A Shaky Start, Then — On a Roll!

‘We are one club, with 14 sites.’

With the framework finally agreed, management could begin putting the strategy into practice. What followed would test not only the amalgamation model itself, but some of the assumptions on which that agreement had been reached.

Once word got out that Panthers was in the market, there were approaches from a number of clubs. Panthers’ management considered about 80 possibilities. Clubs that had good potential, worthwhile assets and the potential to become a strong club in their community were put on a short list and measured against the criteria.

Before Panthers embarked on the amalgamation process, there had already been numerous amalgamations approved by the licensing court apparently without murmur of dissent or opposition from the Department of Gaming and Racing (DGR). 

This smooth process seemed to change when Panthers began submitting applications.

A thorough investigation into the first two amalgamations was carried out by the DGR, with Cowan recalling the Hawkesbury application going back to the court ten times. It took close to a year for them to be approved. It seemed as if Panthers was suddenly being singled out. Was this a portent of things to come?

All this close attention added credibility to John Ralston’s advice that Panthers would not be allowed to amalgamate with any club unless the court was absolutely convinced that it had done everything to protect the members of both clubs.

Cowan discovered that the amalgamation process unearthed a problem that they hadn’t foreseen.

Every amalgamation brought about the transfer of that club’s members to Panthers. The Memoranda of Understanding (MOU) promised the members of the amalgamating clubs that they would become members of Panthers from the time of amalgamation without having to pay any additional fee. But when their membership became due for renewal, they would have to pay the current Panthers membership fee. 

At that time, Panthers’ members were paying $22 a year – probably the highest membership fee in the state, while members of Hawkesbury were paying just $7. We realised that we would lose a lot of them if we insisted on charging them the full $22 to renew.

We decided that when renewals fell due, we should allow them a choice that would include continuing to pay the lower fee.  A new class of social membership was created for a fee of $7 but without the right to vote for the Panthers Board and without the right to stand as a director. 

At first this gave some comfort to those directors who may have felt their positions on the Board were in jeopardy.  Only the members of the new club who opted to pay the full fee could stand for the Board. It was considered that very few would do that. Even if they did, the majority of existing full members would not know them, and so would not vote for them. 

But there was one significant factor in all this.

The MOUs clearly promised that all members of clubs amalgamating with Panthers would be brought across as full members as soon as the amalgamation was approved by the court. They would not lose their rights as full members unless, and until, they made the choice to become social members.

The first amalgamation, with the Bathurst Leagues Club, was approved in early 2000. On the last day of the Bathurst hearing, Cowan received a phone call from Steve Bowers, the club’s legal counsel. He recalls Bowers telling him that the DGR solicitors had advised that the amalgamation would only be approved if Panthers agreed to new conditions regarding the poker machine installation at Bathurst. These conditions which differed from provisions stipulated by current law. Suddenly the legal team was put in the position of trying to negotiate agreement on new provisions.

This was moving the goalposts in the middle of the game.

Cowan recalls his response to the demand was that it was up to the government to make laws, and Panthers would abide by them. However, he said he was not willing to negotiate conditions that would be used as a precedent for restrictive legislation that would affect the whole industry. If the amalgamation could not be approved under the current laws, Panthers would pull out and Bathurst
would probably not survive.

Cowan says it came down to a stand-off..

I refused to do what they wanted and they backed off. They were wrong to ask in the first place and it would have been pretty embarrassing for them if Bathurst had to close over the issue.

Hawkesbury Panthers came into existence a few months later in April.

Even in these early days of amalgamations, one thing became very obvious to the management of Panthers. There was, within the Boards of Directors of amalgamating clubs, discernible appreciation of what Panthers was offering, accompanied by a great degree of respect for Panthers. Most had pursued other options, including amalgamation with other clubs. It was a revelation to them that the Panthers model left them largely in control of their clubs and let them retain a degree of autonomy and ownership. Like many of the other clubs that approached Panthers, Hawkesbury had been in financial trouble. It had tried to pull itself out of the situation by selling some land adjacent to the club, but there were still problems.

Bob Anderson was a director at Hawkesbury Panthers. He says what was most important to the club at the time of amalgamation was to retain its ‘small club’ atmosphere.

‘The first approaches by Panthers were very low key. There was no pressure’, says Anderson.

It was all pretty casual. But it was always made clear that the amalgamation would be for the betterment of the club. We had looked at other offers at the time. One local club came in and we had a meeting, and they virtually said, “Once we take you over, we’ll just close you down”.

Anderson says that Panthers came to them with a memorandum of understanding which made them feel much more confident about the arrangement. There was collaboration all along the way.

We didn’t feel like we were being taken over. Never at any time did it seem that Panthers was dictating what was to happen.

As part of the amalgamation process, Cowan or one of the assistant managers visited each club and had meetings with their Board. Cowan also addressed special meetings of the members, explaining the memorandum. He assured them that they would have equal rights with all other Panther members and be better off as a Panthers club. He also spoke to the staff and encouraged questions and full discussion. The management team at Penrith believed that a culture of openness, trust and honesty was essential for success.

The memorandum of understanding was an integral part of each amalgamation. It was negotiated between the partners and set out in detail the responsibilities of each club. It stressed the benefits for the members of the amalgamating club, especially in relation to Panthers membership.

On 30 January 2001, less than a year after the amalgamation was finalised, the Hawkesbury region was declared a natural disaster area after violent winds ripped through the area. The Club was a scene of devastation after the seven-minute storm ripped through Richmond. Staff put their own safety at risk to rescue a man trapped under a collapsed wall. The club was closed for a short period while the damage was assessed.¹

Anderson says that there was insurance, but that everyone had appreciated the full-on way that Panthers stepped in to get it back on its feet again.

Cowan was impressed by people he dealt with in amalgamating clubs.

I doubt if I have ever been more impressed than when I first met the staff of the Mekong club to discuss the prospect of an amalgamation with Panthers.  It was difficult to believe that a club with such enthusiastic and dedicated staff could be in receivership. The fact is, they should never have been in that position.

The process also brought us into contact with the boards from the various clubs.  Club Nova’s directors, for example, were impressive for their sincerity and ability to discuss all the issues rationally, calmly and in depth.  I even had a moment after leaving my first meeting, when I imagined swapping some of their directors for a select few at Penrith. Harmony and logic might become the order of the day.

Most of the boards had experienced great financial stress within their clubs but this had never stopped a committed effort to serve their clubs. They were all impressive, genuine people looking for the best solution.

Another important consideration was the potential to spread many of the fixed overhead costs over a number of sites, without extra cost. Financial management, poker machine management and purchasing were just some of these.

From 2000 to 2003, conditional approval was granted for amalgamation with 13 NSW clubs, all later confirmed.

Amalgamating Club	Approval Date
Bathurst Rugby League Club	February 2000
Bathurst City Bowling Club	February 2000
Hawkesbury Sport Club, North Richmond	March 2000
The Mekong Club, Cabramatta	June 2001
Lavington Sports Club	June 2001
St Johns Park Community Club	October 2001
West Epping Bowling and Recreation Club	October 2001
Club Nova Co-operative, Newcastle West	November 2001
Cardiff Workers Club	November 2001
Port Macquarie RSL Club	December 2001
Hibbard Sports Centre, Port Macquarie	December 2001
Glenbrook Bowling and Recreation Club	April 2003
Wallacia Golf Club	2003

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1. This extreme weather event doesn’t appear on broad government disasters lists because it was a localised event. On 30 January 2001 violent, localized squall winds knocked down massive trees and blocked local roads around Beaumont Ave and Terrace Road, North Richmond (the location of Panthers North Richmond – as it is now known) There was also intense flash flooding and the Club experienced servere impact resulting in significant roof and property damage. ↩︎

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