Tag: Financial Management

The Temby Inquiry: Untangling the Phyro Arrangements

Part 71 — Original Chapter: Chapter 20: The Reaction to a Fruitless Inquiry

This article forms part of the serialised republication of Panthers, Passion & Politics – The Roger Cowan Years.

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Among the most complicated allegations examined by the Temby Inquiry were those concerning Phyro Holdings. The arrangements between Phyro and Panthers dated back to the early 1970s, making their reconstruction particularly demanding. Cowan says,

One of the criticisms that Temby made was that the Club didn’t really know what it owed me, and in 2002, I probably wasn’t sure either

From the time that the arrangement with Phyro began, I had always kept meticulous records of the work it did for the club. The trouble was, from about 1998, I had allowed myself to be drawn into conflict with some directors. By mid-2001 things were really starting to go downhill between Board and management. Then I had a heart attack and a bypass operation in January 2002. Six weeks later we were in the middle of a major conflict and I was back at work, full bang into the fight. They called Boon in, we had the aborted election and it was almost an all-in brawl a lot of the time.

Conflict in the boardroom was taking a lot of my time and energy. It started to dominate my thoughts and I began to take short cuts. I always made sure I was taking less than the contracts stipulated but sometimes I would put off doing an exact invoice because of more pressing issues. There was a time when the board executive used to come in every month and tick everything off, and the auditors used to check it regularly. My biggest regret during the inquiry was that I had not continued to maintain that quality of accounting.

The difficulty, as Cowan described it, was not the absence of records but the need to reconcile historical transactions with the contractual entitlements they represented.

Terrence Lynch says it was obvious from the outset that Phyro would be a contentious issue. In the months leading up to the announcement of the Inquiry the media had focused on its arrangements with Panthers. Michael Egan had made a number of comments on it, both in parliament and to the media. Phyro had been the subject of a front-page story and a feature article in the weekend Herald in September 2003, mentioning $2.9 million which had been paid by the Club to Phyro. This sum would be trotted out again and again by Herald journalist Paola Totaro in her stories covering the Inquiry, even after the facts surrounding it were brought out in evidence.

Most of the $2.9 million had been paid to third parties. More than $1 million went towards publishing and distributing 140,000 copies of Panthers Magazine each month, while another $1 million or more was spent on advertising. These were two examples of where the money went.

The contracts, in fact, spelled out very clearly that Cowan could not use his position to push more business to Phyro. How did this work? It was actually a quite simple arrangement. The contracts placed limits on the remuneration Phyro could receive from specified advertising and sponsorship activities. Those limits were intended to prevent Phyro’s financial benefit from increasing indefinitely as Panthers’ business expanded. However, the adequacy of the auditing and accounting arrangements would itself become an issue during the Inquiry.

Cowan agrees that it would have been inappropriate for his private company to hold open-ended contracts that could have been fattened by his decisions. That was never the case. He adds that if that had happened, it would certainly have come out in the extensive questioning and in the tens of thousands of pages of documents in the Temby Inquiry.

But from the day that Phyro started doing work for the Club, there was a limit on profit, and that was set in concrete by agreement with the Board executive. The Herald made continuous reference to a payment of $2.9 million to Phyro. It would have made no difference whether the sum was $2.9 million, or $29 million. The Phyro benefit would have been the same.

By the time the book was published in 2007, Phyro was no longer providing those services, and Panthers was paying other suppliers directly.

Allegations about Phyro in recent events could be countered readily enough. But Phyro’s longevity and Cowan’s insistence on confidentiality in his contracts obliged the Club’s counsel to rely on Cowan’s records for earlier years. Lynch describes how it was done:

Roger had told us that he had kept all these records, so very early in the piece, we actually forced him to go back over the previous ten years. We asked him to work out month by month what he was charging the club, and what he was getting over that entire period. It took some to-ing and fro-ing for Roger to get the idea of what we wanted, and the process was happening through the first part of the inquiry.

Something becomes obvious in Roger’s testimony if you read it – maybe if you didn’t see it happening, you wouldn’t know – but I could see it. As the reconstruction exercise progressed and clarified, Roger’s self-confidence in the witness box grew. At times in those first days, he sounded hesitant and fumbled over answers. One of the great fears you have when you face something like this is that you’re going to get a question about things eight years ago without notice. In that instant, how do you know whether you did something that long ago?

Reconstructing what he had done month by month was reassurance for himself, to let him know what he had done. So by the time they tried to drop a bundle on him, he had a very strong sense of how he had conducted himself.

And I believe that Temby responded to that. I think at some stage it started to dawn on him. I’m sure that at first, he probably did think there was corruption, but it dawned on him that there were deals, and some hanky panky accounting, but not corruption. No taking of money. For instance, when Roger said the figures were arbitrary in those first days, it sounded really bad, and everyone made a big issue of it, including the media. But through the process it came out, and Temby eventually got this, that the arbitrariness was about how you describe it, not about the actual figures. It was an arbitrary description that had nothing to do with dishonesty or corruption.

Cowan says there was one lucky break for him amongst all the blackness of the time.

I was becoming frustrated by questions that seemed to go around and around in circles, go nowhere, but leave the impression that I had taken more than my entitlements under the contracts. It was maximising the value of the inquiry for the media and making me look dishonest. Several times I gave evidence that I had taken less than my entitlements, and that the club owed me money. But of course there was no news value in that.

I asked John de Mestre, my legal counsel, to write a letter to the inquiry and offer a way to bring it to a head. The letter told them that they could select any forensic accountant of their choice to carry out a thorough audit of Phyro. I said I would pay for it, and I would make everything available to assist in such an audit. They refused my offer.

I thought it weird at the time, but now I wonder whether my goal – of  killing off media speculation – was one they preferred not to pursue. 

Later, I discovered that the exercise would have cost me around $200,000, so they did me a big favour.

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Commentary and Contributions

The Battle Over the Club Tax

Part 67 of 70 — Original Chapter: Chapter 19: Diverting Attention from a Tax Hike

This article forms part of the serialised republication of Panthers, Passion & Politics – The Roger Cowan Years.

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When Michael Egan brought down his 2003 Budget on 24 June 2003,1 it contained massive tax increases on registered clubs. The announcement caused great consternation across the club industry and its communities and triggered major protests, including two rallies held in Sydney.

In the year leading up to the increase, the government was in discussion with the state’s registered clubs’ peak body, ClubsNSW. Pat Rogan2, the organisation’s president, was assured that before any changes were made to taxes on poker machine revenue, there would be a period of consultation.

ClubsNSW CEO David Costello said both the former treasurer and the former minister for Gaming and Racing, Richard Face, had promised to consult the community before increasing the taxes. Some increase in tax was expected, and that was accepted in some quarters.

Speaking in early 2006, Costello said,

The industry has never been shy about paying a fair level of tax. But we’ve demonstrated – and the study carried out by the Allen Consulting Group bears this out — that the proposed legislation has the potential to destroy the industry.

Allen Consulting was the consulting firm engaged by ClubsNSW later in 2003 to carry out a study of the impact of the tax on the industry.

When the 2003 tax hikes were announced, Roger Cowan was one of the strongest critics. He believed the Labor government had no understanding of the potential of the club industry and that the tax increase was a short-sighted strategy that would destroy that potential.

The very people who have always been looked upon as the traditional supporters of the Labor Party were those who would be most hurt by the greedy tax grab. If there were an iota of business sense in the party, it would demand a proper study into the potential of clubs in the areas of community support, tourism, sport and recreation.

A clever government might even think of ways to maximise that potential by decreasing club taxes in such a way that its revenues would grow through increased business activity within the state, rather than destroying the potential.

They have no idea what they are destroying. But then they have the same shortsighted approach when they greedily grab extra revenue out of property transactions, and saddle motorists with tolls inflated because of secret deals with tollway operators. All these short-term grabs have dampened investment and damaged business momentum in NSW.

They were supposed to be running the biggest business in the country and they had no idea of one of the most basic principles: you must reinvest in the business to build it.

The day before the Budget was brought down, ClubsNSW representatives – including Pat Rogan – were called to Parliament House. Rogan recalls how the Treasurer told them about the changes.

I asked the Treasurer “What about our agreement? What about the review we were promised?”

Egan’s answer was, “We’ve done our own inquiries, and this is it.”

There was no more discussion. When I asked about the actual figures, I was told,  “You’ll find out tomorrow night.”

It was an especially bitter pill for Pat Rogan. He had spent more than 25 years in the NSW Parliament as the Labor member for East Hills and felt he was entitled to expect better treatment from the government.

Speaking in 2006, Rogan said it didn’t matter what anyone tried to say to Egan about the club industry.

He would say “You can talk to me all day about clubs, you’ll never convince me”.

Rogan and Egan had been comrades in parliament for 25 years. He believes that Egan was the driving force behind the campaign against the industry. Says Rogan:

Egan was vindictive, and Roger was a particular subject of his vindictiveness. Egan once told me, “Panthers will be gone in a couple of years”.

In their first story focusing on Panthers in September 2003, Sydney Morning Herald journalists Anne Davies and Paola Totaro3 describe Michael Egan as a ‘prodigious hater’.

They quoted Egan:

Panthers is no longer a community club. Penrith might be premiership material on the footy field but the registered club is a wooden spooner when it comes to supporting the community.4

The journalists noted that the club had made community donations of $2.26 million in 2001-02, given its football team $2.8 million, and that its net profit was $2 million. Rogan says,

Roger was always at the forefront of the fight.

Quite early on, I told him that big clubs had a problem with Egan.

On top of that, Richard Face saw Panthers’ amalgamations as head-hunting. Of course it wasn’t like that at all. All those clubs were in some type of financial difficulty, and they were approaching Panthers – at the rate of about one a week. But Face could never grasp it – he said that Panthers was “gobbling up the industry”.

Many in the club industry didn’t regard Face highly as the minister responsible for clubs.  They thought he did to make any real attempt to get a proper understanding of the industry workings.

To Cowan and others in the club industry, statements made by Egan around the time of the Budget indicated that he did not fully understand the role of clubs in the community, the way they operated or the profits they made. He certainly was quick to disregard all the rationale presented by those opposed to the tax.

For instance, unlike regular company tax, it was clubs’ revenue that was being taxed, not their profits. ‘This tax applies irrespective of profit’, says David Costello. ‘And it poses a serious threat to the financial viability of many clubs.’

Roger Cowan had first-hand experience of Treasury’s level of understanding of the way that clubs work. In the late 1990s, he had organised a meeting with the Treasurer, and was in the waiting room outside his office.

There was a woman also waiting for the Treasurer. She told me that she was there for the meeting; Egan apparently wanted somebody from his department to sit in. I think she said she was the head of the Treasury department, but it was certainly some high-level job.

While we were waiting, we got into a conversation about some of the difficulties of running clubs and trying to make a profit. I made the point that it’s not as easy to make a profit as some people think it is.

She looked quite surprised and said, “Why would you need to worry about that? You’re a non-profit organisation – you don’t have to worry about making a profit”.

At first I thought she was joking, but then I realised she was quite serious.

I told her, “Well, if we don’t make a profit, we make a loss, and if we keep making losses, we go out the back door. We have to make a profit!”

This was a person high up in the Treasury department, and she just did not have a clue about the way clubs work.

Rogan says that Egan had his own perception of what a club should be – small, intimate, friendly, like the old-style local club, where everyone knew everyone else. Old Fred Smith came in at the same time every day and sat in his same chair; the staff knew everyone by name, and vice versa. He claims that Egan held the view that the club industry had lost its way.

But clubs had to grow. The members demanded it. The clubs that were getting the crowds were the ones that had better facilities, better food, good entertainment. If members don’t get what they want from their club, they’ll go somewhere else. Clubs are like companies in that they are directed by their members – who are the shareholders.

The club industry’s criticism of Egan was reinforced by Treasury documents later obtained by ClubsNSW under Freedom of Information.

Documents obtained by ClubsNSW under Freedom of Information reveal that just six weeks before Michael Egan announced his billion dollar tax increases, senior Treasury officials Michael Clark-Lewis, (Director, Revenue Strategy) and Robert Carling (Executive Director, Economic and Fiscal), had signed off on a top rate of 30.59 per cent. The rate for the top-earning clubs at the time was 26.25 per cent (on a post GST basis).

When the figures were presented to the Treasurer, he would not accept them. He sent the officials away to rework the figures. The top rate in the revised option – again signed off by Clark-Lewis and Carling – was 34.59 per cent. The recommendation was again rejected.

Eventually the Treasury officials appear to have got the message.

On the third attempt, they came up with a tax rate increase ranging up to 49.09 per cent for the top clubs.

Pat Rogan claims Egan had a special place in the Carr Government:

Egan was a unique character in the ALP, one of the untouchables in the Carr government. All the other ministers had to go to the Premier to get things checked off. But this did not apply to Egan.

In fact, Rogan claims it was the other way around. Egan ran his own race, and Bob Carr had to go to him. He also believes that at one stage the Premier was willing to have another look at the tax, but Egan said no.

Rogan remembers Egan once being asked,

“What about due diligence, what about the social impacts of the tax?”

His answer: “We don’t have to do things like that.”

No independent study of the kind sought by the industry was commissioned by the government. In fact, in 2004 – in answer to criticisms that there had been no economic study of the impact of the tax increases on either clubs or the community – Michael Egan said there was no need for an independent analysis of the tax.

He told a budget estimates committee at Parliament House in September that year that the only economic analysis of the tax had been that of ‘commonsense’.

Egan repeated the statement in an interview on Sydney radio station 2GB on the day of the second Axe the Tax rally.

The assessment can be made on a commonsense basis, and I’ve made that.

Also in September 2003, ClubsNSW commissioned the Allen Consulting Group to conduct a study on levels of taxes that could be sustained by the industry. Allen Consulting had previously done work for the government, a fact that ClubsNSW felt would help give its findings credibility.

The Allen Report, released in May 2004, painted a bleak picture for the club industry. It predicted job losses of 24,000 in the first seven years of the tax, along with massive cuts to community funding and many club closures.

The report gave what it called a conservative estimate of clubs’ overall contribution to the NSW community. This was $1.8 billion annually, including all taxes paid by clubs. On top of this, clubs also provide sports and fitness facilities; venues for socialising and meeting friends; food and beverage at reasonable prices and quality, said the report. The figure does not take into account the many volunteers who work with clubs, particularly in junior sport. Clubs also provide free or subsidised services – such as the use of meeting rooms and other club facilities – to community clubs and  organisations.

In addition to cash donations of $102 million annually, the report noted that a great deal of in-kind support often accompanied those donations, making the total contribution difficult to quantify.

The report contained a scale of taxation levels that the authors saw as sustainable by the club industry. The figures were in line with the first set of figures presented to Michael Egan by Clark-Lewis and Carling before the 2003 Budget. Cowan laments the need to investigate sustainable tax rates imposed by a state government wearing blinkers.

It is short-sighted and illogical to set an objective of finding out what tax rate is sustainable. That is like saying “what is the highest tax the industry can afford to pay?”. The object should be to identify the potential of the industry in areas that would also generate government income. The next step is to see how that potential could be used in a way that would provide wins for all concerned — the government coffers, community amenities, tourism, other business sectors.

If the federal government took such a narrow approach it would increase company tax to 50% or so. But it wants to encourage investment and business growth, and make Australia so prosperous that taxes roll in from all directions. Imagine the investment that would occur in NSW if poker machine taxes were only 15%, for example. The result would be a big boost to tourism, sporting facilities, employment, sales tax, payroll tax, and support for charities. There would be wins everywhere. In the long run the government might actually gain financially by setting reasonable tax levels.

Reasonable is a long way below the ridiculous rates now in place. The same argument applies in real estate and property taxes. A government just can’t be an armed bandit and the builder of business at the same time.

Unfortunately, such changes would require the sort of long-term thinking that seemed to have no place in the greedy Carr-Egan government.

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  1. The tax increases announced in the June 2003 NSW Budget applied to what the legislation and government described as gaming machine “profits” — broadly, the amount wagered through poker machines less the prizes paid to players. In conventional business terminology, this was closer to gaming revenue or gross gaming revenue: operating expenses such as wages, premises, administration and other costs had not been deducted. This distinction was central to the clubs industry’s objection that the tax applied irrespective of whether a club itself made a profit. The increases were to be phased in progressively over eight years and were heavily weighted towards larger, higher-earning clubs. Clubs earning less than $200,000 from gaming machines remained exempt, while those earning between $200,000 and $1 million received a slight reduction in their tax rate. Approximately 515 clubs earning more than $1 million bore the increases, with the marginal rate for the highest-earning registered clubs eventually intended to reach 40 per cent.
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  2. Pat Rogan (1936-2015) was prominent Australian Labor Party politician who served as a member of the New South Wales Legislative Assembly for East Hills from 1973 to 1999. He later served as the Chairman of ClubsNSW. He was posthumously honored with the Order of Australia Medal (OAM) for his extensive service to local communities and NSW clubs.
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  3. Paola Totaro worked in a media role (press secretary, media advisor) for Bob Carr while he was the Opposition Leader (1988-1995). She had left The Daily Telegraph and had not yet joined the Sydney Morning Herald. She continued to follow the Panthers story through the Inquiry.
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  4. See 27-28 Sep 2003 Sydney Morning Herald — A league of their own. ↩︎

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Commentary and Contributions

Major Player: Donald Feltis OAM

Donald George Feltis OAM
Image: The Panthers: Men in Black

Donald George Feltis

Police Inspector, CEO Penrith Junior League, CEO PDRLFC, Director

Few people had an association with rugby league in Penrith that stretched as far across its history as Don Feltis.

As a young man, Feltis was there when volunteers began laying the foundations of the original Penrith Leagues Club in Station Street. Decades later, after serving as a player, coach, Junior League administrator, football executive and director, he became Chairman of Panthers.

That span alone makes Feltis an important figure in the Panthers story. The significance of his contribution lies less in the number of positions he occupied and more in the different eras of Penrith rugby league those positions allowed him to influence.

His most enduring and constructive contribution was probably made at the grassroots level — in the administration of the Penrith & Districts Junior Rugby League.

Later he moved into senior football administration as the football club CEO — he was in charge for the breakthrough 1991 premiership. He also had to guide the football club through the tragedy of Ben Alexander’s death and the years that followed, culminating in the mid-season departure of Phil Gould.

Feltis was elected to the Panthers Board in that controversial October 2002 election and, in 2009 took the chairmanship of the organisation. He remained in that chair until 2015 and faced some of the most difficult financial circumstances in its history.

It was a long contribution, and an important one. It was also more complicated than a simple record of positions held and honours received might suggest.

Role in the Narrative

Don Feltis appears at several quite different points in Panthers, Passion & Politics.

In the early history, he is a direct connection with the people who physically built the first licensed club. During the 1980s, he became an important part of the team recruited by Roger Cowan for the specific task of transforming Penrith’s approach to developing footballers. By 1991, he had moved into senior football administration as Penrith won its first premiership.

A decade later, Feltis appears again in very different circumstances.

In 2002 he was elected to the Football Club Board during the bitter struggle between Roger Cowan and the directors who became known as the Footy Five. The Temby Inquiry subsequently examined that election and the role played by Panthers management in attempting to influence its outcome. Feltis was among those elected.

His later career extended beyond the period covered by the original book. He became Panthers Chairman in 2009, held the position during the Group’s subsequent financial difficulties and restructuring, and was Chairman when Phil Gould returned to Penrith in 2011.

Feltis therefore connects several of the central themes running through the Panthers story: junior development, professionalisation, football success, organisational politics, governance, and financial pressure.

Background

A 2012 NSW Legislative Council tribute recorded that he began playing rugby league at age 14 and subsequently played for Penrith, St Marys and Richmond. His involvement expanded into coaching, including junior teams at Penrith, St Marys, Richmond and Emu Plains and district representative teams.

Rugby league initially ran alongside another long career.

Feltis joined the NSW Police Force in 1955 and served for more than three decades, eventually retiring at the rank of Inspector in 1986. His police postings included Penrith and other parts of western Sydney as well as country NSW. When he retired from the Police Force in 1986, rugby league became his full-time occupation.

Throughout those years in the Police Force, his involvement with Penrith rugby league continued.

One of his recollections preserved in the original manuscript reaches back to the construction of the first Penrith Leagues Club in Station Street. Feltis remembered joining other volunteers to help lay the foundations and recalled a character known as “Nobby” Hunter pre-empting a planned drawing of straws to determine who would break the ground by simply digging the first hole himself.

It is a small story, but an evocative one. Feltis’s Panthers involvement began in an era when the club was being built quite literally by its members and volunteers.

Feltis’s administrative involvement with the Penrith District Junior Rugby League eventually became one of the defining parts of his career.

The scale of that task can easily be underestimated. The Junior League was not simply an adjunct to the Panthers first-grade club or a mechanism for identifying talented young footballers. It administered rugby league across one of the largest junior districts in the game, extending from Blacktown in the east to Katoomba in the west and from the Hawkesbury in the north to Wallacia in the south.

Its responsibilities extended from the youngest children’s competitions through the various junior age divisions and into senior district football. Behind every season sat the less visible work of administering clubs, teams, registrations, competitions, rules, disputes, representative programs and the large volunteer network required to make community rugby league function.

From the 1980s he occupied a succession of senior positions within the Penrith Junior League, including president, vice-president, secretary-administrator and chief executive. Even after periods working in senior football administration, he returned to the Junior League and remained closely involved with its administration for many years. A 2014 parliamentary tribute described him as a “driving force” behind the Penrith Junior Rugby League since 1985.

It was a form of administration very different from running an NRL football operation. Its success was measured not primarily by premierships but by whether thousands of players could participate each week in properly organised competitions spread across a huge geographical area.

Feltis proved exceptionally capable at it.

Recognition & Awards
• Life Membership, Penrith & Districts Junior Rugby League Football Club (1994)
• Life Membership, Penrith Panthers (1995)
• City of Penrith, Wall of Achievement (1999)
• Australian Sports Medal (2000)
• Life Membership, New South Wales Rugby League (2006)
• Medal of the Order of Australia (2014)
• Don Feltis Cup — Penrith Junior League Sunday Division 1 Competitions. (2022)

Relevance to Events Described

Perhaps the most important part of Feltis’s contribution came during the transformation of Penrith’s football development program in the 1980s.

After years in which Penrith struggled to convert the enormous potential of its junior district into sustained first-grade success, Panthers began looking much more deliberately at how talented young players were identified, coached and retained.

One expression of that new thinking was the Five-by-Five program.

The objective was deliberately ambitious: within five years, Penrith wanted five locally developed players capable of representing Australia.

Feltis was one of the people involved in developing the strategies intended to make that possible.

Five-by-Five was not simply a prediction that Penrith’s enormous junior nursery would eventually produce outstanding players. It represented an attempt to create a system capable of turning that potential into elite footballers.

Feltis believed the exercise made Penrith considerably more professional and provided a platform for its future football operations.

The results that followed gave considerable weight to that assessment.

A generation containing players such as Greg Alexander, Mark Geyer, Brad Fittler and others emerged from the Penrith system. The club reached its first Grand Final in 1990 and won its first premiership in 1991.

Feltis had by then moved into senior football administration by then. Contemporary accounts variously describe his roles as coaching and development manager, Rugby League Manager and Chief Executive. The distinction is worth preserving: these were football administration roles rather than leadership of the much larger Panthers licensed-club group.

The NSW Parliament’s 2012 account describes Feltis as Panthers’ Rugby League Manager when the club won the 1991 Winfield Cup.

For Feltis, who had spent so much of his life working within Penrith’s junior system, that premiership represented something more than first-grade success. Many of the players had emerged through precisely the development environment he had helped create.

From administration to the Board

Feltis later returned to the Junior League, an organisation with which he maintained an exceptionally long association.

His next important appearance in the narrative of Panthers, Passion & Politics came in 2002.

By then Panthers had become engulfed in the internal struggle between senior management and the group of directors who became known as the Footy Five.

Feltis stood in the October 2002 Football Club election.

The result was significant. Feltis received 1,072 votes and was elected, followed by Keith Rhind with 1,058 and Kerry Lowe with 954. Immediately behind them were the five directors whose return Roger Cowan and other members of senior management had publicly opposed.

The election later received considerable attention from Ian Temby during his inquiry into Panthers.

The election marked a transition for Feltis. His influence had previously been exercised predominantly through football and junior league administration, it was now part of the governance of the wider Panthers organisation.

The post-Cowan Era — Difficult Years.

Feltis replaced Barry Walsh as Chairman of Panthers in 2009.

The organisation Feltis chaired was substantially different from the one he had first joined. It was also substantially different from the Junior League where his administrative skills were suited.

Panthers had become a large multi-club group, but it was also carrying substantial debt and would soon face serious financial pressures. The Board itself formally carried responsibility for oversight of the Group’s financial management, viability and performance.

The difficulties did not originate during Feltis’s chairmanship, nor can responsibility for them reasonably be assigned to one individual. Some of the warning signs, and proposals for addressing them, predated his elevation to Chairman.

In 2007 Panthers engaged hospitality consultants Australian Leisure to review the operations of the Panthers Entertainment Group. After visiting the Group’s sites, the consultants presented their findings in early 2008. An off-site workshop involving Australian Leisure, Panthers management, ING and another external adviser was then convened to develop an action plan. The resulting recommendations were presented to the Board, but consideration of them was repeatedly deferred.

Glenn Matthews, who was Group Chief Executive at the time, recalls later raising the debt-reduction strategies again with Feltis after he became Chairman. According to Matthews, Feltis told him the Board did not want to pursue them at that time because “it is an election year”.

After leaving Panthers in June 2010, Matthews says he identified a further opportunity through which the ING debt could have been discharged for substantially less than its face value. He offered to assist Panthers with the negotiations, but says the Board declined the offer and chose to handle the matter itself. Matthews later maintained that the financial crisis should never have been allowed to become as serious as it did.

It is Matthews’s account, and he attributed the decision to the Board rather than specifically to Feltis. Nevertheless, it provides an important perspective on the governance of Panthers during the early period of Feltis’s chairmanship.

What is beyond dispute is that the organisation subsequently required substantial change.

Two of the most consequential decisions made during Feltis’s chairmanship was the return of Phil Gould to Penrith in 2011 and the appointment of Warren Wilson in March 2012 as Group CEO.

Gould was given wide responsibility for the football operation and became central to a long-term restructuring of Panthers’ football program. Feltis and the Board supported that process, and Gould later publicly thanked Feltis and his directors for their continuing support of the rugby league program.

Following Warren Wilson’s appointment as Group CEO in March 2012, Panthers embarked on substantial debt reduction, divestment and restructuring. The principal measures adopted reflected strategies that participants in the 2007 management workshop recall having recommended five years earlier.

Feltis therefore occupied the chair through both sides of a difficult period: the financial pressures confronting Panthers and the beginning of the restructuring from which the organisation subsequently emerged in a much stronger position.

He resigned as Chairman in July 2015, bringing to an end an association with Panthers administration that had extended across much of his adult life.

Legacy

Feltis made important contributions to Panthers’ elite football development, particularly during the Five-by-Five period, but that should not be confused with his broader contribution to the Penrith District Junior Rugby League.

The Junior League may ultimately provide the strongest measure of his administrative legacy. For decades, Feltis helped run an organisation responsible for providing rugby league to thousands of players across an enormous part of western Sydney and the Blue Mountains. Most would never become professional footballers. That was not the point. The competition existed for the children, teenagers and adults who played for their local clubs every weekend, and for the families and volunteers who sustained those clubs.

Administering an organisation of that nature required skills quite different from those involved in running an elite football team or governing a large licensed-club group. It was an area in which Feltis demonstrated considerable ability.

His record at those senior levels of Panthers was more complicated.

Yet two decisions made during Feltis’s chairmanship — bringing Phil Gould back to Penrith and appointing Warren Wilson as Group CEO — would have consequences extending well beyond his own time in the chair and stamp his legacy on Panthers.

Those consequences belong to the post-Cowan history of Panthers and fall beyond the scope of Panthers, Passion & Politics. Their full assessment is a story for another Panthers historian.

Related Topics

Related Themes:

Governance · Growth · Financial Management · Football Club

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Editorial Note

This profile is presented as contextual background.
Additional material may be introduced as the narrative progresses.

No Time To Lose

Part 55 of 70 — Original Chapter: Chapter 15: Confidentiality — Dysfunction — Conflict

This article forms part of the serialised republication of Panthers, Passion & Politics – The Roger Cowan Years.

Start · Reader’s Guide · All Parts

Keith Rhind speaks about the personalities in the boardroom.

John Bateman was a great stickler for procedures. He had been on council, where things are often deferred over and over again. He thought that things should be tabled, discussed, and directors should go away and come back and resolve it the following meeting.

Roger would bring things to meetings, usually on paper, but sometimes supported verbally, but they were always well put together, and well prepared. There were times when he asked for a matter to be treated with some urgency and this did not go down very well with some of the directors. But sometimes it was very important, if a decision needed to be made immediately to save money or secure a business opportunity.

A classic example of this was the purchase of The Mekong Club in Cabramatta.

The Mekong Club had a bad reputation. Its founding chairman, Phuong Ngo, was eventually convicted of masterminding the assassination of local MP John Newman and sentenced to life imprisonment. The club had also been associated with a number of serious licensing breaches, and a shooting had occurred on the steps of the club. Other crime in the area had attracted intense media coverage.

One Friday, Cowan and John Wilson were travelling to a function with John Gould, then with Aristocrat poker machines, and The Mekong Club came up. 

John told us that the owner of the building had recently made the decision to sell it and close the club.  He said that after paying rent of $350,000, the club’s operating profit was currently about $500,000 per year.  The asking price for the building was $1 million.

On the face of it, it seemed like an unbelievable opportunity. But we had to act fast. We phoned from the car to see if it was still available and made an appointment to see the Mekong club manager that same afternoon. 

The Mekong’s receivers had already made approaches to about 14 clubs, and Gould said he felt that somebody was sure to grab it in the next few days. 

The next morning Cowan sent an email to the directors informing them of the opportunity and giving then some preliminary information. He said management would present a recommendation at the next board meeting, only three days away. 

That Saturday night, Cowan and a number of other managers did a tour of clubs in the area and then visited the Mekong
club. They became even more excited about the opportunity. The team worked on Sunday to have a report ready for the board meeting the following Tuesday.

Cowan could not recall whether particular responses came from Geoff James or Craig Terry, but remembers the exchange going something like this:

Cowan:

 Clubs in that area are amongst the most successful in the state, and they were all busy on Saturday evening. We visited the Mekong Club around midnight, assuming that if there were to be any problems they would be more likely later in the evening. In fact, we were impressed by the customers and by the staff. Our inquiries indicated that there have been no serious behaviour problems there for a long time.

‘f we move quickly, we can buy the premises for $1 million, and the Mekong Club will become a tenant paying $350,000 per annum. The club appears to be well managed, and profits are around $500,000 per annum. We don’t have to commit to amalgamation at this stage, but I want to forecast the likelihood that there will be a recommendation later.

James or Terry:

This is unsatisfactory. We have not been given sufficient notice to make a decision involving $1 million. It should be deferred to the next meeting.

Cowan:

If we can’t make a quick decision, it is almost certain we will miss out. A property investment showing a return of 35% a year is not going to hang around forever. The return could be 85% if we go to the amalgamation. There are other clubs looking at it as we sit here.

James or Terry:

We should have been given more notice.

Cowan (starting to show impatience):

We were not aware of the opportunity until last Friday afternoon.

James or Terry:

It is management incompetence rushing things this way.

Cowan:

You don’t seem to understand. We found the opportunity at 5 pm on Friday afternoon. Since then a team of managers has inspected the club, visited other clubs around it, talked to management and staff, and written a report for the board. It was simply not possible to give any more notice.

Terry:

Well, if we had better relations with the auditors, we would have been told about it sooner. So it’s still management incompetence.

Craig Terry apparently believed that because there had been a connection in the past between Panthers and the company that audited Mekong, Panthers should have known earlier what was happening.

James and Terry both voted against the proposal. The other members of the Footy Five did not join them, and the purchase was approved.

The purchase proceeded, and The Mekong Club subsequently amalgamated with Panthers.1

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  1. The Mekong Club operated as Mekong Panthers from 2001 until 2012. The club (and the building) was then sold to the Mounties Group as part of a broader financial restructuring of the Panthers Group aimed at reducing debt. ↩︎

← Part 54 · All Parts · Part 56 →

Commentary and Contributions

Somebody, Hose it Down!

Part 52 of 70 — Original Chapter: Chapter 15: Confidentiality — Dysfunction — Conflict

This article forms part of the serialised republication of Panthers, Passion & Politics – The Roger Cowan Years.

Start · Reader’s Guide · All Parts

For two years Cowan had been agonising about how to improve the decision-making process. His recommendation to the Board in 2000 to employ an external consultant was intended to improve those relationships. Instead, the workshop would expose an issue that took the conflict to a new level.

In 1996, Cowan had negotiated a new contract with the Board Executive, which would take him to his planned retirement date of 2006. The same confidentiality over his remuneration arrangements that he had insisted on since 1965 was written into the contract. In 2000, that confidentiality would become another catalyst for conflict.

We help you clearly define your board’s role and distinguish board from executive accountabilities.

Cowan contacted the company, and board and management agreed to hold an evening workshop, in May 2000, facilitated by John Kilmister. Cowan held high hopes that an independent consultant might help board and management work together more productively and harmoniously.

Kilmister made a number of recommendations that were designed to improve board/management relationships.

In the course of the workshop, somebody asked the consultant if he thought it was appropriate for senior management remuneration packages to be disclosed only to the executive of the board and the club’s auditors. The consultant’s opinion was that it would be preferable for the full board to have that information, but he added that there was nothing illegal about that sort of confidentiality.

Despite Bateman’s later evidence that he had been curious about Cowan’s remuneration since joining the Board, the issue had not previously been raised with Cowan in the boardroom.

In his first day of evidence at the inquiry, John Bateman told Ian Temby that he had been curious about the remuneration of the CEO from the time he first became a director, in December 1995. He cited his experience as a Penrith councillor as the reason for his interest. What is notable is that, despite that longstanding interest, he had apparently not previously raised the issue in the Panthers boardroom.

At the next board meeting1, John Bateman asked Roger Cowan a seemingly simple question. The answer was straightforward. Its significance would not become fully apparent until some four years later.The question?

Does any manager employed by Panthers hold an interest in any company doing business with Panthers?

Although John Bateman maintains that he never asked such a question, Cowan says he has a vivid recollection. It seemed rather confrontational and was quite unexpected, which is why it stands out in his memory. He recalls the question very well because of his reaction to it.

My immediate thought was that he was asking a question when he knew the answer. I sensed that he was trying to lay a silly trap, thinking that I would try to fudge an answer. To me, this was crazy because there was no secret about Phyro Holdings. Everybody in the office knew about it, all the managers knew about it, and then there were all the external companies where we booked our advertising, etc – all through Phyro. I had no reason to think anyone would not know about it.2

I didn’t know that in the week leading up to the meeting, someone in Bateman’s office had carried out ASIC searches on Phyro Holdings. But I still believed he was up to something, and, given my immediate suspicions, can anybody imagine that I would have failed to answer the question?

I replied that the only one that I was aware of was Phyro Holdings.

The discussion became more and more heated as some directors demanded that the confidentiality clause in the contract be ignored in favour of full disclosure to the Board. But confidentiality was a condition of his contract, Cowan told them, and that same confidentiality covered all senior managers. It was quite legal, he told the meeting, and everything was subject to audit at any time by the board executive and the club auditors.

He also told them that his experiences over the previous two years made it clear that once the full board learned the details of his contract, Ron Mulock would have them by the next morning. And the whole of Penrith would be reading it by the end of the week in the Western Weekender.  From Cowan’s perspective, his experiences over the previous two years demonstrated that confidentiality could no longer be relied upon once information reached the full Board.

The friction in the meeting increased. Some directors were insisting that the confidentiality provisions be waived, and Cowan was telling them an agreement was binding and they had no right to change it.  After a final outburst, Cowan walked out, declaring he would not work for such dishonorable people.

In hindsight, Cowan says the words he used at the time were only slightly less stupid than his decision to walk out:

The day this board finds out the details of my remuneration I will leave the club

But in that moment, he says, he had decided enough was enough. How could he have respect for a Board dominated by directors demanding that a long standing contract be broken? He told Ian Temby that in doing what he did, he knew he was resigning.

When I nearly got back home, I thought this is a stupid thing I am doing, I’ve let a lot of people down, I am acting selfishly.  I drove back and went into the room, and nobody said anything.  When I walked back in, I fully expected them to say, “No way, you resigned.”3

Terrence Lynch is a barrister who has acted for Panthers on several occasions4. He says that Cowan’s rigid stance on the whole confidentiality issue was out of character.

It always surprised me that Roger wasn’t prepared to open up his salary and remuneration arrangements to the full board, particularly when it became such a contentious issue.

I was also surprised that he let it continue. Given my understanding of how he had run the place, I am amazed that he allowed it to become an issue. Why didn’t he just step aside and shut it down? I went to many meetings with various groups at the club, and my impression was that it was a very open and relaxed place, and there was no factionalism or camps. I never ever sensed any party lines there at any time.

This was the environment he’d created, so it’s even more surprising that he dug in. It is the one time that I have ever seen him let ego get in the way, though maybe ego’s not the right word.  But he was definitely acting more undisciplined than you would ever expect. It was a concentration on self rather than seeing the big picture – which he had always done for nearly forty years – and what he is known for.

Viewed dispassionately, the dispute was not simply about whether Cowan’s remuneration was excessive. Cowan maintained that his package was commensurate with the responsibilities of running a business approaching $300 million in annual turnover.

The argument had become one about disclosure, confidentiality and trust.

So, why didn’t somebody ever move to hose it down?

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  1. This refers to the next Board meeting after the May 2000 session with John Kilmister.
    ↩︎
  2. Temby’s later findings drew a distinction between knowledge that Phyro Holdings existed and was the Cowan family company, and knowledge of the extent of its financial dealings with Panthers. Evidence before the Inquiry indicated that some directors knew of Phyro but said they did not know the extent or nature of the transactions passing through it.
    ↩︎
  3. Temby later summarised the outcome starkly: “In the result nothing was achieved.” The existing arrangement remained: Cowan’s remuneration was known to him and the Board Executive, as was Phyro’s involvement.
    ↩︎
  4. Lynch, a prominent Sydney barrister, was junior counsel representating Panthers during the Temby Inquiry. It should be noted that in that role he was not representing Cowan, he was representing the Panthers Board and ex-members of the Board including the group that had been labelled “The Footy Five”. ↩︎

← Part 51 · All Parts · Part 53→

Commentary and Contributions

Major Player: Glenn Matthews

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.

Related Topics

Related Themes:

Financial Management · Governance · Growth · Culture

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Editorial Note

This profile is presented as contextual background.
Additional material may be introduced as the narrative progresses.

The Not-Enough-Money-For-Football Myth

Part 39 of 70 — Original Chapter: Chapter 12: The Anti-Football Myth

This article forms part of the serialised republication of Panthers, Passion & Politics – The Roger Cowan Years.

Start · Reader’s Guide · All Parts

The perception that Roger Cowan was against rugby league was built up through the seventies, as he battled to bring the registered club and the football club under one administration.

Barry Hubbard was on the executive of the registered club through those years.

There was the football committee and our board, and there was very little liaison between them. The football committee called the board the “kings in their castles”. Roger was always up against it because everybody knew he was determined to get hold of football. He once told the board executive, “We should cut the head off rugby league”.

It was a remark that would come back to haunt Cowan. He did not remember the particular occasion, but acknowledged that, when particularly frustrated by the divided administration, it was quite possible he had said something like it.

I used to say that if we were not careful, rugby league would send us broke.

They [the football committee] would give us a budget, and when it came time to pay the bills at the end of the year, the amount would be double. To them there was no limit – they would just spend, didn’t care where it was coming from.

The other thing that I always said – and I’ve never backed away from it – is that the number one priority is to make the registered club successful. Rugby league has to run second. If you reverse the priorities you end up with nothing, not even a team. Western Suburbs came close, and Norths failed to take their place in the fourteen team competition. The Newtown club – with all its traditions – died completely.

Expressed that way, Cowan’s priorities could easily be interpreted as placing rugby league at the margins. His argument was almost the reverse. If the registered club was to provide continuing support for football, its own financial strength had to come first. In his view, weakening the source of the funding would ultimately weaken rugby league itself.

The vote taken in July 1999 was not a vote on whether to merge, but on whether to sign and send the letter to the NRL.

In 1983, Newtown1, one of the original rugby league clubs, with a debt of $1 million and no money to pay its players, was forced to fold. In a similar financial position, Western Suburbs — also one of the rugby league’s foundation clubs — was only saved by legal action. It struggled for many years before amalgamating with Balmain in the late 90s.

Sydney Morning Herald 27 Sep 1983 — click image to enlarge.

Cowan’s own memories of the days when the Penrith club was unable to pay its players had steeled his convictions.

The dispute always made me think of the fable of the goose that laid the eggs of gold. If the goose is treated badly there are no more eggs.

Yet the belief that not enough money was put into rugby league is a big part of the anti-rugby league tag. Merv Cartwright took what he needed for football, because he believed he could, but he was not the only person who saw things that way. In their evidence at the Inquiry, both Greg Evans and Dennis Coffey said that Cowan was not as supportive of football as they would have liked. Both spoke of their passion for football and their love of the team.

There was, however, an important distinction between Cowan’s influence as chief executive and the authority of the Board. Cowan could advise and recommend, but decisions about the level of financial support provided to football ultimately rested with the directors.

That raises a question not explored in evidence presented to the Inquiry. If directors believed football required greater financial support, they had the capacity to propose it and, if they commanded a majority on the Board, to approve it.

When Ian Temby suggested to Coffey that he ‘reckoned the leagues club was mostly there to support the football club and the football team’, Coffey agreed. He said that it would not surprise him if management was prepared to collude in a reverse takeover by amalgamating with clubs that would take control of rugby league out of Penrith’s hands.

Roy Masters does not agree that Roger Cowan could have secured more premierships by providing more money.

Rugby league premierships are extremely hard to win. Look at Cronulla.2 They came in the same year as Penrith, and they’re still waiting for their first one.

Putting more money in does not necessarily help. Penrith put more money in in 98, when Royce Simmons was coach, and didn’t win. They didn’t in 2003, with John Lang, and that year they won. There are many elements to winning a premiership.

Being the type of person that he [Cowan] is, he probably took the view that if you build a tremendously successful licensed club, you are always going to have a cash cow that can support a football club.

Dennis Fitzgerald, who was the long-time CEO of the Parramatta Eels, has faced the same problems with funding;

If you put all the money into the game – and so many clubs have done that – their leagues clubs either have to close or they run into all sorts of financial problems. Newtown is a classic example.

Roger is a rugby league person, but at the end of the day, he is a visionary, a business person who realised that unless you’ve got something funding rugby league, you won’t have anything. He had a massive junior league to fund, as well as an NRL team – as we all have. You need a good profitable facility to generate the dollars to keep everything else running.

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  1. Only tw years earlier, Newtown had played Parramatta in the 1981 Grand Final, leading 7-6 at half-time before losing 20-11. Few watching that game could have imagined that Newtown had only two season leftc in the first-grade competition. ↩︎
  2. Masters was speaking well before Cronulla won its first premiership in 2016. ↩︎

← Part 38 · All Parts · Part 40 →

Commentary and Contributions

Following the Merger Debate

Contemporary newspaper coverage from the Western Weekender, July- September 1998

Editors Note: The articles selected for this Beyond the Book entry are those that best illustrate the major stages in the public debate as it evolved between July and September 1998.

The following newspaper articles are presented in chronological order. Together they allow readers to follow one of the most significant episodes in Panthers’ history as it unfolded during 1998. Rather than viewing events with the benefit of hindsight, they invite readers to experience the uncertainty, competing arguments and rapidly changing public debate that surrounded the proposed merger discussions.

These articles illustrate how the debate gradually expanded — from Board deliberations, to community campaigns, to local government, to the wider media — before eventually reaching the public information meeting that proved to be a turning point in the story

24 July 1998 — Stand Alone

Commentary

This was one of the first major reports after discussion of a possible merger became widely known. The article captures the immediate emotional response within the Penrith community and reflects the strength of the emerging “Stand Alone” campaign.

At the same time, it provides readers with Roger Cowan’s explanation of why management believed every contingency needed to be examined if Panthers was to maximise its chances of remaining in the National Rugby League.

Reading the article today, one feature stands out. The emotional and practical arguments were already beginning to diverge. While much of the public discussion centred on loyalty and identity, management continued to focus on risk, planning and the long-term survival of the club.

Despite Cowan and his management team being as passionate and loyal — as emotionally invested — as the most fervent supporter, these qualities were already being overshadowed by the emerging public narrative.

31 July 1998 — War of Words

Commentary

Within a week the debate had expanded well beyond Penrith itself. Sydney’s leading radio commentator, Ray Hadley, had broadcast damaging misinformation about Panthers prompting the Club to respond with an open letter published in the Sydney Morning Herald and the Western Weekender.

This exchange illustrates how quickly the discussion moved from private Board deliberations to public debate. Importantly, it also demonstrates that Roger Cowan’s explanation of the club’s position was being expressed publicly at the time. The account presented throughout Parts 29–35 is therefore not a reconstruction created years later, but reflects the position being articulated as events unfolded.

Readers may wish to compare this article with the discussion in Part 33 of The Series — A Good Story Trumps Truth — where the relationship between public perception and documented fact is explored in greater detail.

7 August 1998 — Merger Decision Deferred

Commentary

This article is significant because it records Panthers’ management describing its decision-making process while events were still unfolding. It’s headline — Damned if you do … — echoes the difficulties being encountered by those responsible for the Club. Roger Cowan repeatedly emphasises that the Board was analysing the risks, considering several possible scenarios and attempting to avoid making decisions based purely on emotion.

It is also a reminder that the future remained highly uncertain. Today it is easy to assume that Panthers’ eventual survival was inevitable. In August 1998 it was anything but certain — indeed, the uncertainty persisted until North Sydney and Manly announced their merger more than a year after the events chronicled here.

21 August 1998 — Council Enters the Debate

Commentary

By late August the merger debate had expanded well beyond Panthers’ Boardroom. Penrith City Council formally resolved to urge the club to remain a stand-alone participant in the National Rugby League, arguing that the Panthers name had become an important part of the city’s identity and economic development.

The article is of particular significance because it captures the complex position occupied by Deputy Mayor John Bateman, who was both a Panthers director and a councillor. Speaking in his capacity as a councillor, Bateman publicly praised the professionalism of Panthers’ management, confirmed that no merger agreement had been reached and acknowledged that the economic case being examined by management was a strong one. At the same time, he explained why he personally believed the socio-economic arguments for retaining an independent Penrith team were ultimately more compelling.

With hindsight, the article demonstrates that the debate had become far more sophisticated than a simple contest between “for” and “against”. Competing economic, governance and community considerations were all being weighed, even by people who ultimately reached different conclusions.

The relationship between the football team and the identity of Penrith had much earlier found an unusual expression when PENRITH CITY appeared across the Panthers jersey in 1988.

11 September 1998 — The Passion … The Practical

Commentary

The public information meeting marked an important turning point in the merger debate. As described in Part 34, Roger Cowan later recalled the meeting as having become an “ambush”, while many supporters regarded it as the defining moment in the campaign to remain a stand-alone club.

The reporting that followed is interesting for another reason. Rather than simply recording the arguments presented, the article framed the debate as one of “Passion” versus “Practical”. Ron Mulock’s position appeared under the heading The Passion, while Roger Cowan’s appeared under …the Practical.

Whether intentional or not, this framing invites an interesting question. Was the debate really between passion and practicality, or were both men expressing different forms of commitment to the same objective — the long-term future of Panthers?

Readers who have followed Parts 29–35 may notice a striking irony. Throughout those chapters, management’s practical approach — risk analysis, contingency planning and exploring every available option — was itself driven by a determination to preserve Panthers’ place in the National Rugby League. The practical and the passionate were not necessarily opposing ideas; they were different philosophies for pursuing what each believed was in the club’s best interests.

It is obvious that both sides of this debate were driven by people holding strong loyalty and devotion to the Penrith Panthers.

Looking Back

Reading these articles nearly three decades later, several observations stand out.

The uncertainty of the time is unmistakable. Decisions that now seem obvious were anything but obvious in 1998. Much of the debate took place before supporters had access to the information available today.

The articles also reveal how rapidly public narratives developed. As discussions moved from the Boardroom into newspapers, radio and public meetings, the story acquired a momentum of its own. Perceptions often became as influential as documented facts.

Perhaps most interesting of all is the consistency of Roger Cowan’s public position. Whether speaking through interviews, open letters or Board statements, the central themes remained remarkably consistent: the risks were real, the future uncertain, and management had a responsibility to examine every realistic option before events overtook the club.

These articles go beyond being simple contemporary newspaper clippings. They are historical documents that allow readers to experience events as they unfolded, before hindsight shaped later interpretations.

The Panthers Merger Debate Newspaper Collection (PDF Download)

Readers wishing to explore these articles in full can download the accompanying PDF containing the complete Western Weekender collection reproduced in this Beyond the Book entry.

Resources

The Panthers Merger Debate Newspaper Collection (PDF)

Related Topics

Related Themes

Conflict · Financial Management · Media

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Survival Becomes a Numbers Game — The NRL Criteria

Editors Note: The tables reproduced in this article are based on Panthers’ internal working papers prepared during 1998 and 1999. They were management documents used to estimate the club’s position under the NRL Selection Criteria and were never intended for publication. While some financial measures necessarily relied on informed estimates, they provide a rare insight into the information available to Panthers’ leadership as critical decisions were being made.

The settlement that ended the Super League war did not guarantee the survival of every club. In fact, it guaranteed the demise of some teams.

Twenty-two teams competed in the 1997 Season — the split competitions season — twelve played in the Australian Rugby League and ten in Super League.

Before the new National Rugby League competition began in 1998, the South Queensland Crushers and the Hunter Mariners were wound up, leaving twenty clubs to compete in the frist season of a unified competition.

The unity was conditional.

The NRL would operate with twenty clubs during 1998 and 1999, but from the 2000 season the competition would be reduced to just fourteen. The peace agreement had ended one conflict while immediately beginning another — a contest for survival.

To determine which clubs would be admitted to the new fourteen-team competition, the NRL introduced a formal assessment process known simply as the Criteria. (Download PDF: Admission Criteria National Rugby League Competition )

The NRL described the Criteria as a “fair and reasonable” method of selecting the clubs that would comprise the future competition. They consisted of three separate components.

The Basic Criteria required clubs to demonstrate that they met, or had plans to meet, minimum standards relating to playing facilities, administration, solvency and development.

The Qualifying Criteria examined financial capacity, including minimum revenue requirements of $8 million together with five-year business plans demonstrating the ability to sustain those revenues.

It was the third component — the Selection Criteria — that attracted the greatest attention from Panthers and most other clubs.

Selection points were awarded across six categories:

  • Home crowd numbers
  • Away crowd numbers
  • Competition’s points
  • Home game receipts
  • Sponsorship and other income
  • Profitability

Not every club was required to compete under these Selection Criteria.

Brisbane, Newcastle and Auckland were given exemption, leaving seventeen clubs competing for the remaining eleven places.

There were two further provisos that influenced the process.

Firstly, any club created through the merger of two or more existing clubs would also receive automatic admission to the fourteen-team competition. The deadline for merger submissions was 31 July 1999 — a date that becomes critically important later in this story.

Secondly, there was to be a minimum of six Sydney-based clubs. Of the seventeen clubs still subject to the Selection Criteria, twelve were Sydney clubs. While there was no predetermined list of clubs to disappear, it was obvious that the greatest competition for survival would occur within Sydney.

After studying the Selection Criteria, Panthers pursued two parallel strategies.

The first was to prepare submissions challenging aspects of the Criteria that the club believed were flawed or unfair.

The second was to construct an internal model to estimate where Panthers ranked against the other clubs.

The Modelling

Of the six measured categories, three could be obtained directly from publicly available information – home crowds, away crowds and competition points. A fourth category, home gate receipts, could be estimated with reasonable confidence because it was closely related to attendance figures. The remaining two categories – sponsorship and other income, and profitability – required informed estimates based on the information available.

Points were then allocated according to each club’s ranking in every category, with bonus points applying in some areas.

Although the NRL never published progressive rankings, Panthers developed its own working model using the published Selection Criteria and the best information available at the time.

The following table is reproduced from a report for Panthers management explaining the modelling and its results — it shows the estimated rankings at the end of Season 1998. (Download PDF: Working Paper on NRL Selection Criteria – this is the Panthers working paper produced at the end of Season 1998)

Panthers internal estimate of club criteria rankings at the end of Season 1998

The purpose of the modelling was not to predict the future with certainty. It was more to provide information that might guide decision-making and strategy development leading into the final declaration of the 2000 NRL line-up … the merger deadline of 31 July, 1998 was another critical point in the calendar for which this information could prove useful.

Where did Panthers appear to rank? What categories could Panthers take action to improve? Could those areas realistically be improved?

If no potential improvement could be seen or planned, what strategic options needed to be examined before the 31 July 1999 merger deadline expired?

Despite relying on estimated figures in three categories, the analysis painted a concerning picture.

Panthers appeared to be ranked fifteenth — just below the 14-team cut-off. Significantly significantly the team hold fourteenth position, Balmain, was estimated to be around thirty points ahead. Even allowing for some estimation error, the modelling suggested that Penrith faced the genuine threat of being axed from the top rugby league competition.

The calculations did not stop there.

By the beginning of the 1999 season, the Gold Coast Chargers and Adelaide Rams had left the competition, while St George and Illawarra had merged to form the St George Illawarra Dragons.

Those changes did little to improve Penrith’s position.

Both the folded clubs had been ranked below Panthers, while the St George–Illawarra merger simply created another club guaranteed admission under the merger provisions.

So, the 1999 season began with seventeen clubs competing, four of them already guaranteed a place in the 2000 competition. That left thirteen clubs — nine from Sydney — competing for the remaining ten places.

The following table shows the standings as at Monday 26 July 1999 — after Round 21 of Season 1999 — five days before the merger submissions deadline.

Panthers internal estimate of club rankings after Round 21, 1999 Season (26th July 1999)

At this late stage of the process the modelling still had Penrith in fifteenth position.

However, the gap to fourteenth (Balmain) had been narrowed — from 30 points to 4.6 points. And Norths fortunes had them dropping from eleventh position to thirteenth, a reachable (though difficult) 12.75 points ahead of Penrith.

There were still five rounds of the season to be completed.

BUT …

The day after this table was distributed to Panthers management, Balmain and Western Suburbs announced a joint venture — the Wests Tigers were born and another place was taken.

To be sure, throughout 1998 and 1999 there was speculation about potential mergers, so this wasn’t a surprise. So, Penrith now had to close a gap of 12.75 points on North Sydney — given their slide and Penrith’s gathering momentum, there was hope.

However, no internal analysis could predict the final outcome. Some financial measures remained estimates and therefore likely had errors, more mergers could change the landscape and the NRL still retained discretion in applying the Criteria.

Nevertheless, the modelling consistently pointed to the same conclusion.

The Penrith Panthers were vulnerable.

The significance of the Panthers modelling and their companion working documents is not with their accuracy.

Their importance is that they demonstrate commitment by Panthers management to ensuring information was available to maintain their evidence-based approach to decision-making. It was not reacting to to rumours or speculation despite the fact that some influential people were.

Panthers had constructed a detailed assessment of its position using the published Selection Criteria and the best information available at the time. No other club had taken this approach.

That assessment suggested Panthers was outside the projected fourteen-team competition.

Whether the analysis ultimately proved right or wrong is almost secondary.

It explains why management believed the threat was real, why alternative strategies had to be considered before the merger deadline expired, and why simply waiting for the NRL’s final decision was never regarded as a responsible option.

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Counting Crowds to Chase Survival

When the Super League war finally ended, it was conditional.

Twenty clubs would compete in the National Rugby League during 1998 and 1999 before the competition contracted to just fourteen teams for the 2000 season. Which clubs survived would not be determined by tradition, supporter loyalty or even on-field performance.

There was an attempt to determine the clubs that would compete from Season 2000 onwards by more objective means. So, a detailed set of selection criteria was created to decide who’d be eliminated.

Although Panthers’ management was pleased the NRL had tried to apply some science to the process, there was great concern that it was compromised right from the start.

The criteria relied upon historical information that could not easily be audited. For example, attendance figures formed an important part of the assessment, yet clubs reported their own crowds and there appeared to be no independent verification.

In fact, Panthers was encouraged, by the game’s governing body during Season 1997, to “boost” the attendances. They resisted but believed the practice was widespread.

Panthers repeatedly challenged aspects of the criteria, arguing that several measures lacked transparency. Panthers raised its concerns privately and directly with the NRL rather than through the media.

The attitude within Panthers was to formally advise the authorities of the Club’s concerns about serious flaws in the criteria, alerting them that they could easily be challenged. The internal emphasis on evidence, analysis and measurement was applied to this problem — and although there was no solution in sight, the management and Board at least had a solid understanding of the challenges.

That philosophy gave birth to one of the more unusual projects undertaken during the fight for survival.

A War of Words

The immediate catalyst arrived in early May 1998.

Sydney City (The Roosters) chairman Nick Politis publicly criticised Penrith — labelling the Panthers, and Canterbury, “basket cases”. The restrained approach consciously adopted by Cowan had been interpreted as weakness.

Not wanting to exchange insults in the public arena, a decision was made to present evidence that would serve as a “return shot” at the Roosters while alerting Panthers fans that the Club’s public silence did not mean they were sitting on their hands.

Importantly, it also would send a message to the NRL, the other clubs and the general public about the fragility of the measures that were being used to cull clubs.

This was an opportunity for Cowan and the Panthers to go public with evidence demonstrating one of the significant flaws in the criteria.

Cameras Instead of Opinions

The Roosters were scheduled to play the Auckland Warriors at the Sydney Football Stadium on Saturday 2 May. Panthers management team knew the crowd would be relatively small and also had a strong suspicion that their official crowd would be inflated.

So, photographer Neil Billington was dispatched to the Sydney Football Stadium with the task of photographing every section of the stadium. Neil’s media accreditation allowed him to take the photos from the field area and his instruction was to take the photos 5 minutes into the second half when attendees would have returned to their seats.

The resulting enlarged photographs allowed individual seating bays to be examined and the spectators counted manually. The counting was done by members of the Panthers management and marketing teams — sometimes with magnifying glasses deployed. Each count was verified against the others.

The conclusion was clear, the official attendance announced by the Roosters significantly overstated the number of spectators actually present.

The photographs became the basis of a dramatic Daily Telegraph back-page story under the headline “Where Are They?”, accompanied by enlarged photographs of the stadium and detailed comparisons between the official crowd and Panthers’ own calculations.

Daily Telegraph — click image to read article. The article continues here.

What began as an off-the-cuff comment aimed at belittling the Penrith Panthers, became a public debate about the integrity of the selection criteria.

The Project Expands

Encouraged by the clarity of the photographic evidence, Panthers broadened the exercise. Panthers Media & Communications Manager, Rob Weaver, directed Neil Billington’s work.

Contrary to later recollections that suggested almost every match was photographed, the research concentrated on two or three Sydney-based games each round, particularly those involving clubs competing with Penrith for the final places under the criteria. The process was painstaking. Every photograph had to be examined manually and individual spectators counted section by section.

The objective was not to embarrass rival clubs.

It was to determine whether attendance figures—the very figures helping decide which clubs lived and which disappeared—were reliable. In fact Cowan also required at least one Panthers home game to be given the same attention.

According to Roger Cowan, the accumulated material may eventually have supported a legal challenge if Panthers found themselves excluded from the competition. He never regarded it as a particularly attractive strategy, but believed the circumstances justified examining every possible option.

Roger and Nick Declare Peace

Within days, the public dispute subsided.

Correspondence between Roger Cowan and Nick Politis helped calm tensions, and both clubs publicly agreed to move on. There was nothing personal about the exchange — both men were doing what they saw as necessary for their clubs.

The underlying issue, however, remained unresolved.

Whether official attendance figures accurately reflected the crowds attending NRL matches was never independently tested.

Daily Telegraph 8 May 1998 — click image to read.

Looking Back

With the benefit of hindsight, the crowd-counting exercise could appear excessive.

Yet it reflected the reality confronting Panthers during 1998.

Management believed the club was sitting outside the fourteen places destined for Season 2000. Every point on the criteria mattered. Every category was scrutinised. While substantial resources were invested in increasing Panthers’ own crowds and commercial performance, management also continued examining the assumptions upon which the criteria rested. At the same time the club quietly but substantially increased the budget for marketing initiatives designed to improve attendances and strengthen its own position.

Ironically, the photographs were never called upon.

When South Sydney later challenged its exclusion from the competition, Panthers’ collection of crowd photographs was not requested. Whether they would ever have carried legal weight remains unknown.

Perhaps that is not their greatest significance.

The Panthers / Roosters “Where Are They” conflict may have been a dispute over attendance figures, but it was evidence of something more important — a management team, led by Roger Cowan, determined and prepared to investigate every possible avenue in the fight to preserve first-grade rugby league in Penrith.

Postscript

Nick Politis added a postscript to the letter he sent Roger Cowan. It said:

I hope all this controversy between our clubs results in a great crowd for you when the Roosters visit the Panthers in Round 18 (July 10-12)!

The attendance at Penrith Stadium for the Rooster’s game was 11,156—around 20 per cent higher than the club’s average home crowd for the 1998 season. Whether the controversy contributed is impossible to know, but the irony was sweet.

Final Note: The fate of the hundreds upon hundreds of photograph prints from those 1998 games? It is said they were burned.

Related Topics

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Conflict · Financial Management

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