As the Newcastle Knights prepare for their first NRL finals appearance in seven years against South Sydney on Sunday, CEO Phil Gardner has revealed just how close the city came to losing its flagship footy club in 2017.
Gardner claims the Knights were on the brink of being relocated to Ipswich or Redcliffe in Queensland off the back of losses of $50 million over 10 years back in 2017 before Wests Group stepped in to take over the ownership.
In a wide-ranging interview with Toohey's News:The Podcast, Gardner, who is also Wests Group CEO, said the NRL lost $12 million in the space of three years after stepping in to prop up the Knights following the dramatic demise of controversial former owner Nathan Tinkler in 2014 and were only "a few weeks away" from taking the franchise north of the border.
"They came to us with the view that if you guys don't do something, the Knights would be relocated," he said.
"The club would become the Ipswich Knights or the Redcliffe Knights - one or the other. I think they were a couple of weeks away from that happening.
"They convinced me at the time that the NRL had basically run out of money and wouldn't be funding the club any longer."
With the backing of 93 percent of their voting members, Wests Group took sole ownership of the Knights towards the end of 2017 for the princely sum of $1 and have delivered an average profit of around $1 million a year in their first two years in charge in 2018 and 2019.
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Remarkably, despite the devastating effects of COVID-19 on the competition this season, Gardner is confident the club will still announce a small profit for 2020.
Gardner admitted the NRL erred in not genuinely negotiating a sale with Wests Group immediately after taking the licence back from Tinkler in June 2014.
"Lets just say they had a different view of the value than us," he said.
At the time, the NRL took the club to the marketplace with a $20 million price tag.
Not surprisingly, they didn't get any takers.
"They put an auction process in place and wanted us to be involved in the auction," Gardner said. "We said thanks very much but no thanks. That went on for some period of time and the losses for them kept accumulating.
"In three years, they invested $12 million before we eventually bought the licence for a $1. They'd have been far better off taking our offer of $1 three years earlier."
Off the back of their return to finals footy, Gardner says the club in a strong position moving forward.
"We recognise how important the club is to the town and we know how important the club and success on the field is to a lot of people," he said.
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