Mighty Panthers declawed
EAMONN DUFF
February 28, 2010
EXCLUSIVE
PANTHERS, Australia's largest licensed club empire, is in financial meltdown and is expected to report an $11 million loss to members.
The loss, confirmed by outgoing chief executive Glenn Matthews, is the largest in reversals spanning more than five years. It will strip at least $1 million from the club's NRL playing budget and threatens 900 employees across the state.
Mr Matthews, who resigned last week after 26 years at the club, said discussions had been held with the state government and Clubs NSW to offload some of its 14 properties across Sydney and NSW.
''There's no doubt we've had a trying year and suffered loss,'' he said. ''It will amount, with some write-downs, to about $11 million. There's parts of our strategy we need to revisit. We have 14 clubs at present. That will change this year.''
Mr Matthews said it was coincidence that he'd decided to quit days before members received copies of the club's annual report.
''My decision to call it a day has nothing to do with financial performance,'' he said. ''I need a new challenge. I'm sad to be leaving.''
From a ramshackle rugby league clubhouse in Penrith, Panthers grew to become the biggest licensed club brand in Australia with more than 140,000 members across seven clubs in Sydney and seven across regional NSW, including Port Macquarie, Newcastle, Bathurst and Lavington, near Albury.
At next month's annual general meeting, a survival strategy will be unveiled and is expected to include a sale of assets.
Club chairman Don Feltis, who took over the role in November, said he was ''very disappointed'' with the financial performance of the group, but was confident the position could be turned around.
''I'm not making any excuses about our financial position at the moment,'' he said. ''It's not good but we're trying to do something about it. We've got no problems as far as our financial holdings or assets are concerned. In the short-term we need to turn our cash flow positive so we can go into profit.''
Mr Feltis said the club planned to offload several of the poorer performing clubs, but declined to name which ones.
''I'm extremely confident that this time next year, the current problems the Panthers Group is having will be significantly reduced,'' he said.
Marketed as a family retreat where people could eat, drink, gamble and socialise, Panthers outgrew its rugby league roots by installing attractions including a water-ski park, tennis courts, land- and water-based driving ranges as well as plush conference and banquet facilities.
A boardroom source said: ''The amalgamation strategy was appropriate at the time, but then along came the non-smoking laws and poker machine tax increases.
''The club landscape changed forever. It had an effect on everyone, but more so on Panthers because we had 14 clubs in the stable.''
In 2002, then-chief executive Roger Cowan was forced to front a special commission of inquiry ordered to investigate the relationship between Panthers and Phyro Holdings, a family firm established by Mr Cowan in 1968.
It had previously emerged that Panthers had paid Phyro $2.9 million for legal, advertising and marketing services.
It emerged at the inquiry that Mr Cowan had visited the club's pay office in 2002 and awarded himself $219,985 in holiday pay because he had not taken a proper holiday in years. The inquiry stated there was no evidence that he had taken more than his due entitlements.
One board member said he recently resigned after watching others drive the Panthers club ''into the ground'' through poor decision-making. ''Over the past five years, they've accumulated losses of about $35 million,'' he said. ''Now they've reached the end of the road.''
Clubs NSW chief executive David Costello said he was alarmed to hear of the club's latest loss: ''The industry is facing massive challenges. There are plenty of clubs currently struggling to break even but none have encountered losses as bad as that. I don't understand exactly what has occurred up there. I'm at a loss, really I am. I'm staggered by that.''
