Mining magnate Nathan Tinkler has upped his offer to buy the Newcastle Knights to a staggering $100million.
Mr Tinkler has offered to guarantee the Knights $10million in sponsorship every year for the next decade and wipe clean their estimated $3million debt in return for the club’s NRL licence.
Just two months ago the businessman offered $10million to take over the licence, an offer rejected at the time by Knights chairman Rob Tew.
Mr Tew said last night that he would take Mr Tinkler’s new offer to a board meeting tomorrow night but that the board would also discuss other funding options for the struggling club.
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‘‘Our responsibility is to act in the best interests of our members,’’ Tew said.
‘‘I’m not sure this is the best proposal. We have had a number of interests since Nathan made the last offer public through the media.’’
In rejecting Mr Tinkler’s initial offer, Mr Tew demanded that the coal baron, who has an estimated fortune of more than $600million, guarantee the club’s projected sponsorship income for the next 10 years.
The Knights put that figure at $7million a year.
Under the new proposal, Mr Tinkler has committed to providing $10million a year.
In the unlikely event that the Knights lose all their sponsors after privatisation, it could be a $100million investment.
If the current sponsor levels remain, his contribution would be $30million, indexed to the consumer price index, in new capital over 10 years.
Tinkler Sports executive chairman Ken Edwards said the upgraded offer met all the Knights’ requirements and that the increase in sponsorship was not the limit of their commitment.
‘‘We are not capping ourselves at those numbers,’’ he said. ‘‘We will spend what it takes, within reason.
‘‘We have a business model in place we believe is achievable. The $10million is a number the Knights have asked us to guarantee.
‘‘We agreed with their request, as with the other changes we have made to the offer to make it acceptable.’’
Mr Tew rejected Mr Tinkler’s initial offer in November without taking it to the board because he did not think the deal was good enough.
Asked last night whether he approved of the latest proposal, he declined to comment.
Apart from the increase in guaranteed capital, the offer remains largely the same.
The Knights board have been investigating models of full or part privatisation for several years and have been in negotiations with Mr Tinkler for months.
If the Knights board endorses the proposal, it would be taken to the members for a vote.
A buyout would require the approval of 75per cent of members who chose to vote.
Mr Edwards said the Tinkler Group went public with its earlier offer to test public opinion.
‘‘The reason for doing that was to get some feedback from the community that we were on the right track,’’ he said.
‘‘Clearly we got a strong message from the community, and the Knights board got a strong message from the community, that this was a model that people wanted to see advanced and wanted to see in place.
‘‘We are not aware of any reason why this should be kept from members, and we understand it is the members who will make a decision on this.
‘‘That is the group we want to present the offer to and explain ourselves fully to.
‘‘If the board can’t agree to do that by Friday, then there is nothing more we can do with the board.
‘‘It will be really then up to the members . If enough members believe in it, it is up to them to call a special meeting.’’
For that to occur, 100 members must sign a petition to call a special general meeting 21 days later.
Mr Tinkler saved the Newcastle Jets A-League club from oblivion four months ago and plans to introduce the same community-based, not-for-profit model at the Knights.
‘‘This is not for profit in the context that if any money is made it is ploughed back into the development of junior rugby league in the Hunter Region and to the Knights,’’ Mr Edwards said.
‘‘For members it means the club will have a club which is structured properly and will have the funds to compete on and off the field with the other big clubs in the country.’’
Knights members would have control over the name, colours and location of the club and members would have the first right to buy the club from the Tinkler Group if it was offered for sale.
‘‘Nathan has done very well in business and is continuing to do well,’’ Mr Edwards said.
‘‘This a genuine attempt by Nathan to put back into the community in a really meaningful way, through families, through children and through sport.’’
The Tinkler Group has also held talks with the National Basketball League about reviving a team in the Hunter and is also keen for a return of national league netball.
‘‘Nathan wants to give the ability to all children growing up in the region to be able to aspire to playing sport at the highest level,’’ Mr Edwards said.
‘‘We want this city to be an international city, to be a city that has a can-do attitude, to host international events and a range of activities for men and women and boys and girls.’’