DIEHARD
07-12-05, 11:35 AM
Wests Newcastle and Knights announce commercial partnership
The commercial partnership between Wests and the Coal & Allied Newcastle Knights was officially announced today.
The signing of the Memorandum of Understanding by the Chairmen of the two organisations will help to remove the shadow of financial hardship that has hung over the Knights since they entered the national rugby league competition in 1988.
The commercial partnership aligns one of the State?s most successful and largest registered club groups with one of the most recognisable brands in Australian sport.
Wests Chairman, Kevin McDougall said it was an important step for the Group which involved every aspect of the arrangement being put under the microscope to satisfy his membership.
He said that the Board and management had been most diligent in assessing the proposition which was put forward by the Knights in June this year.
?The over-riding consideration has been that the Knights represent a measure of community pride and aspiration unrivalled in the Hunter community.
?From the outset of official discussions the Board and management of Wests has been at pains to protect the integrity and survivability of the Knights brand, and put in place a structure, strategy and resources to build it into Australia?s most successful and recognisable sporting organisation.
?Importantly, the Hunter community continues to own the Knights as its team.
?The deal we have signed today clearly states the commitment of the Knights and Wests to a commercial arrangement over the next 12 years.
?It guarantees a measure of financial stability and sets out an organisational structure that will allow the football club to prosper through access to increased professional management of commercial operations, including the management of EnergyAustralia Stadium.
Knights Chairman, Mike Tyler said that his Board had equally faced difficult decisions but in the end the over-riding factor was to equip the Knights with the financial strength, resources and skills to take a pre-eminent position in the National Rugby League.
?The Knights? history is an incredibly proud and successful one, but for too long we have been forced to provide limited resources to our football, marketing and administrations operations,? he said.
?Through this partnership, Wests will use its considerable expertise to enhance our commercial operations, providing the club with solid financial security, which has been missing during the club?s first 19 years.
?I believe the Knights Board had a responsibility to our supporters, the community, our players and youth under development for the future, as well as the corporate supporters who have stood behind the Knights during some difficult times, to negotiate a way forward to a more secure future.
?Wests? contribution to the community is already well-known. However, its foresight and genuine willingness to work towards a successful outcome has been the hallmark of discussions.
?I know Knights fans will see this partnership as overwhelmingly positive and a natural fit between two organisations with local membership, community ownership and rugby league foundations.?
?Clearly, there is only one organisation with the record of service to the community, the track record of success and a desire to protect the Knights brand. That is the Wests Group.
Wests Chief Executive Officer, Phil Gardner said the commercial partnership with the Knights laid down a number of key principles in its negotiations. These were:
* Secure for the Knights an extension of the lease on EnergyAustralia Stadium.
* Increase the Knights? returns from the operation of EnergyAustralia Stadium.
* Identify operational synergies between the Knights and Wests to reduce duplication and reduce costs to the Knights.
* Secure benchmark training facilities for the Knights elite group players.
* Increase the Knights ability to attract, retain and leverage sponsorship income.
* Continue to lobby for increased facilities for EnergyAustralia Stadium from the State and Federal Governments.
* Convert Wests existing sponsorship into an underwriting arrangement capped at $1 million a year.
* Explore opportunities to develop a registered club within the EnergyAustralia precinct and develop other business opportunities beneficial to both organisations.
Therefore, the MOU signed by Wests and the Knights today involves the following:
1. An undertaking to the NSW Government that if it extends the lease of the Knights Football Club for a period of 10 years, Wests will guarantee the Knights? ability to pay the lease fees from Stadium and Knights Football Club commercial operations. Wests will manage those operations on behalf of the Knights on a cost recovery basis. The Knights will agree to a set down with the percentage of other revenue agreement paid annually from its operations. As such, all surpluses from the Stadium will go to pay the lease fees and to fund football operations.
2. To drive operational synergies, it is proposed to merge the Wests and Knights commercial staff to create a larger team that can share resources and through scale, drive a better outcome. The cost to the Knights will be capped at the current cost of those staff transferred to Wests, indexed by CPI annually over the term of the agreement.
3. Wests will make its elite training facilities at Balance Health Club available to the Knights free of charge.
4. Wests will create a Sponsorship and Marketing Committee comprising five representatives, with three persons nominated by Wests and two from the Knights, to develop with their staff the marketing and sales budgets and to oversee the performance of the marketing and sales staff to budget. These budgets will form the basis of the football budgets when added to the NRL grant.
5. The Knights will form a Football Committee, comprising three persons nominated by the Knights and two from Wests, to oversee football operations, set an operational budget and ensure performance across the department, on and off the field.
6. Wests will underwrite that budget up to $1 million annually.
7. Wests will review all EnergyAustralia Stadium operations with the Knights and other stakeholders to determine how the operation of the facility can be improved. Any capital injection by Wests would be recovered before any surplus is directed to the Knights Football Club. All works would be agreed between the Knights? and Wests? Boards and the Hunter International Sports Centre Trust before any action is taken.
8. To review the possibility of a registered club joint venture at the precinct and seek agreement from all three stakeholders. The current ISC Club would be merged with Wests to facilitate the development of that club with agreed profit sharing between the parties, given the substantial capital required for such a venture.
9. Wests and the Knights at all times will work in good faith to progress the
business interests of the Knights Football Club and Wests Group.
Source: http://www.newcastleknights.com.au
The commercial partnership between Wests and the Coal & Allied Newcastle Knights was officially announced today.
The signing of the Memorandum of Understanding by the Chairmen of the two organisations will help to remove the shadow of financial hardship that has hung over the Knights since they entered the national rugby league competition in 1988.
The commercial partnership aligns one of the State?s most successful and largest registered club groups with one of the most recognisable brands in Australian sport.
Wests Chairman, Kevin McDougall said it was an important step for the Group which involved every aspect of the arrangement being put under the microscope to satisfy his membership.
He said that the Board and management had been most diligent in assessing the proposition which was put forward by the Knights in June this year.
?The over-riding consideration has been that the Knights represent a measure of community pride and aspiration unrivalled in the Hunter community.
?From the outset of official discussions the Board and management of Wests has been at pains to protect the integrity and survivability of the Knights brand, and put in place a structure, strategy and resources to build it into Australia?s most successful and recognisable sporting organisation.
?Importantly, the Hunter community continues to own the Knights as its team.
?The deal we have signed today clearly states the commitment of the Knights and Wests to a commercial arrangement over the next 12 years.
?It guarantees a measure of financial stability and sets out an organisational structure that will allow the football club to prosper through access to increased professional management of commercial operations, including the management of EnergyAustralia Stadium.
Knights Chairman, Mike Tyler said that his Board had equally faced difficult decisions but in the end the over-riding factor was to equip the Knights with the financial strength, resources and skills to take a pre-eminent position in the National Rugby League.
?The Knights? history is an incredibly proud and successful one, but for too long we have been forced to provide limited resources to our football, marketing and administrations operations,? he said.
?Through this partnership, Wests will use its considerable expertise to enhance our commercial operations, providing the club with solid financial security, which has been missing during the club?s first 19 years.
?I believe the Knights Board had a responsibility to our supporters, the community, our players and youth under development for the future, as well as the corporate supporters who have stood behind the Knights during some difficult times, to negotiate a way forward to a more secure future.
?Wests? contribution to the community is already well-known. However, its foresight and genuine willingness to work towards a successful outcome has been the hallmark of discussions.
?I know Knights fans will see this partnership as overwhelmingly positive and a natural fit between two organisations with local membership, community ownership and rugby league foundations.?
?Clearly, there is only one organisation with the record of service to the community, the track record of success and a desire to protect the Knights brand. That is the Wests Group.
Wests Chief Executive Officer, Phil Gardner said the commercial partnership with the Knights laid down a number of key principles in its negotiations. These were:
* Secure for the Knights an extension of the lease on EnergyAustralia Stadium.
* Increase the Knights? returns from the operation of EnergyAustralia Stadium.
* Identify operational synergies between the Knights and Wests to reduce duplication and reduce costs to the Knights.
* Secure benchmark training facilities for the Knights elite group players.
* Increase the Knights ability to attract, retain and leverage sponsorship income.
* Continue to lobby for increased facilities for EnergyAustralia Stadium from the State and Federal Governments.
* Convert Wests existing sponsorship into an underwriting arrangement capped at $1 million a year.
* Explore opportunities to develop a registered club within the EnergyAustralia precinct and develop other business opportunities beneficial to both organisations.
Therefore, the MOU signed by Wests and the Knights today involves the following:
1. An undertaking to the NSW Government that if it extends the lease of the Knights Football Club for a period of 10 years, Wests will guarantee the Knights? ability to pay the lease fees from Stadium and Knights Football Club commercial operations. Wests will manage those operations on behalf of the Knights on a cost recovery basis. The Knights will agree to a set down with the percentage of other revenue agreement paid annually from its operations. As such, all surpluses from the Stadium will go to pay the lease fees and to fund football operations.
2. To drive operational synergies, it is proposed to merge the Wests and Knights commercial staff to create a larger team that can share resources and through scale, drive a better outcome. The cost to the Knights will be capped at the current cost of those staff transferred to Wests, indexed by CPI annually over the term of the agreement.
3. Wests will make its elite training facilities at Balance Health Club available to the Knights free of charge.
4. Wests will create a Sponsorship and Marketing Committee comprising five representatives, with three persons nominated by Wests and two from the Knights, to develop with their staff the marketing and sales budgets and to oversee the performance of the marketing and sales staff to budget. These budgets will form the basis of the football budgets when added to the NRL grant.
5. The Knights will form a Football Committee, comprising three persons nominated by the Knights and two from Wests, to oversee football operations, set an operational budget and ensure performance across the department, on and off the field.
6. Wests will underwrite that budget up to $1 million annually.
7. Wests will review all EnergyAustralia Stadium operations with the Knights and other stakeholders to determine how the operation of the facility can be improved. Any capital injection by Wests would be recovered before any surplus is directed to the Knights Football Club. All works would be agreed between the Knights? and Wests? Boards and the Hunter International Sports Centre Trust before any action is taken.
8. To review the possibility of a registered club joint venture at the precinct and seek agreement from all three stakeholders. The current ISC Club would be merged with Wests to facilitate the development of that club with agreed profit sharing between the parties, given the substantial capital required for such a venture.
9. Wests and the Knights at all times will work in good faith to progress the
business interests of the Knights Football Club and Wests Group.
Source: http://www.newcastleknights.com.au