gongski
Years ago

Wollongong Hawks $2m black hole

Doesn't look good for the hawks, despite all their rhetoric about future support VA report just landed and things are worse than first thought. $2million black hole and to cap it off the supposed saviour JS is claiming $320K in loans, so he can write it off as a tax deduction, smaller companies like ours along with staff & players just have to accept zero in the dollar. To think they are asking local business to support their future, they are burning local business's with the lack of financial acumen. Don't get me wrong the local continued support for the TEAM is amazing, but when does the Front Office and owners have to take some ownership & responsibility. Obviously JS did NOT carry out due diligence on the TRUE state of affairs of the business. VA advice:- LIQUIDATE.

But all that really means is that either a new ownership group will be formed or new directors listed with a new company and ALL is forgotten and the team lives on debt free whilst staff, players and creditors don't even get any communications or form of apology.

GO HAWKS.........

Topic #36815 | Report this topic


GongResident  
Years ago

...the front office staff and contracted players are also creditors. Salaries, leave entitlements and super have not been paid !

Reply #523218 | Report this post


gongski  
Years ago

Oh and I forgot to mention as a sign of JS's commitment he did not even provide a Deed of Company arrangement by the 30th March to buy his organisation some more time to work with its Creditors and future commercial partners. He knows exactly what he is doing.... as I said in the first post he gets a $320K tax write off ( and yes he did put in that money out of his own pocket) however isn't that what one would expect when you purchase a floundering sports organisation?

Reply #523221 | Report this post


Anonymous  
Years ago

So he has ponied up $320K cash and can claim it as a legitimate business deduction. An unfortunate thing as you say, but he has lost that money legitimately. Surely you can write your loss off as well?
I understand your point however and it's been looming for a LONG time.

Reply #523225 | Report this post


Happy Days  
Years ago

Dead duck or should that be hawk?Feel sorry for the businesses and staff that are owed money.

Reply #523226 | Report this post


Anonymous  
Years ago

So Hawks are dead then?

Reply #523243 | Report this post


Anon  
Years ago

gonski,

If there is a deed or offer then the players won't get their entitlements paid by the government gurantee

Perhaps there is more going on that meets your eyes and this is best for the employees and there is more going on in the back ground

Reply #523280 | Report this post


Marcus Camby  
Years ago

Wouldn't the HAwks be solvent again when they have the major sponsor in their books?

Reply #523309 | Report this post


Jack Toft  
Years ago

Just call in the AFL anti-doping tribunal, they'll find everyone not guilty

Reply #523316 | Report this post


GongResident  
Years ago

The cashed-up owner is treating the Hawks as a play thing that he can cast aside, leaving behind local businesses and staff who are out of pocket....he won't be welcome in the Gong again !

Reply #523367 | Report this post


Anonymous  
Years ago

"The cashed-up owner is treating the Hawks as a play thing that he can cast aside, leaving behind local businesses and staff who are out of pocket....he won't be welcome in the Gong again !"

So you don't want an NBL team then ?

Reply #523422 | Report this post


Dione 87  
Years ago

Didn't Wollongong Coal pull out a couple of million of sponsorship ... why is that the owners fault ?

Reply #523426 | Report this post


Anonymous  
Years ago

At the risk of being cheeky the Hawks have always been on the edge for a while now so wouldn't any business dealing with them want COD every time?

Reply #523440 | Report this post


LC  
Years ago

More of the $2m black hole that is the Wollongong Hawks:

$2m debt not big enough to quit yet for Wollongong Hawks

Reply #523441 | Report this post


Isaac  
Years ago

So you don't want an NBL team then ?
They had an NBL team and I imagine it would probably be in a better or similar position now had new ownership not arrived, and probably been in a more attractive position to garner community support. Dare say they would've seen more success on court for one thing.

Reply #523446 | Report this post


Anonymous  
Years ago

Isaac, I spoke to Spenceley about this the other day (I work with him), rewind to this time last year, the community board had a resolution to put the club into Administration when he turned up. If that had happened the debts would have been ~$2.5m and there was no-one floating around wanting to any money into the club, even the previous community drive only raised $200,000 so that was never going to be an option. The tax office was days away from issue a notice to wind the company up unless their debt was paid

It sounds pretty clear to me they would not have existed past last year if he hadn't been introduced to them. Even then you have to remember the only reason the players and staff were getting paid for the 2 months prior to him taking over was he was paying the bills ahead of taking over.

A better or similar position, I think not, there would have been a 7 team competition last year.



Reply #523479 | Report this post


Dione 87  
Years ago

all that aside, the fact is unless something radically changes at the NBL there is a REAL chance this will be a 5 team competition next year (yes, 1 more team is about to go)

Reply #523480 | Report this post


Anonymous  
Years ago

But back to my original point, telling the only person who is in a position to keep the club going he is not welcome back to "the Gong" sounds pretty stupid to me.

Do you actually want him to take you up on that ?

Reply #523483 | Report this post


Anonymous  
Years ago

So a $2.5 mill debt, a white knight who has tipped in $350 K or so and $200K from community ='s status quo from last season. No reason at all for them to continue it seems to me. Sorry.
A true entrepeneur wouldn't be writing off the debt. Can't have it both ways.

Reply #523491 | Report this post


Wilson Sting  
Years ago

I'll bite Dione 87. Who's the other team on the brink?

Reply #523505 | Report this post


Anonymous  
Years ago

Its been discussed many times b4.
Cairns make money, Perth and NZ. 2 teams in VA, so work it out from there.

Reply #523507 | Report this post


gongski  
Years ago

Mr Spenceley made a deed of compnay arrangement in the amount of approx $850k to the board last june which was agreed as the existing debt amount that he or spenceley management would take on. Him being the sole shareholder of the company. So he has not only not kept to that Deed as he is approx $550k still outstanding he has also now made the other $350k a loan to the Hawks. On top of this Mr Spencely initially contacted the administrators in early december 2014 and on the 14th December, 2014 he had the audicity to put a Charge over the companies assests for that $320k debt, albeit the club really does not have any assest, but it highlights his desire to protect what he can before anybody else. The season was not even half way and he was ready to pull the pin. and dont get me wrong i fully understand the ramifications of potentially trading whilst insolvent and also the position they were put in with the unfortunate situation with Wollongong Coal BUT he convinced the former board and current staff, players. Coaches and suppliers that HE had a 3 year plan, yet 5 months after taking over he is putting a Charge over the companies assets. Regardless of the pledges of sponsorship they will be Liquidated so as staff and players entitlements can be paid by the Government ( tax payers = all of us) Not Mr Spenceley. All the while i have staff that need their jobs, entitlements and i have a mortgage so we get nothing not even an explanation. I truly doubt he was ever fully committed. And a white knight.... I think not

Reply #523524 | Report this post


D4444  
Years ago

You have my sympathy gongski.

It sounds like Spencely is following along & not-so-proud tradition of NBL team owners in leaving players, staff & deptors unpaid.

Reply #523527 | Report this post


Anonymous  
Years ago

Let's see what the NBL will do about this if all true.

Reply #523547 | Report this post


Anonymous  
Years ago

Not wanting to lessen the emotion you are feeling there Gongski but that emotion might be getting in the way of a few facts to be fair.

"Mr Spenceley made a deed of compnay arrangement in the amount of approx $850k to the board last june which was agreed as the existing debt amount that he or spenceley management would take on. Him being the sole shareholder of the company. So he has not only not kept to that Deed as he is approx $550k still"

The remaining $500k you talk about is owed to the NBL which Spencely renegotiated as part of taking it over with the NBL, Neill told me it was no longer due and he had to pay them only if the team was profitable. The administrator makes reference to this NBL agreement in the creditor report. That added in makes it look to me like he did meet the $850k

"he has also now made the other $350k a loan to the Hawks"

To pay debts/bills etc money has to come into a company somehow, that is either as equity (shares) or loan amounts. It's really common to put money into a business as a loan rather than shareholding, it's fast and easier than drafting shareholder agreements etc pretty normal most people fund their businesses this way and there are entire section of company's constitutions that deal with director's loans, again standard stuff.

"Charge over the companies assests for that $320k debt, albeit the club really does not have any assest but it highlights his desire to protect what he can before anybody else"

That is not really the case, in any administrator or liquidation situation there is an order of preference, staff and super etc would eat into all the money before his debt and him having the money in as debt or not doesn't afford him any better protection given this is not a business with assets to go and sell. I don't think he or anyone else would assume there would be money left to pay his debt given there are no assets. Often a charge is used in business to make sure there is a say in where the assets end up, if there is a competing bid one good one bad then someone with the charge can have more control over where it ends up.

"BUT he convinced the former board and current staff, players. Coaches and suppliers that HE had a 3 year plan"

Sounds to me like there was a 3 year plan I'm sure that plan didn't included WC pulling out of a $2m of sponsorship agreement 6 months in. Plans are just that, plans, any change of such magnitude as WC pulling out would completely changed those plans. That seems pretty reasonable and out of his control unless he knew from the start WC would pull out which seems unlikely, why would you take over the team if you knew you were about to lose $2m.

"I truly doubt he was ever fully committed. And a white knight.... I think not"

I don't think anyone puts $300,000 into something without being committed no matter how much you have. He is a business person at the end of the day and not a white knight, in business things change, the business plan had a lot of the wages / costs being met by WC sponsorship, that changed without that money being there it doesn't seem there is a business. That impacts a lot of people, staff, players, fans, the NBL, suppliers, everyone's thoughts are with them all.

fingers crossed a team keeps going out of this

Reply #523561 | Report this post


Anonymous  
Years ago

Always 2 sides to the story of course and the 2nd one makes sense in regard to the first. I still don't understand that if as a businessman you wouldn't be asking for COD for any services given.

Reply #523566 | Report this post




You need to be a registered user to post from this location. Register here.



Close ads
Serio: Tourism photography and videography
Little Streaks - The fun and interactive good-habits app designed especially for kids.

Advertise on Hoops to a very focused, local and sports-keen audience. Email for rates and options.

Recent Posts



.


An Australian basketball forum covering NBL, WNBL, ABL, Juniors plus NBA, WNBA, NZ, Europe, etc | Forum time is: 12:30 am, Wed 20 Mar 2024 | Posts: 968,026 | Last 7 days: 754