Updated April 10, 2012 15:55:00
Billionaire mining magnate Nathan Tinkler has pulled the plug on his backing for A-League side Newcastle Jets, leaving the club in danger of not fielding a team for the 2012-13 A-League season.
Tinkler's Hunter Sports Group (HSG) said an "irrevocable breakdown in confidence of the current FFA management" to resolve a number of issues and $27 million in losses left it with no option but to return the club's licence to football's governing body.
HSG says those issues include the club's disputed $5 million acquisition fee, the Jason Culina insurance matter and a continued request to address what it calls the A-League's "unsustainable financial model".
But FFA chief executive Ben Buckley told Fox Sports that HSG cannot simply hand back its A-League licence.
"The Hunter Sports Group has a legally binding contract that goes through until June [30] 2020 to participate in the A-League and field a team in the A-League," he said.
"They do not have a right to hand the licence back and we expect them to fully commit and fully honour that contract.
"I would say to the Hunter Sports Group they need to renew that commitment, they need to honour their obligations and they need to make sure that the Newcastle fans are not let down."
Asked if the matter could end up in court, Buckley replied: "We have sought legal advice, we will be issuing a legal letter to Hunter Sports Group this afternoon.''
Buckley added he expected the Jets to continue to honour all player contracts.
The news comes just a week after the announcement of a new FFA-funded team to be based in western Sydney from next season.
It followed the official revoking of Clive Palmer's licence to the now defunct Gold Coast United.
"The FFA's financial track record is less than encouraging, with a variety of expansion clubs losing substantial money and closing, and the FFA recently confirming to fund a west Sydney team after club owners were strongly against the knee-jerk reaction," HSG chief executive Troy Palmer said.
FFA's plans for a 10-team league now appear to be thrown into chaos, with key broadcast rights negotiations in danger until a new owner can be found for the Newcastle club for the second time in less than two years.
Less than 18 months ago, Tinkler and HSG stepped in to rescue the ailing Jets and say they have pumped $12 million into the club.
HSG says the FFA's own report for the 2012 financial year cites losses in excess of $27 million, with similar losses forecast next financial year.
"As a keen Jets and football fan, this has been a tough decision and I am aware the impact this will have on members, players, coaches, fans and the entire football community," Palmer said.
"I am particularly saddened for members and supporters who have embraced our community model, which has been accepted in so many areas as a successful and unique way to engage the entire community and build the A-League brand.
"It is also frustrating to have invested so much time, energy and money to save the Jets for the community at short notice and then continually hit road blocks at the FFA."
Palmer said when HSG stepped in, the club was "insolvent, had only 500 members, diminishing crowds, minimal community engagement, no merchandise program and negligible corporate support".
"During the 2011-12 season, we believe we turned this around to be seen as leaders in all these areas," he said.
"Unfortunately, having lost confidence in the FFA management and its ability to find a resolution, it is clear we have no other option.
"It is about removing ourselves from an administration in which we have an untenable relationship."
Palmer confirmed in a press conference that the critical factor for the decision has been a lack of clear communication over the club's acquisition fee, despite HSG saying it attempted to organise numerous meetings on the issue.
"They declined our request to explain what other clubs paid in acquisition fees, why we were charged $5 million, why an FFA consultant was paid somewhere between $250,000 and $500,000 to secure our licence fee and where our payment was spent to the betterment of the A-League," he said.
"Having rejected our terms on every occasion, we had no confidence a consistent and rational explanation for the fee would be forthcoming, particularly after inflammatory media comments from the FFA," Palmer said.
Buckley said the FFA had met with HSG and had "countless'' meetings with Palmer.
"As recently as a few weeks ago we had a meeting scheduled, which was subsequently cancelled by the HSG and Troy Palmer. So I want to correct the record, because the constant assertions by Troy Palmer that we were not willing to meet is just nonsense."
Buckley also responded in a statement to the individual issue surrounding Culina and the A-League's private ownership model.
"The Jets know very well that the Jason Culina matter is subject to arbitration before an independent panel of arbitrators in accordance with the grievance procedure and that a hearing is scheduled," Buckley said.
"The issues surrounding the operating model of the league and its clubs were addressed just a fortnight ago when all clubs were shown a road map towards sustainability.
"In addition, the clubs will have a greater say through the Joint A-League Strategic Committee, which has equal FFA and club representation."
HSG said it would continue to pledge $1 million a year to a high-performance academy in the region to develop young players.
"This decision by the Hunter Sports Group is not about walking away from football and we will continue to meet and grow our local commitments," Palmer said.
"We will now invest in local junior talent and help reduce the burden on their families.
"We would rather proactively support youth and our local community at the expense of the huge wastage in the A-League."
Tags: a-league,
soccer,
sport,
newcastle-2300,
nsw,
australia First posted April 10, 2012 11:14:20
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