Not all is well at the Penrith Panthers leagues club, and we fear more sordid tales will come to light on top of these contributions from the Crikey readership.

The Tonsils connection

Problems at the Panthers don’t often register on the media radar. This is not surprising given that the Panthers are paying the Golden Tonsils between $100,000 and $500,000 a year to “promote the image, football teams, facilities and services of Penrith Panthers”. Lawsy and the Sharks, errr, Panthers, are locked into a 6-year deal terminating in 2005. How many more of these deals do the Panthers have?

As we’ve mentioned before, Lawsy rarely (if ever) says a bad word about the proliferation of pokies in NSW, notwithstanding that NSW has more pokies per capita than any state other than Nevada.

Merger mayhem

We opened up in mid-March with a report from a sole subscriber that the Panthers’ board election was cancelled due to alleged rorting at the recently merged clubs of Club Nova (Newcastle Workers Club) and Port Macquarie RSL.

Another anonymous sole subscriber gave us the warts and all version of the Port Macquarie merger saga:

“In early 2000, the Board of Port Macquarie RSL Club entered into amalgamation talks with the Penrith Panthers League Club. The amalgamation was ready to proceed until the Port Macquarie Board raised concerns as to Panthers’ true intentions. Amalgamation proceedings were then suspended.

It appeared that Panthers, instead of merging with Port Macquarie RSL Club, wanted to take over the Club by having the Commonwealth Bank (the Club’s bankers) assign the Club’s substantial debt to Panthers rather than Panthers paying out the debt as agreed to by both parties.

The board sought other financing options and found a local syndicate of investors ready to buy the club, thus keeping it in local hands.

Before this could happen, the board discovered that there was evidence that Panthers and the Commonwealth Bank had done a deal and that no matter what the members voted for – local ownership or amalgamation – the Bank was going to assign the debt to Panthers, as was their legal right. For any sale or merger to happen it had to be put to a vote by the members.

[CRIKEY: An interesting aside is that the Commonwealth Bank officer running the Port Macquarie club’s account is a former Panthers player. Not that we would ever imply that he would apply the squirrel grip to Port Macquarie to further the Panthers’ commercial interests. Never.]

It was at the first vote that the trouble began – this included bomb threats, property vandalisation and personal threats against board members. This all occurred because the Board recommended local ownership rather than an amalgamation with Panthers.

A vote did occur but the board was no match for Panthers and the members voted 70% in favour for amalgamation.

This story is fascinating and divided the town of Port Macquarie for some months.”

CRIKEY: This all sounds pretty extraordinary to us, but any doubts we might have had about the veracity of the story were quickly put to rest when we read extracts from NSW Hansard. (And if it’s been said in Parliament, it must be true, right?)

“Mr OAKESHOTT (Port Macquarie) [6.01 p.m.]: On 11 October, as a member of the Port Macquarie RSL Club, I attended an extraordinary general meeting at which more than 2,000 people were present. Without doubt that meeting emphasised the meaning of the word “extraordinary” in the phrase “extraordinary general meeting”. The meeting was called to decide the future of the management arrangements of the Port Macquarie RSL Club, in particular whether the club should amalgamate with Penrith Panthers Leagues Club or remain with a syndicate of 19 local investors. Only 10 minutes into the meeting there was a bomb threat, and the 2,000 members were asked to leave the building immediately. A suspect has been apprehended and will appear at court tomorrow in connection with the threat.

The personal property of a club member who spoke in support of the local management option in that 10 minutes was vandalised. Last Friday evening the office of the club’s chairman was ransacked. The family pet of the club’s general manager was tampered with. The proposed amalgamation has divided the local community and raised many issues of concern. Never in the time I have been the local member or in the time I have been the shadow Minister have I seen such activities in a club. Those activities warrant an immediate investigation in which the Department of Gaming and Racing certainly needs to be involved.

The Port Macquarie RSL Club plays a significant role in the life of the local community. It has 14,800 members, and employs 200 staff. It is the largest consumer of supplies within the area and, as such, utilises the services of many local organisations. The club has a long history of debt, one decision involving the moving of its premises. In 1994 the bank debt was $25 million and in 1998 it had increased to $41 million. There have been ongoing negotiations with the State Government and various banks to resolve a work-out deed. The reason the Department of Gaming and Racing should become involved is because of what seems to be a questionable relationship between the Commonwealth Bank and the Panthers Leagues Club.

Following the meeting on 11 October and the bomb threat, the club’s board of directors sought to reconvene a meeting to put strategies in place and to obtain the views of members concerning the future of the club. Unfortunately, the Commonwealth Bank aggressively declined to grant an extension of six weeks in which to make arrangements, and its deadline of 8 or 9 November stood. The Panthers and the Commonwealth Bank forced the hand of the local directors. I am concerned that the person at the Commonwealth Bank who is in charge of managing the debt is a former Panthers player. I regard that as a questionable relationship, and I hope that the Minister, through Ken Brown, the director-general, will investigate both the relationship and what is going on in Port Macquarie.

I ask for a value judgment on the future of Port Macquarie. We have heard only one of the three or four available options. We heard only one side of the story in the 10 minutes that Roger Cowan had to address the 2,000 members. We deserve to hear all sides; we certainly deserve to hear about the local option, to which I am personally attracted. I am concerned that that option is not coming forward. I ask the director-general to investigate the promises that have been made to upgrade the facilities of the Hibbard Sports Club. My understanding is that that promise cannot be fulfilled.

Mr FACE (Charlestown–Minister for Gaming and Racing, and Minister Assisting the Premier on Hunter Development) [6.05 p.m.]: I view the matters raised by honourable member for Port Macquarie with some concern. The department has kept a watching brief on the proposed amalgamation. I am aware that there was a vote to proceed with the amalgamation of Penrith Panthers Leagues Club and the Port Macquarie RSL Club. However, there appears to have been a change of heart. I am extremely disturbed to hear that attempts to have the issue openly discussed at a recent meeting had to be abandoned following a bomb scare. It is clearly not in the best interests of either the pro-amalgamation group or the anti-amalgamation group to have rational debate stifled by threats of violence.

The shenanigans at Port Macquarie over the past couple of weeks simply serve to strengthen my resolve to reform laws relating to club amalgamations. As honourable members would know, on 26 July I announced a package of changes, one of which involves significant controls over club amalgamations…

I am far from impressed by the way in which the Commonwealth Bank has behaved recently in a range of matters pertaining to clubs. I will ask the director-general to look in depth at the matters raised by the honourable member and if criminal matters are involved they will be referred to the police. I repeat that I am far from happy with the shenanigans at Port Macquarie, and they further steel my resolve to do something about club amalgamations to avoid the same sort of thing happening again.”

Merger megalomania

Not content with being Sydney’s biggest club, the Panthers are continually on the prowl for new acquisitions.

As of late last year they had no fewer than 9 targets on the horizon, and if the experience of Port Macquarie was anything to go by – where the existing chairman and general manager were going to get the boot if Panthers took control – the Panthers certainly aren’t keen at maintaining the status quo.

In the case of Port Macquarie, that position is perhaps defensible on the grounds of financial under-performance to the point where unsustainable debt levels have been built up.

But we’d be interested if there are any cases of the Panthers (or any large club, for that matter) riding roughshod over the interests of smaller clubs who may be performing well but are simply swamped by a bigger club.

Accounting practices that would make Enron blush

Following our report on the cancellation of the board election, another sole subscriber emailed us to say that his wife received the Panthers’ annual report on the 25th of February, yet the accounts were dated either the 27th or 28th of February as he recalled.

This sole subscriber says that the Panthers aren’t the only registered club which is more than a little tardy in lodging their annual accounts with ASIC – he tells us that most clubs’ AGMs are done and dusted well before the accounts are lodged.

The accounts themselves, which we are yet to lay our hot little hands on, are apparently a very sketchy document at best.

If anyone out there has a copy, we’d love to see it.

Security control practices that would make Star City’s bouncers blush

Clubs like Panthers tend to attract the highly combustible mix of patrons who enjoy a beverage or two and big, beefy crowd control patrons who enjoy the physical aspects of their means of gainful employment. A report comes to us from one sole subscriber – which we have no reason doubt, but equally, which we have not been able to substantiate – of said big beefy guys putting a patron into a coma.

AGM and EGM practices which would make Nick Whitlam blush

Our sole subscriber reports that he has trotted along to the odd Panthers AGM and merger EGM, and reckons they would be lucky if 50 people bothered to turn up. A stacking exercise would not be difficult by all accounts.

And in fact, that is exactly what happened when a vote was taken to approve the merger with the Mekong club.

An EGM was held and the vote was knocked back by the members. Later, another EGM was held which was stacked by the club to get the vote through.

Surprise, surprise, the vote got up on the second attempt.

A closed shop for incompetents, petty thieves and the unemployable?

Another sole subscriber writes:

“Clubs are often massively overstaffed. A jaundiced eye might say that clubs are run for the benefit of the lucky staff rather than the members. Some might say that this is corrupt but a lot of otherwise unemployable people carve out more or less useful careers for themselves. It’s a bit like Sanitarium/Adventist Hospitals or all these parent controlled Christian schools that are springing up at the moment – a lot of the people working in them (from my own knowledge) could not get a job anywhere else.

Our local Baptist Church Christian School, which is being hugely funded by Dr. Kemp’s largesse, employs about 5 guys from around here who never got on in their careers in the real world because their God-bothering, devotion to a God other than mammon and refusal to go down the pub made their colleagues uncomfortable. (I mean if you are a business and because of equal opportunity legislation have to employ raving queens or practicing Hindus, you can’t promote a God-bothering Puritan to be their supervisor can you?).

There is also petty corruption and a great deal of wastage in clubs. This is mostly caused by lack of competent supervision by the boards of clubs, if not their active participation. One example of this is in one club that I know where an otherwise respectable lady was able to work a scam involving the biscuits purchased by the club. It netted her about $40 per week. What can you do about it if you are the club manager? Not much.

The cops aren’t going to be interested and the grief of bringing a civil action wouldn’t be worth it given she is the widow of a war veteran, would get free legal aid etc.

The boards are often comprised of aged people with no business experience who rejoice in their reserved parking, the free club blazer, and the subsidised trips to conferences but otherwise haven’t a clue. The top managements are often highly qualified accountants who run things to suit themselves. It’s tragic but it’s hardly venal.

And why did Panther’s run stone motherless last in the News Rugby League? Well they had a favourite son as coach and they don’t always have any coaching skills.”

But finally, some bouquets

Having dumped a truckload of A-grade fertiliser on the Panthers in particular and registered clubs in general, now for some good points (buried way down the bottom after you’re thoroughly zonked having read the rest).

The clubs do plough funds back into local communities, handing out the dosh to local sporting clubs, schools, scouts and girl guides and the like.

A subscriber writes:

“All in all the club industry seems to benefit the local communities in which they operate. People will gamble – it’s a fact of life so get used to it. They can choose not to – for instance, I belong to a couple of clubs and I don’t gamble in them at all. However, I do enjoy the cheap facilities such as the practically free fitness gyms (for the missus not me), fine restaurants (even the bistros are far better than say the Golden Arches for both adults and children), the free swimming lessons for kids etc. If people can gamble in premises owned and controlled by themselves in a mutual co-op structure I think that is the best way to do it. It is infinitely better than their lining the purses of the shareholders in privately owned operations. My experience is that clubs these days make strenuous efforts to prevent their patrons from causing themselves harm – whether it be from excessive consumption of alcohol or gambling. They don’t always succeed and some of them are better than others at it. But at some point people do have to take some responsibility for themselves. When the semi-legal private casinos flourished in NSW in the 80s, they did not feel so responsible for their clientele.”

Over to you, the Crikey readership

The Panthers – Port Macquarie story is a fascinating one and probably not an isolated incident, although it would be surprising if the level of antagonism has been repeated elsewhere in our supposedly civilised community.

Clubs have millions of dollars under their management and as we’ve seen with Port Macquarie and Newtown RSL, their management is not always up to world’s best practice.

But the debate about the place of registered clubs in our communities should be opened up and we welcome all views here at Crikey.

Peter Fray

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