    But, as evidenced by the major sponsorship of Tinkler’s Hunter Ports company, much of HSG’s finances still depend on Tinkler and at the very least they would need to increase their level of external sponsorship agreeements in future.

    When contacted by The Roar, HSG were unable to provide comment on what the sale of Patinack Farm would have on the futures of the Knights and Jets.

    As they have done in the past, both the NRL and FFA will quickly move to ensure that the future of the respective clubs are safe in the wake of today’s news.

    With both governing bodies enjoying the cash flow provided by recently completed television deals, the ability to prop up a club in the short-term won’t be an issue.

    But owning a sports team in the NRL and A-League is a losing business but for a handful of clubs and in a regional market such as Newcastle it is hard to see buyers lining up at the door.

    When Tinkler arrived as the ‘white knight’ for the Jets in 2010 and Knights in 2011, he allowed the red-and-blue faithful to dream of a club with the ability to dominate their big-city rivals both on and off the field.

    If Tinkler can’t find a way to turn around his fortunes soon, Newcastle fans might need another saviour to step in.

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    The Crowd Says (6)

    • April 3rd 2013 @ 10:46am
      Johnno said | April 3rd 2013 @ 10:46am | ! Report

      Yes.

    • April 3rd 2013 @ 11:12am
      planko said | April 3rd 2013 @ 11:12am | ! Report

      Johnno I agree with you but unlike a public company we have no idea how bad his debt situation is. But it ain’t looking good.

    • April 3rd 2013 @ 11:23am
      Wayne said | April 3rd 2013 @ 11:23am | ! Report

      Of course he can’t “sell” the Knights. Under the purchase agreement the members have first right to purchase it back if he decides to offload it (or can’t continue to support it).

    • April 3rd 2013 @ 12:16pm
      mushi said | April 3rd 2013 @ 12:16pm | ! Report

      Also they aren’t really worth anything right.

      One thing is for certain they’ve lied on just about every occasion with regards to this

    • April 3rd 2013 @ 4:10pm
      Australian Rules said | April 3rd 2013 @ 4:10pm | ! Report

      Doesn’t the article provide the answer to its own question?

      By all reports, HSG has a $20M guarantee that protects the Knights in the event that Tinkler goes broke. Whether that extends to the Jets, I’m unsure. So the short answer is that the Knights will be fine.

      • April 3rd 2013 @ 5:01pm
        mushi said | April 3rd 2013 @ 5:01pm | ! Report

        What none of those reports ever said was the term or the conditions of the guarantee?

        Banks tend to to extend indefinite guarantees

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