Australia’s peak body representing co-operatives expects the Knights community-ownership plan to be over-subscribed and says the NRL should give the proponents breathing space to get it off the ground.
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Business Council of Co-operatives and Mutuals chief executive Melina Morrison backed the Our Knights, One Chance group’s ownership model to turn around the club’s fortunes on and off the field.
“In a privately owned enterprise, you do something to make money. In a community-owned enterprise or co-operative, you make money to do something,” she said. “You get to prioritise sports objectives over financial objectives. What we find in the European setting, and in the UK now, that alone leads to greater sporting success.”
The Our Knights, One Chance group hopes to raise up to $20 million by issuing 40,000 shares at $500 apiece. No single owner can hold more than four per cent ($800,000) of the shares.
“The four per cent cap, why I like it is you’re spreading more of the total issue of shares between more people,” Morrison said.
“I think they’ve probably done this because they expect that there’s going to be a lot of people that will want, because they love the club, to chuck in lots of money, but they want it to be genuinely community-owned.
“I have absolutely no fear that they won’t be over-subscribed, and I think that’s what they know. My gut feeling is that they won’t have trouble raising the capital if people trust the proposal and the people proposing it.”
Morrison, who is from Tasmania and lives in western Sydney, said one of the benefits of member-owned sports clubs was stability.
“Historically, we see in a community-owned structure, if it’s well run – and it’s all about people – you get less volatility. In the case of an owner like Nathan [Tinkler], the club’s fortunes have followed Nathan’s business fortunes. Now how crazy is that? That’s absolutely mad.
“You’ve got to divorce the volatility of someone’s private enterprise dealings from . . . whatever is happening on the field, management, the coach.”
Morrison called on the NRL to give the proponents time.
“Give the community an opportunity to show that they can do it. Don’t race off and try to find another owner and undermine the community, but actually give it a genuine go.
“The NRL have got to put a window on it. They’re carrying the can. That’s unsustainable. Their imprimatur and a nod can go a long way. There’s nothing to be feared here.
“You can get a crowd-funding campaign going pretty quickly, but people still need a bit of time to find the resources.
“These people are business people. I don’t think this is some flaky, fly-by-night proposal. They’ve done a business plan and they know what they need.”
Morrison, who spoke at a public meeting in Newcastle when a group of Novocastrians was considering a fan buyout of the Jets A-League club, said community ownership was “in the Knights’ DNA”.
She said fan ownership would bring about a fundamental shift in the club-supporter relationship at the Knights.
“You get economic participation, and this is really important. My season ticket comes with skin in the game. I don’t just buy my season pass off the club. I’m actually a part-owner.
“You can say to your fans, ‘This is your club. We need 100 per cent turn-up through the turnstiles. And, by the way, we need every one of you to buy a kit for your kid as their birthday present this year.’
“You can actually dig deeper into the pockets of your crowd . . . the most highly motivated person is the person who wants to keep going to the game, and if they know their 500 bucks is going to build that war chest, absolutely.
“Because we haven’t seen this in Australia, perhaps it seems a bit unusual. If you think about it, it’s returning to the way sports clubs start. They start in the community.”
She cited Spanish soccer giants Barcelona and Real Madrid and NFL franchise the Green Bay Packers as examples of community-owned clubs who had become the pride of their regions.
“Sport, among a very few things, can galvanise the confidence of a community and have such profound impacts over time.
“Both Real Madrid and Barcelona are community-owned, and very much the pride of those regions is bound up by their teams. The economic and the social return to Green Bay must be astronomical.
“Because it involves peer-to-peer lending, it shows the ordinary citizen of Newcastle, ‘Hey, my neighbours care like I do. And together, caring enough, and pooling our capital, we’ve done this tremendous thing.’”
She said the Knights were part of the “civic life” of Newcastle, and businesses would be motivated to jump on board.
“There’s so many spin-off benefits. A fan-owned club can make decisions like procuring from local businesses. That could be one of their covenants. Local government can be a partner.
“There’s a huge value proposition in being a sponsor now: ‘The owners are local, they shop in my business, they bank at my bank. I want to tell them in a very, very clear way that I love their club, too.’”
