Phil Morehead remembers an unusual sponsorship idea — and the leadership lesson that followed.
Contributor: Phil Morehead
Phil Morehead was a partner in Thomas Marsden Advertising the advertising agency and design studio that supported Panthers for many years. Phil also was a long-time active member and President of the Penrith Valley Chamber of Commerce. In this contribution he recalls how Penrith P Panther came into existence and became a recognisable community figure.
In 1988, the name across the front of the Penrith Panthers jersey wasn’t a company or a commercial product.
It was PENRITH CITY.
The arrangement lasted for just one season. But the story of how it came about provides an interesting glimpse into the relationship between the Panthers, the business community and the city during a period when all three were growing.
For Phil Morehead, however, the strongest memory isn’t really about sponsorship at all.
It is about Roger Cowan.
Phil was a partner in Thomas Marsden Advertising, the long-time advertising agency for Panthers, and at the time was also President of the Penrith Chamber of Commerce. He remembers Roger approaching him because Panthers had been unable to secure what Roger regarded as a suitable major jersey sponsor.
Roger saw another possibility.
The football team was appearing regularly on television and in newspapers, carrying the Penrith name far beyond the district. If a commercial sponsor couldn’t be found, why not use that exposure to promote Penrith itself?
As Phil recalls:
Roger was big on promoting Penrith and realised the massive media exposure our football team was delivering every time they played. It was Roger’s concept to have PENRITH CITY on the jerseys.
Phil was wearing what he describes as his “two hats” — advertising man and Chamber President — and the two began developing a plan around the idea.
A city gets behind its team
The proposal went well beyond simply putting PENRITH CITY on a football jersey.
Bloodied and busted — Mark “MG” Geyer & John “Hoss” Cartwright bringing victory to their city. (Photo from Bound for Glory)
An Art Union was planned. Local motor dealers came on board with a new car as first prize. Other businesses would provide additional prizes, while the Chamber’s extensive business network would help sell and promote the tickets.
Responsibilities were allocated among the various people involved and another meeting was scheduled to check progress.
By then, Roger had acted — the jerseys had been ordered.
Phil had acted too. Retailers were prepared and the posters, tickets and other promotional material had been produced.
Then came the follow-up meeting.
In Phil’s recollection, almost nobody else had completed what they had undertaken to do. He particularly remembers a young Royce Simmons, then working with the junior clubs, apologising because he hadn’t had time to complete his part.
The original plan was in trouble.
“We will have to put this aside”
Roger looked at the situation and made the decision.
The jerseys could no longer be altered. Thousands of dollars had already been spent on promotional material. But without the other elements in place, the broader campaign could not achieve what had originally been intended.
Phil remembers Roger saying:
Well, the jerseys cannot be altered, we’ve already spent thousands of dollars on promotional material and I don’t think we can achieve our goal. We will have to put this aside and go back to the drawing board.
What impressed Phil was not simply the decision. It was the absence of everything that might easily have accompanied it.
No anger. No criticism. No ‘what are we going to do now’?
The plan had not come together. People had failed to deliver what they had agreed to do. Roger was undoubtedly disappointed.
But, as Phil remembers it, there was no attempt to embarrass anyone, allocate blame or prolong the failure.
A decision was made and everyone was allowed to move on.
For Phil, it became an enduring example of Roger’s leadership — particularly his capacity to make a hard decision without condemning the people whose actions had helped make that decision necessary.
The unexpected result
The original promotional scheme may not have proceeded as intended, but something significant remained.
The jerseys had already been produced.
So, throughout the 1988 season, the Penrith Panthers ran onto the field carrying PENRITH CITY across their jerseys.
The 1988 Penrith City Panthers (photo: Bound for Glory) BACK (l to r): Rod McNeil, Matt Goodwin, Mark Geyer, John Cartwright, Graeme Bradley, Cal Van Der Voort. MIDDLE(l to r): Bryan Hider, Neil Baker, Greg Alexander, Geoff Gerard, Chris Mortimer, Steve Colman. FRONT (l to r): Greg Clements, Peter Kelly, Steve Robinson, Royce Simmons (c), Ron Willey (coach), David Greene, Brad Izzard. Ballboys (l to r): Tim Bailey, Paul Bicknell, Brad Bateup.
For Phil, wearing his Chamber of Commerce hat, there was a considerable consolation. Panthers honoured the costs already incurred in producing the promotional material, while the Chamber could tell the local business community that its football team would be promoting Penrith City throughout the season without cost to the Chamber.
It was, in Phil’s words, one of the “win win” experiences of his time as Chamber President.
And the unusual arrangement proved short-lived.
In 1989, Calphos became the Panthers’ major jersey sponsor. In 1990, DahDah took over the major sponsorship, apppeared in a grand final, then a major change in colours, and a premiership win — impeccable timing. DahDah remained on the jersey through to 1993.
Phil wonders whether that prominent PENRITH CITY branding across the Panthers jersey helped open the door for the commercial sponsorships that followed.
Perhaps it did. But his recollection leaves another legacy.
A plan had failed. Money had already been spent. Commitments hadn’t been met. Roger had every reason to be frustrated.
Yet the thing Phil Morehead remembers almost four decades later isn’t the frustration.
It is the way Roger treated the people around the table.
The club industry in NSW occupies a unique position — strongly regulated by the state government, but still very much a part of its individual communities. Most clubs are heavily involved in sport and recreational groups in their areas, and provide donations, facilities, and other benefits. Many also support local charities and organisations. By 2003, the total cash donations from NSW clubs amounted to around $102 million. The main recipients were health and social services programs, education (cash, scholarships, library support), emergency services and disaster relief, and of course local sport, at both professional and non-professional levels.
The situation of club directors is also unique. The shareholders who elect boards of major corporations have a ‘hip pocket’ interest in who is overseeing the running of the company. The directors are usually there because they bring some skill or expertise that qualifies them to do a good job.
In most club elections, a 1% turnout of members would be classed as good. This changes only slightly where there is a major issue being played out, as at Panthers in 2002. Even then, the 3000 people who voted still only represented a small percentage of the club’s 130,000 members at the time.1
People pay to become shareholders in a company, whereas people become members of a club to enjoy the facilities it offers and the geographical convenience. Few of them have any interest in the politics unless they become aware of major problems that are likely to impact on the amenities they enjoy.2
Craig Fantom3 is now the CEO of a well-known Irish pub on the western outskirts of Sydney. Before moving into hotels a couple of years ago, he had spent 25 years in the club industry, 20 of them dealing with boards. It was the three years he spent as CEO of the Rooty Hill RSL Club that became the catalyst for a change in his career direction.
‘Club directors have the same fiduciary duties as any other director, and often have control of a multi million dollar organisation’, says Fantom, who believes that one of the industry’s major weaknesses is the quality of the directors it attracts.
Roger Cowan says he was aware of the difficulties at Rooty Hill, but his experience at Panthers has been quite different and he doesn’t share Fantom’s view on club directors. Cowan says that some of the directors that have caused the most problems for Panthers over the years appeared to be the best qualified.
Look at the group that set themselves up as the Footy Five.4There was a solicitor, an accountant, two successful businessmen and a private investigator. They should have been the best directors we ever had but the reader of this tale might have some doubts about that.
There are a lot of directors in the club industry who are volunteering their time because of a genuine interest in their club. If they lack formal qualifications they make up for it with common sense, loyalty to the cause and the willingness to listen to expert opinions when they are needed.
One [Panthers] director who stands out in my memory was Lou Brown, a truck driver and a rough diamond if you ever saw one. Another was Poker Ausburn. He was a boilermaker and was chairman of the club for several of our most successful years. I could name a lot more very good directors and they all had one thing in common – a genuine unselfish desire to see the Club succeed. An uneducated director with a genuine sense of ownership and sound common sense will be an infinitely better director than a Rhodes scholar whose heart isn’t in it.
To the allegation that he worked with boards of ‘yes-men’, Cowan says,
It really is quite ridiculous to think that directors would volunteer their time to represent the members who elected them and then turn up to meetings to be told what to do. Human nature does not work like that.
Keith Rhind remembers one amusing example of the myth.
Before Vern Mychael was elected to the board, he would be at every general meeting asking the most probing questions. He made it well known that if he ever got onto the Board, he “was going to put Cowan in his place”. He was elected and became one of Cowan’s strongest supporters and friends.
Rhind recalls that years later Mychael related how different was the reality of the board from the myth.
Nobody in their wildest dreams could imagine Vern as a yes-man. He was a very strong character.
Rhind also points out that nobody could say Barry Walsh was a yes-man, and yet on most issues, he supported Cowan to the hilt.
The fact is that they shared the same vision for Panthers and they agreed on most things. They were both passionate about succeeding. Barry’s greatest passion is rugby league, but he knows the future of rugby league depends on the success of the club in every other way. When they did disagree, they were able to discuss it rationally and with respect for each other. The “yes-men” theory is really quite ludicrous when you think about it.
Another claim was that Cowan could choose who he wanted on the board. Boards are elected – as October 2002 proved. All the campaigning and the tickets made no difference. The members decide who they want.
It was the vagaries of directors that had seen Cowan in court facing charges in 1986.5 It had also taken him ten years to convince a board to implement a change to the way the rugby league club was administered.6
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A total of 3273 ballot papers were retruned in the March 2002 election. 110 of these were informal. See: Temby Report page 39. ↩︎
Rugby League Clubs may be slightly different. If the team is performing badly, members appear to take great interest. The 1971 Extraordinary General meeting that saw Merv Cartwright and Ron Partridge resign had an attendance of 1000, when there was only 6000 members. See: Part 8 — Divided Control: The Club and Football↩︎
Craig Fantom held this role at the time of publication. ↩︎
A removed section from the original Chapter 13: Amalgamations Not Takeovers.It tells the remarkable story of the contest over the future of Port Macquarie RSL Club — a dispute involving competing amalgamation proposals, an intense local campaign, political intervention and even a bomb hoax. It has been removed from the main narrative because the level of detail interrupts the broader account of Panthers’ amalgamation strategy, but the episode provides important context for both the Port Macquarie amalgamation and the political reaction to Panthers’ expansion.
The Port Macquarie Panthers story reads like the script for a Bruce Willis movie. It had secret meetings and bomb threats, vandalism, office bugging, threatening phone calls, 19 faceless men, and, of course, who let the dog out?
But the most important element of all was people power.
In mid-2000, the Board and management of the Port Macquarie RSL agreed to approach Panthers about an amalgamation. The club was in trouble and had been for many years.
The original RSL club was born in 1947 in a corrugated Nissen hut, in the centre of what was then a small beachside town. The local sub-branch owned the site and leased it to the licensed club.
After a failed attempt to buy the property from the sub-branch in 1986, the club bought the land in Bay Street where its new premises would be built. It was a short distance from the centre of town, in what was to become a prime waterfront location.
The club moved into its new premises in August 1993, but due to the recession and a blow-out in the building costs, it started with a $22 million debt. Within a few months, it became clear that the new location had not attracted local members in the numbers anticipated. The locals were staying away in droves.
By early 1994, management knew they were in trouble. The club went into voluntary administration in May of that year and continued to operate that way until Panthers came on the scene.
An agreement was struck very quickly between Panthers and the club’s chief executive, Greg Willcocks, and board chairman Graham Linn. Board and management of both clubs negotiated a memorandum of understanding. Roger Cowan and Glenn Matthews attended a meeting of around 800 members on 26 November 2000. Linn told members that the amalgamation offered members ‘a brighter and more certain option for the future’.
Roger Cowan also spoke, assuring members that the Panthers model would preserve the club’s local identity, retain local management and that staff would have all their benefits honoured.
He told the meeting that Panthers had been able to negotiate with the bank to bring the club’s debt of $44 million dollars down to around $8.8 million. The members voted almost unanimously to proceed with the amalgamation.
Cowan explains,
The club had been in trouble for a long time, and the debt was growing. A lot of the accumulated debt was unpaid interest. The bank had not been able to bring about any improvements in the club’s trading position and wanted to write it off their books. At that point, they knew that there was no chance that they would ever collect the total debt, so it was just a matter of how far they would come down. We worked out a figure that we thought was manageable and negotiated from that angle.
For Panthers, the next phase began. An application to the licensing court was approved, and it appeared that everything was on track for a smooth transition.
Around the middle of 2001, Cowan received word that the club was looking at an alternative proposition. In the next couple of months, details of the new offer were revealed. A group of 19 local businessmen had put a proposition to the club.
Freely admitting that they were taking advantage of the new, lower debt that had been negotiated by Panthers, they said they had raised $2 million and had finance for the remainder. Their plan was to pay out the debt and take over the ownership of the prime Bay Street site. The club would retain ownership of its bowling club at Hibbard.
The relationship between Panthers and Graham Linn, and to a lesser extent with Willcocks, began to come apart. Unwilling to become embroiled in a local conflict, Panthers decided to back off. To them it seemed that the Port Macquarie club was committing itself to a deal that was almost suicidal, but they could also see there was no point in persisting where they were not wanted.
The nineteen investors were looking at a windfall. They would be buying a prime property for less than $9 million and renting it back to the club. After ten years, or if the club defaulted, they would have the right to sell or redevelop it. Property values in Port Macquarie were increasing, particularly on such a prime waterfront site, adjacent to the only major shopping centre in town. By 2004, the value of Port Panthers site was already close to 25 million. It had increased even more when development opportunities were explored in 2006.
It was a wonderful deal for the investors, but for the club it was a different prospect.
At the end of the ten years it would need to find a new site, in a suitable position, reasonably close to town, in a property market that was going through the roof. If profits were consistently high over the ten years, it may have accumulated the funds to buy the club back or to secure another site and rebuild. If it didn’t, its only alternative would be to relocate to the Hibbard club a few kilometres out of town and build a new club there. It would take an extremely optimistic view to believe that the club could accumulate, in ten years of trading, sufficient capital to start again in a reasonable way. Taking into account its trading history, and that the investors could do nothing to help in that regard, it was more than optimistic.
The biggest complaint from the locals was the fact that these 19 men, throughout the entire process, refused to reveal their identities. The secrecy, the future security of the club, and the enormous profit potential soon had members thinking and talking.
The ‘19 faceless men’ saga became the biggest story in town. Nine months earlier, there had been an overwhelming vote to go with Panthers, but now there were many who now saying that ‘local ownership’ was a better option than letting the big out-of-town super-club come in to take over the world. Today the club is probably much more a locally-owned club than it would have been had it taken the offer to sell the premises.
The club’s chairman and others were now enthusiastically backing the alternative bid. One of the points they would continue to push during the campaign was that the non-Panthers bid would see the club become ‘debt free’. What they failed to mention, however, was that it would also be free of its greatest asset. Instead of paying interest on its loans, it would be paying rent.
One group of members was particularly concerned about the disappearance of Panthers from the negotiating table. These ten ‘concerned club members’ formed their own little consortium. One of them, Col Munro, made a personal phone call to Roger Cowan. He asked, ‘you’re not dumping us, are you?’
I explained to Col that Panthers was not interested in pushing in where it was not wanted. This was a local issue and the members had to sort it out for themselves. He told me that we had been given the wrong impression. A large majority of members still wanted the Panthers amalgamation and the perception in town was that Panthers was letting them down. I finally agreed to meet his group to see if we should become involved again.
The following morning, a breakfast meeting was held in a Port Macquarie coffee shop. It was attended by Roger Cowan, Barry Walsh, and the ten concerned members. Munro was later elected to Port Macquarie Panthers’ advisory board. Another member of the group was David Meidling, also on the advisory board. David also was elected to Panthers’ group board.
Panthers agreed it would honour its original commitment provided there was sufficient support by the members.
The group mounted a campaign, bombarding the local Port News newspaper with letters to the editor. They also got out amongst the townspeople, talking, rallying members and getting signatures on petitions. This tactic would continue over the next three months, and in the end, was the thing that tipped the balance.
A meeting of members was scheduled for 11 October. Both sides would put their case. A local businessman would speak for the 19. It was here that the high farce began. Greg Wilcocks introduced the parties, and Roger Cowan addressed the large crowd for about 30 minutes. A speaker from the other side had just begun to speak when word came through that there was a bomb in the club.
‘Nobody moved for a while, the reaction was quite hostile,’ says Meidling. ‘There were boos and catcalls and the situation became quite ugly. Nobody at the meeting believed there was a bomb, and most refused to leave.’
The police were called and the meeting broke up, but the high farce continued.
Both sides accused each other of staging the hoax, but it did not stop there. Even the Sydney media got involved. In typical tabloid style, a Daily Telegraph story told of ransacked offices, glue in the locks of someone’s car and house, and anonymous phone threats being made to people on both sides. In a particularly bizarre turn, the story said that a gate had been deliberately opened, ‘allowing the general manager’s beagle to wander off’.
Col Munro shrugs that allegation off. ‘That dog had roamed the North Shore all its life’, says Munro. ‘It didn’t know what a fence was.’
‘We also got accused of bugging the boardroom’, says Munro, ‘though I don’t know how we got past security to do it. We used to meet in a little coffee shop near my place.’
Secret meetings became a way of life, for both sides.
Port News editor Janine Graham says the paranoia in people made the bomb threat seem real. ‘That was what pushed it into wierdsville’, she says.
The bomb did turn out to be a hoax, but it was totally unrelated to amalgamations, faceless men, or either club. A local woman had a little too much to drink and made the call. She received a fine and a suspended sentence.
The meeting galvanised the town. It split down the middle, with a massive media campaign. Full page ads ran in the Port News, and the Holiday Coast Pictorial. The latter publication began full-scale attacks on Panthers and the pro-amalgamation group of members. An ad run by a local businessman called the Panthers’ interest a ‘hostile takeover’. The ad stated that Panthers had never clarified the deal and warned that jobs would be in jeopardy.
He had either not been informed that a detailed memorandum of understanding had been signed by both parties, or he chose to ignore it.
The Hastings Council also got into the act, vocally supporting the local bid. One councillor dismissed concerns about the 19 men. ‘It’s not an issue knowing who is in the consortium,’ he said.
Another full-page ad featured local businesspeople and two local politicians, Rob Oakeshott and John Tingle. Tingle called the consortium ‘white knights’ and said their anonymity should not be seen as anything sinister, and spoke of Panthers’ ‘aggressive takeover program’. Richard Face, became involved and asked the DGR look into the situation.
It could all have been clarified with just one phone call: a copy of the memorandum of understanding would have been available to anyone who asked for it within hours. There was nothing secret about it.
The story moved into the annals of NSW parliamentary history. In state parliament, in answer to a Tingle question, minister for gaming and racing, Richard Face said the happenings in Port Macquarie in October 2001 have ‘strengthened my resolve to reform laws relating to club amalgamations’.
Hansard [27.10.2001] records the minister saying,
The new legislation will require that two clubs that are proposing to amalgamate will have to enter into a deed of amalgamation, clearly setting out key information about the amalgamation. One of the key areas … covered in the deed will be a statement as to what degree the management and staff of the dissolving club are to be retained by the continuing club. The deed will also be required to outline how the local identity of the club is maintained by the continuing club after the amalgamation.
Ironically, each of the legislated gaming reform measures were already part of Panthers’ amalgamation model. They had been resolved and approved by the Club’s management and board in 1999, far in advance of the minister’s announcement of the reform package in July 2001.
The minister could have discovered, in less than an hour, that Panthers was actually doing more to protect the interests of the amalgamating clubs than anything he was proposing.
The Port Macquarie issue was finally resolved by a postal vote. Around 15,000 ballot papers were sent to members. Col Munro said a disused police cell was hired to keep the votes secure until they were counted. Counting took place at the police station, each side had scrutineers, and a policeman wandered around keeping an eye on things. Of the 6399 members who responded, 4459 voted to amalgamate with Panthers.
Panthers Port Macquarie
This was the only time that Panthers continued with an amalgamation that was supported by less than 90% of the members of the amalgamating club. This was only a 70% majority. It was the policy of Panthers’ management team to steer clear of local conflicts. If the members wanted to join up with Panthers it would go ahead. In the case of Port Macquarie, the genuine interest and sincerity of people like Col Munro, David Meidling and others was a convincing influence to bend the policy.
Janine Graham says that ultimately it was people power that made the decision.
There was a great deal of ‘spin’ on both sides, but in the end Panthers probably did their job a little better. I would really like to know how they managed to find those agents in Port to wage that campaign for them. It was grapevine and word-of-mouth that made it all happen.
Cowan says it seems that few people in Port Macquarie are aware that it was the ‘agents’ who found Panthers, rather than the other way round. And it was these agents who waged the war and saved the club from a deal that put it at grave risk of having no club at all in ten years.
The 19 faceless men probably agreed to invest $100,000 each. The lower debt negotiated by Panthers meant that the remaining $6.5 million would have been easily borrowed on the security of the valuable real estate they were buying. Recent valuations indicate that each individual investment of $100,000 would already [in 2007] be worth more than $1 million. No wonder they fought so hard to discredit Panthers.
But the politicians had no excuse. They had a responsibility to get to the truth before taking sides – and all it needed was a phone call.
From the Panthers Passion Politics Digital Archive
The Port Macquarie Amalgamation — A Contemporary Record: “Shenanigans” at Port Follow the controversy through contemporary Port Macquarie News reports and NSW Parliamentary records, from the original support for amalgamation in 2000 through the competing proposals, political intervention and eventual conditional approval in December 2001.
An example of the unexpected bonuses emerging from Panthers’ amalgamations comes from Port Macquarie. When Panthers amalgamated with Port Macquarie RSL1, it also picked up a small bowling club out of town that had already amalgamated with the RSL Club. This little club may end up being one of the jewels in the Panthers crown.2 The Hibbard Bowling Club is on 12 acres of land, with its own sports complex in a residential area. In 2005 council approved a new development of 3000 homes. The new estate backs onto the club’s playing fields, and the area is not far from the Port Macquarie airport. Locals believe Hibbard will become a major satellite suburb of the city, and its Panthers club will be an important part of that new community.
Amalgamations have helped to pump life back into communities that might otherwise have lost their club — along with its sporting amenities, inexpensive meeting rooms and the donations that are part of the club ethos.
Even where amalgamation offered a struggling club a way forward, change was not always readily accepted. Newcastle Panthers former CEO, Bob Adamson, spoke of the way that Panthers’ systems were implemented into each amalgamated club. There were manuals and documented procedures covering every facet of the business, designed to make the operational transition as seamless as possible. But bringing in the Panthers culture was not always so straightforward.
Thomas Paynter had spent some time at Bathurst Panthers before he took on the job of CEO at Port Panthers. He says that the amalgamation in Port was not as smooth as it had been in Bathurst.
There are still some people – members, and a few staff – that do not accept it. They don’t realise that without other clubs coming in, they will fold. There are still people here that believe that clubs should be the same as they were 20 years ago. It’s not just us – another local club is in the process of an amalgamation at the moment, and it’s copping the same sort of flack. People are leaving the club, saying they will never come back. They’re very set in their ways around here.
Growth from one site to 14 was inevitably going to be punctuated by mistakes. Making mistakes is not as bad as being too slow to correct them.
The first general manager appointed by Panthers to the Port Macquarie club proved unpopular with local staff, and his management style appeared at odds with the Panthers culture they had been promised.To staff, he was the antithesis of everything they had been told of Panthers’ philosophy.
Janette Hyde, marketing manager of the Port Macquarie club, had been there many years. She immediately clashed with the new CEO.
He could be very charming, but he had this other side. We were pretty confused. This wasn’t what we expected at all. But we all thought, “Well, this must be what Panthers wants”, so we weren’t saying anything.
We’d heard so much about the Panthers culture …we really cared about the club. And we cared about Panthers. We wanted to be loyal to the new Panthers brand.
When she approached the manager about the way he was treating staff, she was given a formal warning.
Hyde, who said she has seldom taken sick leave, was placed on stress leave. Word soon got out in the community.
Port Macquarie News editor Janine Graham said it was a major topic of conversation.
Janette was the face of the club. She was involved in the community to an enormous extent. The town was very protective of her. You’ve got all these old guys that have been coming in, sitting on their same stools for the past ten years, and they hear that Janette’s off on stress leave!
The whole Panthers culture thing sounded great but this guy was certainly not what we’d been told about the way Panthers does things.
“To give them credit’, says Graham, ‘as soon as they found out about him, they reacted”.
Hyde says that word got through to Penrith that she was on stress leave.
Glenn [Matthews] rang me and asked what was wrong. I said, “I’m going to tell you, even if it costs me my job”.
She says Panthers investigated, talked to others in the club, and found out what was going on. The general manager left, and long-time Panthers manager Don Ellks was appointed as caretaker until Thomas Paynter was able to step into the role.
Hyde said much of the good work that had been done to convince Port Macquarie that Panthers was the best option had been undone.
Another incident was to help overcome these early negative impressions.
Before the Panthers amalgamation, the club had found that its food operation was not financially viable and had contracted a chef to run that side of the business. All the catering staff were transferred to the contractor’s books. Hyde says that while he turned the club’s food operation around, he ultimately went under himself.
He’d kept all the staff, and some of them were not what you’d call good workers. In the two years he was here, he only sacked one person – and he should’ve sacked about 12.
Hyde says that the contractor was in danger of losing everything, including his house. Panthers management heard of his predicament and guaranteed some of the debt. It gave him time to sort things out, and he was able to hang on to his house. When the business folded, all employees were transferred back to Panthers with their entitlements intact, although she adds that some of the more unproductive ones were paid out.
This particular episode would also stand Panthers in good stead with another potential amalgamating club. Gary Kennedy was a board member of ClubNova in Newcastle when discussions came up about a merger with Panthers. Kennedy was also secretary of the Newcastle Trades Hall,3 the seat of union power in that city.
The experience at Port Macquarie suggests that a takeover-style amalgamation would have faced formidable opposition. The evidence from Newcastle also suggests that ClubNova may not have come on board under such a model. Without those two important additions to the group, the attraction of a property trust4 would have been considerably reduced in the marketplace.
For Panthers it had proved an extraordinarily successful strategy — one that was embarked upon with consensus between Board and management. Why then was it the basis of some of the most costly and bitter disagreements?
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The Port Macquarie amalgamation became one of the most controversial undertaken by Panthers. The fuller story, removed from the original narrative for this edition, is available in Beyond the Book: Not Your Everyday Amalgamations — Shenanigans in Port. ↩︎
This assessment reflects expectations at the time the original manuscript was written in 2007. In 2014, Hibbard Sports Club de-amalgamated from the Panthers Group, with the club and property returning to local control. The club subsequently experienced financial difficulties and entered liquidation in 2024. It is now permanently closed, with the 12-acre (4.8-hectare) property offered for sale. ↩︎
Gary Kennedy resigned his position as Secretary of Newcastle Trades Hall in July 2014. ↩︎
The idea of a property trust had been introduced by Panthers’ then Financial Controller, Glenn Matthews, as Panthers began its amalgamation strategy. See Part 28 — The System is the Solution. ↩︎
Glenn Matthews Image Source: The Panthers: Men in Black
Glenn Matthews
Accountant, Chief Financial Officer and Chief Executive Officer
Few people contributed to—and witnessed—the modern development of Penrith Panthers as closely as Glenn Matthews.
Joining Panthers in March 1984, on the very day the club’s administration moved into its new Mulgoa Road premises, Matthews would spend the next twenty-six years helping guide the organisation through one of the most significant periods in its history. During that time he progressed from accountant to Chief Financial Officer and ultimately succeeded Roger Cowan as Chief Executive Officer in 2005.
His career spanned the club’s transformation from a rapidly expanding regional licensed club into one of Australia’s leading community organisations, providing a unique perspective on both its growth and the challenges that accompanied that success.
Role in the Narrative
Glenn Matthews appears throughout the middle and later pages of the Panthers, Passion & Politics narrative.
Unlike many figures whose involvement centred primarily on football or board administration, Matthews worked across almost every aspect of the organisation. His responsibilities evolved well beyond finance to include commercial development, strategic planning, football administration and executive leadership.
He was directly involved in many of the defining events covered throughout this series, including:
the move into the Mulgoa Road premises;
Panthers’ commercial expansion during the 1980s;
development of the organisation’s management culture;
the organisational restructure of the early 90s;
football administration;
the Temby Inquiry, the conflict preceding it and its aftermath;
Roger Cowan’s retirement;
the Global Financial Crisis;
development of Panthers Property Trust;
Panthers’ transition into a new phase of executive leadership.
Because his career bridged both Roger Cowan’s administration and the years immediately following, Matthews provides an important perspective on the continuity—and eventual evolution—of the Panthers organisation.
Background
Born: 17 September
Raised in Campbelltown before later settling in Western Sydney, Matthews developed an early interest in mathematics and accounting while simultaneously pursuing competitive barefoot water skiing, eventually becoming an Australian representative coach.
He also developed a lifelong passion for endurance sport. A long-time member of the Panthers Triathlon Club, Matthews completed eighteen Ironman-distance events, including the Ironman World Championship at Kona, Hawaii. His achievements earned recognition as an Ironman Legend — an accomplishment reflecting the discipline, persistence and resilience that also characterised his professional career.
He joined Panthers in March 1984 as an accountant – at the very momemnt Panthers was moving from Station Street to Mulgoa Rd.
We looked at it [the Mulgoa Road building] and thought there was just no way the place was going to be ready. But somehow it became ready … People justed pitched in and got stuff done.
from Western Weekender Podcast: On the Record 26 February 2024
That spirit of shared responsibility and willingness to step beyond formal job descriptions would become one of the defining characteristics of Panthers during Matthews’ career—and one of the organisational strengths he most admired.
Panthers Roles
Accountant
Chief Financial Officer
Reserve Grade Trainer
Senior Executive
Group General Manager
Chief Executive Officer (2005-2010)
Throughout his career Matthews accepted responsibilities well beyond traditional financial management, becoming involved in commercial ventures, organisational development, football administration and strategic planning across the wider Panthers Group.
Leadership and Culture
Matthews has consistently acknowledged Roger Cowan as the greatest influence on his development as a leader.
Working alongside Cowan during Panthers’ formative years exposed him to a management philosophy built upon trust, accountability and personal responsibility. Matthews has often recalled the lessons he learnt about treating people with respect, empowering staff to make decisions and responding to mistakes with honesty rather than blame.
One incident early in his career, when he admitted to a significant financial forecasting error, became a defining leadership lesson. Rather than reacting with anger, Cowan focused on solving the problem—an approach Matthews later identified as fundamental in shaping his own leadership style.
Those experiences would later influence Matthews’ own approach to leadership as he assumed increasingly senior responsibilities within the organisation.
Contribution to Panthers
Matthews’ contribution extended well beyond finance.
Throughout the 1980s and 1990s he became closely involved in commercial development, organisational planning, tourism initiatives, football administration and strategic projects across the Panthers Group.
Among those projects was the development of the Panthers Cable Ski Park, where Matthews became actively involved in both management and promotion, later overseeing its redevelopment through new accommodation and tourism initiatives. His willingness to move beyond the traditional boundaries of accounting reflected the increasingly integrated management culture that characterised Panthers during this period.
Cheif Executive Officer
Matthews succeeded Roger Cowan as Chief Executive Officer in 2005 during one of the most challenging periods in Panthers’ history.
Rather than inheriting an era of rapid expansion, he assumed leadership as the organisation confronted increasing complexity, significant football decisions, the Global Financial Crisis and growing regulatory pressures affecting licensed clubs, and a Board grappling with the fallout from a major, public and damaging Inquiry.
Matthews has reflected that while Cowan’s strengths lay in innovation and growth, his own strengths were better suited to leading organisations through periods of operational and financial challenge.
Relevance to Events Described
Many of the major events described throughout this series either involved Matthews directly or occurred while he occupied senior executive positions.
His experience provides valuable insight into the reasoning behind many of the decisions discussed elsewhere in the narrative, particularly those involving organisational development, commercial strategy, football administration and executive leadership.
His experience provides valuable insight into the reasoning behind many of the decisions discussed elsewhere in the narrative, particularly those involving organisational development, commercial strategy, football administration and executive leadership.
Legacy
Glenn Matthews occupies a distinctive place in Panthers’ history.
He experienced the organisation as a young accountant during the move to Mulgoa Road, helped shape many of its commercial and organisational developments, and ultimately became the executive entrusted with leading the club following Roger Cowan’s retirement.
His career spans one of the most significant periods of change in Panthers’ history and provides an important link between the organisation’s formative vision and its emergence as one of Australia’s leading licensed club organisations.
Although remembered as a senior executive, Matthews’ influence extended well beyond management. His commitment to developing people, embracing new challenges and serving the organisation across multiple disciplines reflected a culture in which leadership was earned through contribution rather than position.
The NSW Government’s attention to Panthers’ amalgamation strategy sharpened as the program gathered momentum. There was growing concern within government about the expansion of large clubs. It was never clear whether Mulock directly influenced those concerns about Panthers’ growth, although his publicly expressed opposition to the expansion broadly coincided with views emerging within government.
Pat Rogan was chairman of Clubs NSW during the amalgamation years and had also spent 25 years as a NSW Labor politician. His background gave him a perspective from both sides of the debate.He says that the then Minister for Gaming and Racing, Richard Face, saw the club’s amalgamation process as Panthers gobbling up the rest of the industry. Rogan says that Face did not accept that, in most cases, Panthers was saving clubs from closing down completely.
I told him [Face] that his view was wrong. Panthers was not going out head-hunting. The reverse was happening. There was a regular stream of clubs coming to Panthers. I also told him that the members of the clubs had to vote on any amalgamation, and that Cowan himself had insisted on a 70 per cent majority of members, rather than 50 per cent – otherwise no amalgamation could go through.
Michael Egan was NSW Treasurer at the time. Rogan says the Treasurer held similar views to the Minister, believing that the club industry had “lost its way”. In 2003, Egan introduced substantially increased taxes on poker machine revenue, adding another dimension to the growing conflict between the Government and the club industry.
Clubs NSW CEO David Costello says there was a misguided perception in the Labor government at the time that big was not good.
It’s paradoxical. Michael Egan knew that 97 per cent of all their gaming tax comes from the largest of clubs – that part he was happy with, because it’s an enormous amount of revenue. He didn’t like clubs getting big, but he was happy to take the money.
Clubs have closed in the past few years, and he expects to see more
The effects of the new taxes are starting to be felt, and now there are new smoking regulations that will force clubs to spend large amounts of money on renovations. Some will just not be able to afford it.
In the aftermath of Penrith’s amalgamation push, the government changed the law to implement a ceiling of four on amalgamations. David Costello has dubbed it the ‘Penrith Bill’. He says that Panthers’ vision caused the government to change the law to control its growth.1
The government was uncomfortable with the rate that Panthers was growing. They didn’t bother to try to understand that particular phenomenon, and over-reacted.
The chief executive of Easts Leagues Club, Rob Riddle, says that he never saw Panthers’ 14 clubs as a negative for the industry,
But it scared the life out of the government, so they then turned around and put a cap on it. In my view, their perception was, if a club is weak, it should be allowed to fall by the wayside, and the strong ones should grow. Well, that may be the case, but there’s a lot of sporting fields, bowling greens and other facilities that are no longer going to be available to the community if that’s allowed to happen.
The problem with a limit is that now everyone has to choose. You’re only allowed four, and you think, that poor club down the road is about to fold. So what do I do? Do I save that poor bowling club, or wait for something bigger that seems more attractive – and that can provide me with more growth potential? I would certainly do more [amalgamations] if I could.
Early in 2007, with a state election imminent, the four club ceiling was raised to ten.2
Since the Carr government came to power in 1995, 100 clubs have closed, with another 142 being forced to amalgamate to avoid closure. At the same time, corporate ownership of hotels and their gaming machine entitlements was becoming increasingly concentrated, placing a large proportion of poker machines in the hands of business corporations.3 A single poker machine returns $120,000 to its corporate owner, with none of the regulations that require clubs to return part of poker machine revenues to the community.
Industry leaders argued that the limit had consequences beyond restricting the growth of organisations such as Panthers. As clubs across the state struggled, it also reduced the options available to those seeking an amalgamation partner.
Costello says many more clubs would have amalgamated with Panthers given half a chance.
And the fact of the matter is, that if Penrith hadn’t come to the rescue of those clubs, the majority would be closed today, and those communities would have lost the facilities.
Anyway, it’s a global trend, consolidation of companies is a fact of life. You have to be able to grow your business, and Roger had a vision that nobody else had –twenty years ago, maybe more. He said, I’ve got to have a business on a certain scale, and I have to identify the growing areas, identify the range of products and services and community support that would make a successful club.
Panthers’ amalgamation program did everything expected of it and more. It delivered valuable assets and added to the brand. There were some unexpected bonuses.
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The four-club ceiling was introduced as part of the Gaming Machines Bill 2001. In the Legislative Council second-reading debate on 6 December 2001, the Government stated: “Amalgamations are to be limited to no more than 4 per club”, subject to geographical and transitional exceptions. During the debate, John Tingle specifically referred to the need to curb the expansion of large registered clubs “such as Penrith Panthers”. David Costello’s description of the legislation as the “Penrith Bill” is his own characterisation, but the contemporary parliamentary debate confirms that Panthers’ expansion was expressly raised in support of restricting club amalgamations. Source: NSW Legislative Council Hansard, Gaming Machines Bill, Second Reading, 6 December 2001. ↩︎
The Registered Clubs Amendment Bill 2006 increased the maximum number of amalgamations a club could enter into from four to ten. In introducing the Bill, the Government acknowledged that some club groups already at the four-club limit were operating successfully and were capable of assisting additional clubs. It also noted that profitable clubs were frequently approached by smaller clubs seeking amalgamation, but those already at the limit sometimes had no choice but to refuse. Source: NSW Legislative Council Hansard, Registered Clubs Amendment Bill, Second Reading, 16 November 2006. ↩︎
For example Woolworths through ALH Group (Australian Leisure and Hospitality Group) became one of the state’s largest operators of gaming machines. It is now Endeavour Group which is the largest hotel operator in Australia with over 350 licensed venues nationwide. ↩︎
As the number of amalgamated clubs grew, a question that had been largely theoretical at the beginning of the strategy became increasingly important: how should a club spread across so many communities ultimately be governed?
In October 2001, when the Penrith Board asked management to suggest a structure of governance for the entire group, Cowan approached it from the point of view that Panthers had evolved into one club – one business – spread over many sites. On 23 October, he presented a paper to the Board setting out his views, and his recommendations.
I believed that any nine people – normal, reasonable, dedicated people – who could be elected to govern such a club would act in its best interest. I did not see any reason to believe that a director appointed from Bathurst would be of any lesser quality than one appointed from Penrith. My approach, therefore, was to have as much representation as possible from outside Penrith in the governing body, without making a Board that was cumbersome by its size.
Having a spread of representation from all sites would display a commitment to the principle of amalgamation rather than takeover. In addition, it would ensure that every decision was argued from the point of view of benefiting the entire group rather than one of its sites. My recommendation was therefore to have a nine-person board, to include three representatives from the Penrith club and a maximum of two from any other club. That would have ensured input to group policy by at least four out of the 14 sites, and possibly as many as seven.
All sites including Penrith would elect their own governing bodies to handle the local issues.
To my way of thinking Panthers was no longer a Penrith club. It was a NSW club with its largest branch and most of its administration at a Penrith headquarters, and other important branches in other areas of the state.
When Cowan put his group board model to the Board, it was met by hostility. He was accused of trying to ‘sell off’ Panthers to outside interests. John Bateman told the Inquiry the paper ‘set alarm bells ringing’. He said,
It was something that I didn’t agree with. We made it clear to management if we were going to go into amalgamation with other clubs, it was essential that the Penrith entity maintain control of the whole organisation.
But was that consistent with the Board’s earlier decisions?
This was moving the goalposts in the middle of the game.
Bateman was legally trained, and he had been party to all the discussions about the parameters within which management could pursue amalgamations.1 The Board had approved parameters that did not discriminate between members, no matter where they lived. The memoranda of understanding offered full membership rights to members of amalgamating clubs.
Evidence to the Inquiry revealed the viewpoint of some members of the Board. Asked what he saw as the threats in the amalgamation with ClubNova in Newcastle, Bateman admitted that some directors feared losing control of the organisation. When asked if that included the possibility that he could be voted off, he said yes, that that was the case.
Throughout the Inquiry, the Footy Five directors spoke of their desire to look after the interests of Club members.
On further questioning, however, they admit that the members they refer to were Penrith members. Evans even said that he did not believe that it was right that members of the amalgamating clubs should have the same rights as the Penrith members.2
But the Board set the policies, and all amalgamations were completed within those policies.3
Cowan saw the notion that he was ‘selling off’ Panthers as just another red herring. In his model, Penrith would still have had its own advisory board. It would retain its identity and its importance as the headquarters of the group.
Management had pursued the concept of amalgamations with great success. But it was such a success that those directors opposed to Cowan’s governance model came to a different view of what the amalgamation structure should be.
What they wanted was takeovers.
But by then the Club had agreed to amalgamations on terms agreed by the Board.
After the Board rejected Cowan’s group board model, he put a modified version to a subsequent meeting.
I still believed that the Board would be more productive if it had less Penrith people and more representation from the entire group. I thought the modified version might be seen as a suitable compromise although the principle was the same.
Craig Terry became quite agitated and said something to the effect, “How dare you keep raising a suggestion that you know the board does not want to hear”.
Imagine if the Board of Telstra or Microsoft decided to opt for a situation in which their CEO was restricted from telling them anything they didn’t want to hear.
As the Club continued along the amalgamation path, the divide between management and some directors grew.
In Macquarie St in Sydney, Panthers’ amalgamation strategy was attracting attention.
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Moreover, , as noted earlier, the Board required management to submit each individual amalgamation to the Board for approval. ↩︎
The Temby Report subsequently found that concerns about the growing membership of amalgamated clubs included concerns among at least some existing directors about protecting their own positions. Temby also found that Cowan had been authorised by the Board to represent to members of amalgamating clubs that they would have the same entitlement as existing Penrith members, but that subsequent Board actions resulted in those promises being broken. See Inquiry In Relation To Penrith Rugby League Club Ltd — conducted by Ian Temby QC —Report, Chapter 4, Amalgamations, and Chapter 7, Voting Rights — Promises Made, Then Broken?. ↩︎
The original manuscript continued here with a broader reflection on the different perspectives Cowan believed business people and politicians brought to decision-making. That section has been removed from the main narrative and is available in Beyond the Book: Politics, Business and Two Different Visions of Panthers. ↩︎
A removed section from the original Chapter 13: Amalgamations Not Takeovers.This section originally during the discussion of the growing disagreement over Panthers’ amalgamation strategy. It was removed from the main narrative because it moves beyond the events themselves into Roger Cowan’s interpretation of why he and Ron Mulock — and, more broadly, management and some directors — appeared to see the future of Panthers so differently.
It is retained here because that interpretation offers another perspective on a conflict that would become increasingly important in the chapters that followed.
Ron Mulock had been critical about Panthers getting ‘too big’ even before the amalgamations strategy surfaced. This was also the strongly held view of the Treasurer, Michael Egan, and many in the NSW Labor Party.
Cowan used a particularly vivid analogy to describe what he saw as Mulock’s inflexibility. When a shark swims into a net, it is unable to change direction or reverse out of it. It will keep swimming in the same direction; nose into the net, until it drowns.
A number of observations and experiences added to my feeling that Mulock suffered from a similar inflexibility in his thought processes. Once he had made up his mind to go in a certain direction, once he believed he was right, there was no turning. No amount of new information could convince him to reconsider his position. On one particular occasion, when the rugby league merger saga was at it nastiest, I arranged to meet Mulock to see if we could sort out our problems on a man-to-man basis. At the finish of that meeting, I was left with the impression that he had not heard a word I said.
Cowan believes that this type of inflexibility would be a fatal flaw in the CEO of an organisation with close to a thousand employees. But Mulock’s experience was in a law office and a seat in politics – places where inflexibility may even be advantageous.
Cowan saw an important difference between the pressures operating on business leaders and politicians. A CEO, in his view, had to respond continually to changing business data, technology, expert opinion, personnel and economic circumstances. A decision that worked yesterday might fail tomorrow. Flexibility was therefore essential.
The Panthers belief in teams, participation, flexibility, leadership, Twin Citizenship1, creativity and other management values was philosophically in conflict with what Cowan believes to be the narrow world view taken by Mulock.
But the argument of what is important to a politician has to be raised here too. Cowan thought in big pictures where there were no limits. His vision of Panthers was always bigger, better and more beautiful than it had achieved so far. He was thinking like that when he took over management of the tiny club with 26 poker machines and was still thinking the same way when he could see Panthers as a state-wide organisation with many successful branches – an organisation that now has such a solid backing of assets that it would be able to survive the worst downturns.
Supporting rugby league to Cowan was a long-term challenge that would be met by all round growth and success rather than an annual drive to outdo the extravagances of the previous year. His vision for Panthers was always long term rather than short term, looking at possibilities way into the future and always seeking ways of taking advantage.
That vision included rugby league supporters all over the state driving TV audiences when Panthers was competing. The possibility that one day supporters may have to pay to watch some rugby league games on television was a consideration in establishing Panther clubs in other areas. If it never happened, it would make no difference.
Politicians probably need to be more focused on tomorrow’s headlines and the elections next year. CEOs know that the decisions they make tomorrow can have an impact on outcomes years into the future.
It was little wonder the two were in conflict. From Cowan’s point of view:
I always had a strong feeling that the real conflict between Mulock and me was the conflict between the big picture view of a long-term future and a narrow short-term view centred on a football team. Perhaps my frustration with this narrow approach was shared by Neville Wran. Mulock briefly served as his deputy around 1984.
Graham Richardson, in his bookWhatever it Takes, quotesthe Labor elder describing Mulock in extremely disparaging terms. I choose not to repeat his words, but Wran’s description demonstrates very clearly that I am not the only person who was ever reduced to sheer frustration when dealing with Ron Mulock.
Mulock always seemed to me to be narrowly focused on Penrith and the here and now. His attitude as the Club grew seemed to indicate a belief that a medium sized club supporting the Penrith rugby league team was the be all and end all. The growth of the Club and its expansion into other parts of the state were way outside his range of vision, even had he the benefit of the world’s most powerful telescope. Of course, he would probably have never held himself accountable if he had been successful in influencing strategy that terminated growth to the point where the Club proved to be too small to be competitive in an increasingly professional rugby league competition.
Now I come to think of it, the shark analogy also fitted most of the Five. In hindsight, it occurs to me that my conflict with them might have had the same roots – and I failed to see it at the time. I was dealing with some directors holding a narrow and limited vision for Panthers. It seemed to me that most of the conflict in the boardroom was about strategy for elections. The long-term success of Panthers seemed a secondary consideration.2
Barrister Terrence Lynch has observed the opposition of two views when he attended the 2005 AGM.
Roger gave his address, and he was speaking of the club, its growth, its amenities and the new sites. Later, Ron Mulock and some others spoke, strongly criticising the amalgamations.
Each group had an entirely different perception. The Mulock group – was speaking of a Penrith identity. It was about geography and their football team. , and I don’t think that was Roger’s conception at all. Neither party ever seemed to recognise that they were proceeding from entirely different premises, so all they could do was snarl at each other.
They were early joiners, the club was small, Penrith was much more remote and they all knew each other. So there’s all the history and networks and personal associations.
It’s resistance to change, it’s hanging on to the past and what you know. It’s what many older people tend to do. They identify with the institutions that are part of their lives, be it the suburb, city, country where they live – or the customs and culture of their society, or their club. If you try to change that, it feels like an attack on them.
And though they’d never admit it, to an extent, his success in building the club and the brand outside Penrith fed their pride about the city, and in fact, even reinforced their sense of their special connection to it. To them, Penrith is a very discrete notion, and they could never conceive it in the way that Roger did.
Seen this way, the disagreement was about more than amalgamations. It reflected two different conceptions of Panthers itself. One began with Penrith — its history, its football team and its local identity. The other increasingly saw Panthers as an organisation capable of carrying that identity far beyond Penrith.
Neither perspective made conflict inevitable. But if Lynch was right that the two sides were arguing from different premises without fully recognising it, it helps explain why agreement became increasingly difficult to find.
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The concept of “Twin Citizenship” comes Charles Handy’s book, The Empty Raincoat. This book had a powerful influence over the Panthers management team through the 1990s. The concept illustrated the fact that a team member can simultaneously hold strong loyalties, sense of belonging and responsibilities to multiple distinct groups. This was an extraordinarily important concept when it came to the amalgamation philosophies with venue management and staff having a strong sense of ownership of their local operational and strategic efforts while also understanding, supporting and owning the needs of the entire Panthers Group. ↩︎
The reference to “the Five” reflects terminology used retrospectively in the original manuscript. The group later became publicly known as the “Footy Five”; that label and its effect on interpretation are discussed in Beyond the Book: The Footy Five — The Name That Rewrote the Story. ↩︎
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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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. ↩︎
When Roger Cowan made that statement to Ian Temby, it reflected the philosophy that he had held since he first embraced the concept of amalgamations. It was another factor that helped to put him in that very courtroom on that day in June 2004.
The topic of amalgamations was first raised at Panthers in 1998 by John Wilson, who was then the Club’s gaming manager. The Registered Clubs Act had been amended to encourage the practice, and Wilson had come to believe there was a great opportunity there.1
For a number of reasons, the rate of club closures had been increasing, and the change to the law was aimed at slowing down the trend.
At management meetings Wilson continued to argue strongly for the concept. Eventually a model was developed that overcame most of the concerns and it was agreed that an amalgamation strategy should be recommended to the Board.
The board resolved to test the strategy with a small struggling club not far away from Penrith – the Hawkesbury Sporting Club in Richmond. This first amalgamation would be a pilot for bigger things in the future. It had some reasonable potential, although it would not deliver the level of benefits that we hoped to achieve in other amalgamations.
It would help us learn more about what difficulties might lie ahead and to develop systems to overcome them. We believed that we could easily turn the club around, by introducing our management systems and by taking advantage of our purchasing power.
We would support them in every way needed, but our model provided that they would always be able to retain their identity and a strong sense of ownership of the club. This would, in turn, encourage a strong commitment to service their local members
When a business is considering something as important as this, the focus has to be on the desired outcomes rather than what has to be done. Management decided on a set of outcomes for the future that show us our amalgamation strategy had been successful. We needed agreement between Board and management on that future picture, and it was extraordinarily difficult to achieve. The failure to reach agreement delayed the start of the strategy for nearly twelve months.
On the one hand, we could look upon each amalgamation as the formation of a new entity in which all stakeholders would have equal rights. In the alternative picture, one club is in the centre, having the power and control over all its subsidiaries. The first model is a true amalgamation. The second example is effectively a takeover.
The management of Panthers always believed the first model would be the pathway to success, whereas the takeover path would eventually create limits and barriers. We believed that we finally had an agreement with the Board on the vision when we submitted a detailed list of the criteria that would be used to qualify clubs under consideration. Everything seemed to be covered and it was discussed to death before the Board gave it the final approval.
The word ‘takeover’ does appear in some early documents, but from day one, Cowan’s original concept was of amalgamation.2 Later, some of the Five would claim that they thought they were agreeing to takeovers, not amalgamations, and that they had been misled by management.
Barry Walsh was chairman of the board when management first floated the amalgamation idea. He says they discussed the concept for more than a year, but there were problems convincing some directors. ‘I saw a number of benefits’, says Walsh.
The outcomes described by management sounded plausible, achievable and worthwhile. We were given a lot of information, and it was obvious to me that they had gone into an extensive research and analysis process. I could see the benefits of spreading our brand into other areas of the state, developing a larger rugby league following, and building assets and cash flow. Because of the financial situations of these clubs, we could get them at very good rates.
While documenting the benefits of amalgamation, the management recommendation put to the Board also highlighted one of the negatives. It would open the possibility that members of another club could nominate for the Board. At the time, this was not seen as an immediate problem, because it was thought they would have to be members for three years before they could stand.
Nevertheless, the prospect that members of an amalgamated club could stand for the Board, even after three years, raised the concerns of some board members to the extent that they simply could not reach agreement. The spectre of ‘reverse takeover’ had entered the picture.
The boardroom delays on the Hawkesbury proposal became very frustrating for management. They tried to explain that amalgamations could help the club to overcome some of the problems it was currently facing in a changing local market.
The threats it faced included over-capitalisation on one site, and the maturity of the local gaming market. Hotels and other clubs were continually improving. In previous years it had been commonplace for bus companies to bring tourists to Panthers from other areas such as Manly, Wollongong and country NSW. The improvement in club facilities in other areas had weakened that business.
Another threat was the attitude of the state government towards clubs, and the associated rumours of higher taxes and restrictive legislation.
There was also the danger of being dependent on one business, in one location, which was already suffering under the strains of its size.
At one Board meeting called specifically to consider whether to adopt an amalgamation strategy, the discussion circled laboriously for nearly four hours. Cowan says the final hour could have been completely eliminated had there been a recording of the first hour. After all that time, the only resolution was that management should prepare further documentation to prove that the threats actually existed.
A frustrated management team came to the conclusion that the entire exercise had been a deliberate waste of time, and that the request for more information was just an excuse to put off making a decision. Deferring a decision was easier than raising logical argument.
To the management team, the threats were very real – and very obvious. They also should have been obvious to the Board. But how could it be proven that the government attitude, for example, was a threat? Today every club in the state would agree that it was the greatest threat of all.3
A major benefit of amalgamation would be the spreading of support for the rugby league team. That, in turn, would boost opportunities in sponsorship, merchandising and television. With the advent of Pay TV, management considered television exposure as a crucial part of its future success, particularly with the possibility of clubs being rewarded through their popularity on that medium.
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.
Many of the clubs seeking to amalgamate had assets far more valuable than their liabilities, which would have a positive effect on the Club’s balance sheet. This could lay the foundation for future expansion into other profitable areas, and most importantly, it could be a way for Panthers to begin to break its dependency on gaming.
Former director Bateman, one of the Five who often spoke out against the amalgamation strategy, told the Temby Inquiry in 2004,
My initial attitude in regards to amalgamations was that we needed to explore it. I accepted there were pressures on our main source of revenue being gaming, and we needed to spread our wings.
He told Ian Temby – that ‘amalgamations were an appropriate way in which to extend outside our current Penrith base’.
Part of the management recommendation was a set of criteria for clubs wishing to amalgamate with Panthers. After 12 months, the Board agreed that an amalgamation strategy should become high priority. At that time, management was given authority to identify and pursue amalgamation possibilities.
The Board stipulated that every amalgamation must meet the criteria. Even then, there was no authority granted for amalgamations to proceed automatically. Each one had to be recommended and approved separately by the Board. Generally, a board sets policy, defines parameters and leaves management to work towards success within those parameters. In this case the Board put each new proposal under the microscope.
Although there was a lot of discussion about members of amalgamating clubs being able to stand for the Board, nothing was built into the criteria to provide against it. John Ralston4, an acknowledged legal expert in the club industry, had advised that it would be highly unlikely that the licensing court would approve an amalgamation unless the members of both clubs were treated equitably. He also reminded the Club that the Registered Clubs Act requires that at least 50% of members had to have the right to vote for the Board.
Management breathed a sigh of relief when it appeared that the five directors had finally agreed to a strategy that ensured all members be treated equally after amalgamation. At long last, it seemed they understood that the amalgamation strategy could only be successful if Panthers protected the rights of the members of the amalgamating club. Such beliefs by management were to prove naïve.
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The regulatory framework under the Registered Clubs Act increasingly recognised amalgamation as a means of dealing with clubs facing financial or operational difficulty. The Act provided for amalgamations subject to approval by club members and the licensing authority, with the Licensing Court supervising the amalgamation process and the transfer of the relevant club licence. The statutory framework governing amalgamations was subsequently expanded substantially in 2001. ↩︎
The terminology used in some early documentation was not always consistent. The distinction being drawn here is between the use of the word takeover and the model advocated by Cowan, under which amalgamating clubs would retain identity and local involvement and their members would ultimately share rights within the wider Panthers organisation. ↩︎
“Today” refers to the time of writing of the original manuscript in 2007. ↩︎
John Ralston BA LLB (Sydney University) was admitted to legal practice in 1975 and is today a consultant with Pigott Stinson. For more than 30 years he has acted extensively for registered clubs and practised across the wide scope of law affecting clubs and the club industry. Pigott Stinson describes him as one of the leading legal practitioners in the club industry. ↩︎
