Making almost daily headlines are the financial woes of coal baron, Nathan Tinkler, as he faces the ever looming potential of bankruptcy. Tinkler, once reportedly the youngest billionaire in Australia, who was estimated to be worth more than AUS$1.1b, has seen his business aspirations disintegrate following the collapse of some of his high profile business interests; and now, these woes may have an impact on his sporting interests. According to the Sydney Morning Herald, Tinkler was once hailed as the ‘saviour’ of the NRL Newcastle Knights and became owner of the A-League Club, the Newcastle Jets. However it is now reported that the Australian Tax Office has made moves to liquidate and recover outstanding tax debts owed by both teams and their parent company, the Hunter Sports Group to the tune of $3.8m. But the problems for the parent company do not stop there, the Hunter Sports Group is also being sued by the NSW Government for over $600,000 in unpaid rent for the hire of Hunter Stadium. Tinkler’s horse breeding stud, Patinack Farm is also in financial trouble. The operations are estimated to be losing a reported $500,000 per week with Fairfax reporting that staff had gone without being paid, horses without being fed, and workers compensation and tax debts outstanding.
In response to the demise of the Newcastle Knights, NRL Interim CEO Shane Mattiske told the Telegraph that “there are a number of safeguards that were built into the original transfer of the licence of Hunter Sports that remain in place”. As was reported in the Courier Mail, it is understood in the Newcastle Knights case, a $20 million bank guarantee was part of the original Tinkler purchase. This offers some risk assurance for the Club. There has been recent conjecture in the media however regarding whether this issue has damaged the image and reputation of the Knights club. There is a risk that sponsors may not be willing to support the club while it is experiencing financial difficulty.
In the case of the Jets, no financial safeguards have been put in place. According to Ten News, such a risk was a reality for the Jets and further, the Football Federation of Australia. In 2011 Tinkler, having gained awareness that he had paid far more to purchase the Jets than other owners in the A-league, handed in the team’s A-league licence, leaving the league with a mere nine teams and forcing a loss of employment within the Jets’ staff. Combined with Tinkler’s recent sudden sacking of the Jets’ football advisory board, this action highlighted the fragility of sporting groups that are so dependent upon corporate support for their survival.