Titans were on verge of abyss

[DIEHARD]

The NRL’s financial takeover of the Gold Coast Titans saved the club from collapse, according to a report issued

THE full extent of the Gold Coast Titans’ crippling financial status has been revealed with the NRL tipping in $3.6 million in just three months to save the club from collapse.

The Titans ultimately succumbed to financial struggles last month and placed into voluntary administration, allowing the NRL to take over ownership and secure a long-term future.

A report by administrators Rodgers Reidy, released to creditors this week, outlined a number of alarming finance issues, including:

* The club posted a $4.9m loss for the 12 months until the end of the 2014 season.

* The NRL issued $2.35m in “emergency funding” between September and December last year and paid two monthly club grants in advance totalling $1.28 million in the same period.

* The club had $246,403 cash in bank accounts, of which only $68,092 was recovered by administrators due to eight finance leases for motor vehicles.

* The greatest asset was “goodwill” valued at $10.6 million.

* Owed the Australian Taxation Office $273,671.

The figures paint a bleak picture of just how close the Titans were to folding before the NRL intervened on February 24.

The Titans have been battling financially for a number of years but it was a snowball of revenue-slashing factors that sent it to the brink, according to the report.

An inability to sign replacement and new sponsors for 2015 following the conclusion of contracts with iSelect and Coral Homes severely dented cash flow as well as an increase in contra to cash sponsorships.

High Cbus Super Stadium hiring costs – in the vicinity of $2 million-a-year – also contributed along with a decline in membership and corporate hospitality revenue.

The club’s operating costs out of its former Robina headquarters – believed to be $600,000-a-year – were also listed as a financial burden.

The Titans now operate out of the council chambers at Bundall and Pizzey Park fields and are negotiating a more cost-effective stadium deal.

The team will play its 200th NRL match against Cronulla today and CEO Graham Annesley said it had made moves to become financially sustainable.

“It’s no secret the club was losing money otherwise we wouldn’t have had to endure what we’ve just been through,” he said.

“Losses are not unusual in professional sport as many clubs across all codes have traditionally relied heavily on external funding through licenced clubs or private investment.

“However, the future is looking much brighter through the stability and certainty provided by the NRL’s backing.

“Over recent months we’ve stripped a lot of costs out of the business. We’re renegotiating the stadium deal which we anticipate will be a good outcome for us.

“We’re also in the process of aggressively trying to rebuild our revenues by selling our available sponsorship and corporate opportunities.

“When those things normalise we’ll be very close to a sustainable business model.

“There’s been a lot of changes made to stabilise the club and the current restructure is good news as it will provide the platform for future growth and success.”

Only two clubs in the NRL, Brisbane and South Sydney, are profitable with the governing body providing each club $7.55m in grants last year.

According to ASIC documents, the Titans’ cross-code rivals Gold Coast Suns received $16.5m in funding from the AFL last season and posted a profit of just over $1m.

Powerhouse club Collingwood received $8m in grants from the AFL.

The Titans and Suns are now operating under similar ownership models with the governing bodies sole shareholders of the clubs.

The NRL said it provided the emergency funding to keep the club afloat while a long-term survival strategy was divised

“The funding was provided to ensure the club continued to operate while the shareholder funding position at the club was resolved,” a spokesman said.

“The NRL made it clear that one of the reasons it took control of the Titans was because of the legacy issues which were making it difficult for the club to be financially viable.

“The NRL is now working through those issues with the new board to make the club financially secure over the long term.”

Through the deed of company arrangement, the NRL has proposed to reimburse the majority of creditors 100 cents in the dollar to not leave local businesses and supporters out of pocket.

A creditors meeting will be held in Surfers Paradise on Tuesday where the DOCA will be voted on.

http://www.goldcoastbulletin.com.au/sport/nrl/

[Toads]

According to ASIC documents, the Titans’ cross-code rivals Gold Coast Suns received $16.5m in funding from the AFL last season and posted a profit of just over $1m.

If this is true. Good luck to the AFL propping this up for years to come..

Through the deed of company arrangement, the NRL has proposed to reimburse the majority of creditors 100 cents in the dollar to not leave local businesses and supporters out of pocket.

This should go some distance in attracting support from some local businesses and/or creditors in investing/re-investing into sponsorship. It'd be great to see some of those names back that the Titans attracted in their inaugural year. Win win for all concerned.

[DIEHARD]

This should go some distance in attracting support from some local businesses and/or creditors in investing/re-investing into sponsorship. It'd be great to see some of those names back that the Titans attracted in their inaugural year. Win win for all concerned.

I agree well done to the NRL, doing the right thing and righting wrongs. They deserve a lot of credit.

[Titanic]

The people who rubbish Dave Smith don't know too much about business … he's done a good job and you'd bet he had to fight the traditionalists to get that deal across the line. I wouldn't be counting on too many of those creditors signing up again though … they are a mean-spiritied lot usually anyway.

[TitansFan92]

I must say after reading the full report I wish I could say I am shocked but i'm not. Proper financial records were not kept and I am surprised at how little money there was in the bank accounts. I am surprised the NRL didn't step in sooner. Searle was just running the club into the ground and didn't give a ****.

[Toads]

He (Searle) probably did give a ****. It probably more of a case his reputation/credibility and the way business was conducted wasn't working for him anymore.

Which is a shame. Because it was hard to fault him leading up to our inaugural year and a year or two thereafter. I will give him credit for the early years.