Expansion Another Gold Coast team in peril, potential good news for the Suns?

[AngelEyes]

It's sad to see any sporting side collapse regardless of where they are or what sport they play.

I don't think the NRL will save the Gold Coast Titans especially with unconfirmed reports saying that debt is $35m and that the debt is intertwined amongst most of the Titans entities. Realistically, the Titans are going to be hard to save especially with some estimates saying that the Centre of Excellence may only be worth $11-17m now with the property crash on the Gold Coast. Realistically, they will find it hard to sell too as who wants to buy a facility (that is contractually only to be occupied by the Titans) when the Titans may not exist in two years as you may have an expensive asset that no one can rent. This is a huge issue for an possible investor as the uncertainty is huge.

Its sad and its going to be very interesting to how the NRL handles this. I don't know if just creating a new team on the GC will solve their issues. The debt will be gone but the GC's problems with supporting a team will still exist and when crowds are low, the last thing you need is to screw your fan base by starting a new team.

 

[jd1991]

whilst that is absolutely impossible to know without going through their books, it would extremely rare that they weren't losing a stack as a sporting club.

There would no doubt be debts carried by this building for the rugby club, it is the only thing that guy can save his credibility with right now. Hasnt this guy already been exposed for cooking the books in relation to their crowds? Always just over 10K it seems.

As of last season, I found out 2 NRL teams made a profit - the titans have apparently the worst stadium deal in Australian sport, get poor crowds and dwindling, have an arm which is basically insolvent and no leagues club out the back - and you honestly believe they are financially ok?

But, who cares. This is where the AFL is just on a total other level to anybody else in this country. The time, effort, resources and management put in place with expansion is probably 100x that of it's nearest competitor.

The AFL has claimed the suns made a profit last season - all due to a fantastic stadium deal.

The AFL know what they are doing, no matter which way you slice it up.

I am basing my observation on what Searle said (whether thats the truth or not - I wouldnt have a clue). Also the way the NRL is reported as having back up plans sounds like RL on the GC is sustainable its just a very bad investment that is dragging it down. - But again I may be reading to much into that. The validity of what I read may or may not be correct.

 

[SM]

Once the AUD comes down again to its normal 70-80c range, the tourists will flock back and things will be thriving again on the GC.
The town lives and breathes tourism so as soon as that picks up again people will flood back to the GC.
The tourists obviously wont go to the games but all the young people the industry hires certainly will.

Sorry, 'normal 70-80c' range? What exactly defines that as the normal range? Because that's where it was pre-GFC?

 

[fishardansin]

Maybe the NRL could force the Titans to relocate to Arden St.

 

[PumpyChowdown]

Gold Coast teams in all sports never do well whether it be soccer, basketball, rugby, and I'm guessing AFL. Apparently more younger people are starting to come to Gold Coast since there are starting to get more businesses and job opportunities. That would help crowds. Atm though most of Gold Coast are just tourists and old people that live there for retirement.

Why is it that anyone south of the Tweed thinks that this is gospel? I see it repeated time and time again here on BF and it drives me up the wall. The VAST majority of Gold Coast population is young families. Typical middle Australia, big mortgage, couple of kids and a dog.

Gold Coast City Council in 2010 had a population of 528,000. If you take in the Tweed and surrounding areas it's well over 600,000 and growing. It's a massive city now.

 

[bradrowe#32]

Why is it that anyone south of the Tweed thinks that this is gospel? I see it repeated time and time again here on BF and it drives me up the wall. The VAST majority of Gold Coast population is young families. Typical middle Australia, big mortgage, couple of kids and a dog.

Gold Coast City Council in 2010 had a population of 528,000. If you take in the Tweed and surrounding areas it's well over 600,000 and growing. It's a massive city now.

Name of dog please?

 

[zero]

That's because a premium membership cost $550. - The highest in the league by a mile. It's a terrible deal if you're a fan!

yeah whats the deal with that? i thought we were supposed to be subsidising everything and keeping it super cheap up on the coast for the first few years?

 

[Tas]

That was my first thought. AFL might be able to buy it cheap and set up a QLD academy. That would really sting the NRL.

Wait for the liquidator to sell it off at fire sale rates.

 

[Covertackle]

ipswich or redlands. these are the places NRL has a stronghold, and should move the GC franchise if need be.

i favour ippy though. they can draw spectators from the darling downs, bris, south and east bris, toowoomba, as well as ipswich.

the redlands bombers AFL side at redlands are getting stronger. another reason NRL shouldnt attempt it here. the redlands rugby league club are pushing for it. but i dont like their chances.




.

 

[Tas]

Sorry, 'normal 70-80c' range? What exactly defines that as the normal range? Because that's where it was pre-GFC?

We use a floating exchange regime so our exchange is based on demand. Our currency is in much higher demand because our interest rates are higher than other safe economies and the other major western economies are currently tanking spectacularly.

There is a lot of demand for our currency atm but we generally do not have the volume of business activity to support a massive investment in the country, we don't usually attract a lot of long-term foreign investment.

However, in saying that, I don't see where things will change radically in the short-term. USA and EU are still languishing badly and we are somewhat insulated from their plight due to our link with the growth of China. It may be several years until things return to 'normal'.

Irrespective when it happens, it will happen one day. Our nation is too small, people are small-minded in terms of where they want to see the country head, eventually we will become the minnow again and our country's exchange rate will be used again by foreign investors for short-term gain like it has been used prior to the GFC which means we will end up with a volatile exchange which makes long-term investors nervous.

We need to grow and be something more than a primary producing/raw resource whoring small nation if we want to be a significant nation economically. The only reason we aren't in the gutter with the other western nations is because china is strip mining our country so they can build cities and produce finished goods, we are on a path that leads nowhere.

 

[finders]

If the Titans do fold I doubt it would make much difference in terms of support for the Suns, but with regards to sponsorship it might help. But then again they might just see sport on the GC as a liability and not want to invest.

But after the arrogant Searle had to say about the Suns earlier on I hope it fails

http://www.theaustralian.com.au/afl-needs-gold-mine/story-e6frepf6-1111116410470

http://www.goldcoast.com.au/article/2008/04/09/9869_gold-coast-sport.html

http://www.couriermail.com.au/sport/nrl/titans-boss-slams-the-afl/story-e6frep7o-1111115652140

http://www.smh.com.au/news/league/titanic-turf-war-on-cards-as-gold-coast-cry-foul-over-afl/2006/07/20/1153166522030.html

Searle said the Titans' private ownership model, as opposed to the AFL's membership-based pursuits, was preferable for the region, and the AFL's failure to secure a lucrative stadium deal was a hindrance.

Say again? LOL Searle = more money the brains!

 

[Lord_Flashheart]

Searle said the Titans' private ownership model, as opposed to the AFL's membership-based pursuits, was preferable for the region, and the AFL's failure to secure a lucrative stadium deal was a hindrance.

Say again? LOL Searle = more money the brains!

I've never paid attention to him before to be honest but some of the rubbish he dribbles in these articles is borderline ridiculous. In regards to turf wars, there will be 3000 Gold Coast Mum and Dads missing out...really? Who talks like that, well except for politicians. It looks like he has been wrong on pretty much every count.

 

[zero]

http://www.couriermail.com.au/sport/nrl/federal-court-finds-gold-coast-titans-property-arm-prima-facie-insolvent/story-e6frep5x-1226308221024
Can someone with accountancy and/or legal experience (Tas im looking at you, mate) tell us what this stuff means?

This looks pretty fatal to me

As it emerged debts on the Titans group of companies has blown out to $35 million.....

Reed Constructions' can now move to liquidate the Titans' property arm at the next court hearing on April 20 - effectively giving the Titans property group less than 30 days to prove their solvency and avert collapse...

A further order was made that advertisment for the winding up application be taken out.....

It is understood the external accountants discovered the football club was in millions of dollars of debt to suppliers, including those that provide merchandise, catering and ground hiring.

It looks to me like Reed is going to be allowed to liquidate the Titans in a month, and anyone else who reckons they are owed money needs to get in on the court action now. Is that right?

The NRL is cash poor themselves, and unless they get out a loan against the value of the upcoming TV rights agreement, they wont be able to bail them out.

 

[The_Reaper]

http://www.couriermail.com.au/sport...-facie-insolvent/story-e6frep5x-1226308221024
Can someone with accountancy and/or legal experience (Tas im looking at you, mate) tell us what this stuff means?

This looks pretty fatal to me

It looks to me like Reed is going to be allowed to liquidate the Titans in a month, and anyone else who reckons they are owed money needs to get in on the court action now. Is that right?

The NRL is cash poor themselves, and unless they get out a loan against the value of the upcoming TV rights agreement, they wont be able to bail them out.

Clive Palmer likes Rugby League and the Gold Coast...

 

[kane249]

Clive Palmer likes Rugby League and the Gold Coast...

Depends if the CIA blocks the sale to him or not though

 

[Tas]

http://www.couriermail.com.au/sport/nrl/federal-court-finds-gold-coast-titans-property-arm-prima-facie-insolvent/story-e6frep5x-1226308221024
Can someone with accountancy and/or legal experience (Tas im looking at you, mate) tell us what this stuff means?

This looks pretty fatal to me

It looks to me like Reed is going to be allowed to liquidate the Titans in a month, and anyone else who reckons they are owed money needs to get in on the court action now. Is that right?

The NRL is cash poor themselves, and unless they get out a loan against the value of the upcoming TV rights agreement, they wont be able to bail them out.

Once you are insolvent you are meant to stop trading, knowingly trading while insolvent can lead to civil and criminal proceeding against the executives.

Creditors can seek to get administrators appointed, similar to the Fiztroy fiasco, and they will attempt to either get the business operational or if they do not feel it can be done then they will attempt to liquidate the business and return as much as possible to the creditors.

People usually hold out for fire sale valuations of property whenever a business is publicly gone south like this one has, they wont get remotely close to market value for the assets of the property arm now, time isn't on their side.

This is problematic even for the Titans, i am sure their creditors are not going to be going out on a limb to be providing or extending credit, it will put the squeeze on their main business. They should cut back anything they can realistically get away with cutting back and try and survive this period or it could be fatal.

The problem with these things is that the damage is usually significantly more than what is public, which would be the reason the NRL would be thinking of cutting their losses rather than salvage the business.

 

[RectiationD]

Unlike the NRL, the AFL have the money to keep it sustained.

 

[Lord_Flashheart]

Once you are insolvent you are meant to stop trading, knowingly trading while insolvent can lead to civil and criminal proceeding against the executives.

Creditors can seek to get administrators appointed, similar to the Fiztroy fiasco, and they will attempt to either get the business operational or if they do not feel it can be done then they will attempt to liquidate the business and return as much as possible to the creditors.

People usually hold out for fire sale valuations of property whenever a business is publicly gone south like this one has, they wont get remotely close to market value for the assets of the property arm now, time isn't on their side.

This is problematic even for the Titans, i am sure their creditors are not going to be going out on a limb to be providing or extending credit, it will put the squeeze on their main business. They should cut back anything they can realistically get away with cutting back and try and survive this period or it could be fatal.

The problem with these things is that the damage is usually significantly more than what is public, which would be the reason the NRL would be thinking of cutting their losses rather than salvage the business.

I am assuming though that this is only applicable to the Property arm at this stage correct?

The Titans as a sporting team should still be able to continue (although I guess it depends on how intertwined some of their financial concerns are)

 

[10987654321]

I am assuming though that this is only applicable to the Property arm at this stage correct?

The Titans as a sporting team should still be able to continue (although I guess it depends on how intertwined some of their financial concerns are)

Yep, it depends on how much debt is held by the Titans and whther they are seperate entities. Although they won't have a training facility or offices if the Centre of Excellence goes. I'd imagine the NRL wil let them fold and take the licence of them if it comes to that, then give it to someone else or run it themselves. The Titans aren't doing well but the financial problems are all to do with the property arm.

 

[zero]

Once you are insolvent you are meant to stop trading, knowingly trading while insolvent can lead to civil and criminal proceeding against the executives.

Creditors can seek to get administrators appointed, similar to the Fiztroy fiasco, and they will attempt to either get the business operational or if they do not feel it can be done then they will attempt to liquidate the business and return as much as possible to the creditors.

People usually hold out for fire sale valuations of property whenever a business is publicly gone south like this one has, they wont get remotely close to market value for the assets of the property arm now, time isn't on their side.

This is problematic even for the Titans, i am sure their creditors are not going to be going out on a limb to be providing or extending credit, it will put the squeeze on their main business. They should cut back anything they can realistically get away with cutting back and try and survive this period or it could be fatal.

The problem with these things is that the damage is usually significantly more than what is public, which would be the reason the NRL would be thinking of cutting their losses rather than salvage the business.

what about the differences between the arms of the companies? its pretty clear that the the football club has been paying the debts of the property arm, and it seems like the whole place has run up debts to heaps of different companies.

the article says the whole thing is intertwined, will the titans actually be able to crack off the property arm and let it go under or will the club be dragged down with it?

 

[Tas]

I am assuming though that this is only applicable to the Property arm at this stage correct?

The Titans as a sporting team should still be able to continue (although I guess it depends on how intertwined some of their financial concerns are)

As far as what has been reported, yes. It could negatively impact the parent though depending on the extent of the damage. While I believe their property arm is limited by shares, in terms of the extent of capital guaranteed, without knowing what exact agreements the Titans have made it is hard to tell from the outside looking in, but if the NRL is worried it could cripple the parent there might be some guarantees made by the parent.

For example, my club guaranteed our old social club's debt and when it hit the wall what was left unpaid after the assets were sold ended up as baggage for the club.

We will probably have to wait for the specifics of the Titan's situation. There are different levels of debt in terms of priority of being repaid, banks usually have first claim on anything recovered after employees and the tax office (if applicable) due to the nature of the agreements they have when lending money.

Seems the companies are lining up looking for unpaid debt before the company goes down the liquidation path, they know they are boned if it comes to that.

 

[The_Wookie]

I am assuming though that this is only applicable to the Property arm at this stage correct?

The Titans as a sporting team should still be able to continue (although I guess it depends on how intertwined some of their financial concerns are)

Media reportds suggest that NRL accountants have found issues with more than the property arm

 

[The_Reaper]

Media reportds suggest that NRL accountants have found issues with more than the property arm

The unsolvable problems however are with the property arm.

 

[Tas]

what about the differences between the arms of the companies? its pretty clear that the the football club has been paying the debts of the property arm, and it seems like the whole place has run up debts to heaps of different companies.

the article says the whole thing is intertwined, will the titans actually be able to crack off the property arm and let it go under or will the club be dragged down with it?

It can be, yes, they are different legal entities. The accountants would have to determine what has been paid by the parent and owed to the parent, but it is highly likely they have lost anything they have lent out to the subsidiary.

The major problem would be if the parent raised debt to help the property arm, ie if that money is gone and they are left holding the baby with the debt then that is something which could still burn the club after the property arm is wound up.

 

[Prince Imperial]

Searle said the Titans' private ownership model, as opposed to the AFL's membership-based pursuits, was preferable for the region, and the AFL's failure to secure a lucrative stadium deal was a hindrance.

Say again? LOL Searle = more money the brains!

It wasn't that long ago that he was being lauded as the messiah by many RL fans in part because of his attacks on Australian Football. Now we find out he's just Palmer-Lite and it's hard not to see some kinda of karma in all of this.