The NRL has announced it has taken ownership control of the Newcastle Knights football club.
Speaking in Newcastle on Saturday, CEO Dave Smith said the move would deliver the security and certainty that the Knights players, staff, sponsors, fans and members were seeking.
The Knights will continue to play out of Newcastle with their traditional jersey and logo.
“The Knights will continue to be Newcastle through and through,” Mr Smith said.
“The team will look the same, they will continue to be based in Newcastle and they will represent this region proudly like they have for the last 26 years.
“The difference is that, financially, they will be one of the top tier clubs in the competition.”
The agreement follows extensive negotiations with the former operators of the Knights football club, the Hunter Sports Group and the Newcastle Knights Members Club.
The business assets of the old club have been transferred to a new entity, called Knights Rugby League Pty Ltd in which the Members Club will take a minority 20 per cent interest.
Mr Smith said the key objective throughout the negotiations was ensuring the Knights remain a viable, competitive football club.
“Our first objective was to resolve the ownership dispute in the interests of the Newcastle Knights, their players, staff, sponsors, members and fans – and that has been achieved,” he said.
“Our next task is to stabilise the business and, when the time is right, we will consider appropriate longer term ownership options for the business to position it for the future.”
Mr Smith said the new Knights would have a board of seven, including one community representative initially nominated by the Members Club, two shareholder representatives initially from the NRL, and four independent directors.
The cash proceeds of the bank guarantee will be used to pay HSG’s existing employee and supplier obligations and to provide $5.1 million in start up funds for the new club.
The arrangements will also allow Knights Rugby League to fund litigation between the Members Club and RockCity.
Mr Smith said there would not be any changes to the business operations of the Knights for the rest of the 2014 season.
Knights Rugby League CEO, Mr Gidley said he was pleased to see the Knights given more certainty about their future.
“We now have an opportunity for a fresh strong start and that will be welcomed by our proud rugby league community,” he said.
Members Club director, Allan McKeown said the future of the Knights was the priority in coming to the agreement.”
“While there were a range of options available to the Members Club we wanted to end the uncertainty surrounding the Knights and give the players, staff, fans and members a strong future,” he said.
Troy Palmer, CEO of HSG said it was proud of the legacy that it leaves which will ensure the club is well positioned to enter an exciting period of growth.
“We have invested more than $20 million and the Knights now have a stable building platform which is reflected in the world class training and coaching structure from the NRL down through the elite junior programs.
“We will continue our involvement as a major sponsor for the next five years and support the Knights from the sidelines.”
Mr Smith thanked Mr Tinkler for his investment in the club through HSG at levels unprecedented in this sport.