Tag: Governance

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

Complaints That Would Not Go Away

Part 66 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.

Start · Reader’s Guide · All Parts

The longest walks I ever made in my life were down Elizabeth Street1, and turning the corner to face all those journalists and cameras outside the court.

Panthers chairman Barry Walsh made that walk a number of times in 2004.

In May 2004, Cowan and Panthers were called to appear before the first inquiry conducted under the NSW government’s Section 41X legislation.2 This new section of the NSW Registered Clubs Act had appeared at the end of the previous year, around the time of major demonstrations against new taxes on clubs.

In late September 2003, the NSW government was in a spot over tax increases on clubs, and a major protest was imminent. A story broke in The Sydney Morning Herald about the dealings of Roger Cowan, his family company, Phyro Holdings, and Panthers. And the state Labor Government was breaking legislative ground by preparing to introduce legislation that would give it Royal Commission-style powers to investigate allegations concerning clubs.

In the aftermath of the second election — the October 2002, election — some members of the Five made allegations to the Department of Gaming and Racing (DGR).3

Darryl Freeman, from the DGR’s legal section, was contacted several times to request copies of the complaints, but he maintains that the DGR protects its informants, and that he would never approve a Freedom of Information request for the letter. He did, however, confirm the existence of a long letter with at least two signatures and possibly more. Later, a formal application under Freedom of Information was also rejected.

So, neither Cowan nor Panthers’ legal representatives have ever seen the allegations in those letters. Subsequent events indicate that they concerned the election itself, Roger Cowan and his family company, and accusations that Cowan misled both the Board and members of amalgamating clubs.

Allegations of this type would subsequently form part of the government’s action against Cowan and Panthers.

Some in the group [the Five] admitted contacting The Sydney Morning Herald at the same time.

Ron Mulock had strongly supported the Five. In 1998, without any discussion or negotiation, he embarked on a campaign to discredit Cowan.

When the dust settled after the election in October 2002, things seemed to go back to normal at Panthers. The new board — nine from Penrith and five from the amalgamated clubs — came together well. Cowan and the management team breathed a sigh of relief, happy to return their full focus to running the business.

Throughout the election campaign, and indeed even earlier, the DGR had a presence at the Club. The aborted board election of the previous March had gained DGR attention, and if — as Geoff James claimed — a letter had been sent by the Five in August, there was even more reason for them to be there.

Dennis Coffey had complained to journalist Roy Masters at a Melbourne Cup day function in November 2002 that a letter had also been sent to The Sydney Morning Herald but there had been no response. Coffey said the group had sent complaints to the DGR, and to the Herald. At the time Masters shrugged it off. He later told Cowan that nobody at the newspaper saw any reason to follow it up — or to mention it to anyone at Panthers. It was seen as bravado – or sour grapes — from a group of embittered men. It would be another year before the newspaper would see any news value in the allegations.

Quite soon after the second election, the DGR activity increased. Nobody was particularly concerned. The new board and management believed they had nothing to hide, and nothing to answer.

From around Christmas 2002 until well into 2003, the DGR officers spent a great deal of time at the club. According to Glenn Matthews, then financial controller, they were extremely thorough, and appeared to be satisfied with their findings in each of the areas of complaint. No action was taken against Panthers throughout this period.

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  1. Barry was headed toward the St James Centre at 111 Elizabeth St, Sydney. On the third floor of that building was the hearing room used by the Police Integrity Commission (now called Law Enforcement Conduct Commission). This room was used for the Inquiry conducted by Ian Temby for the Department of Gaming and Racing.
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  2. Section 41X of the Registered Clubs Act gave the Director of Liquor and Gaming power to appoint an investigator to inquire into specified matters concerning a registered club, with extensive powers to obtain evidence and require the production of documents. Panthers was the first club investigated under the provision. A second Section 41X inquiry, concerning Paddington Bowling Club, was conducted in 2007. The provision was repealed in 2011.
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  3. The Department of Gaming and Racing (DGR) was then the NSW government agency responsible for the regulation of registered clubs, liquor and gaming.
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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.

Hoist By Their Own Petard: The Footy Five Defeated

Part 65 of 70 — Original Chapter: Chapter 18: The Footy Five Make Their Play

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

Start · Reader’s Guide · All Parts

Leading up to the election, Cowan was on holiday in Malaysia, but he was in contact with senior management and the non-aligned board members. Matthews was acting CEO. When the Western Weekender story hit, there were some urgent changes in strategy at the Club.

The Board conflict had also taken a toll on senior management. John Wilson was among those whose morale had suffered, while Glenn Matthews had begun applying for positions elsewhere. Matthews, who had risen through the Panthers organisation and had been identified as Cowan’s eventual successor, could see little future in remaining if the conflict continued.

Cowan had become increasingly concerned for the future of the Club if the Five retained their Board majority. And once the Weekender published the ‘Board Wars’ story, Barry Walsh was ready to pull out all stops. Cowan and Walsh discovered they had different ideas on strategy during a phone conversation from Malaysia. Cowan recalls,

My feeling was that we only had to remove two of the Five to remove their domination. Barry had already released a ticket with Bateman and Coffey, and I thought we could soften our attitude towards Geoff James. He had been a director a long time, and he was going through some personal crises. I even felt some sympathy for him at the time but I soon learned how easy it is to misplace such a valuable emotion.

I said to Barry,

“Maybe you are biting off too much here? It would be a lot easier to have two voted off than five”.

But they decided to go for the lot. It proved to be a wise move.

Until the Board Wars article, the extent of the Board conflict had not been widely known among Club staff. Now it seemed there was an attack on the management and on some directors who were quite popular with the staff. And now, for the first time, staff had an opportunity to vote

Ian Temby investigated the proposition that staff were pressured into voting against the Five. Glenn Matthews told the Inquiry that after the Weekender came out on Wednesday he had been inundated with requests from staff asking him what was going on.

I even had union delegates asking what’s happening. I could see how important it was for the majority of the 800 or 900 employees of that site.

Matthews headed up a regular team leaders’ meeting on the Friday after the Board Wars story hit.

I had a couple of outcomes I wanted to achieve at that meeting. Roger was away and the place was chaotic. First of all, I wanted to answer any questions about the article itself. I think I actually mentioned a no-confidence motion in the CEO. I was also being asked whether staff could vote.

Matthews says he held up the article, and that he told those at the meeting,

If you want to get rid of management, here is your chance.

He says he answered questions about the content of the article and explained that staff could vote. He told them that if they felt strongly about what was happening, they might exercise their right to vote.

He admits that he told the managers at the meeting that those calling themselves the Footy Five were in direct conflict with Cowan but says that was merely confirmation of what had been printed in the Weekender. He categorically denies that he told those at the meeting either to vote, or how to vote, although that particular allegation was put to him many times.

Evans and Bateman maintained that they had information, even affidavits, from staff members who said they had been pressured or intimidated. No affidavits were produced at the Inquiry, although one staff member appeared saying she felt intimidated. The DGR had been given a contact list of 40 Panthers employees. Terrence Lynch questioned opposing counsel as to why only three of those were called to give evidence.

What about the rest? If you’re not prepared to tell us what they said, then the inference is that they had nothing bad to say.

Matthews says there were two how-to-vote cards at the meeting – the one that had appeared in the Weekender, and the one that Temby took to calling the ‘management ticket’. Matthew says,

Members obviously made their own decisions about voting. They must have consciously decided how they voted. There were not following asterisks this time. Some people have said the fact that Greg was running, and had spoken out convinced them to go out and vote. But his ticket was not followed fully, or Bateman and Coffey would have got up. Also, staff voting the ‘management ticket’ could not have tipped the balance if the majority of other members had gone for Greg’s ticket without changes.

With any football team there is a group of diehard supporters who live and breathe their club. These are the people who make the massive coloured flags that fly at games all over the country. They are there through wind, rain and in freezing conditions. They travel on overnight buses to Melbourne or Brisbane to support their team. They are also a very strong network, with some very vocal leaders.

Some long time Panthers fans interviewed for this book said they were shocked when the Weekender story appeared, especially when it suggested that four of the directors were too old and should therefore go. Walsh, Rhind, Heidtmann and Armstrong were well known among supporters. For many years they had seen them, spoken to them, at Penrith and when they travelled to away games. A full-page ad, endorsed by Mulock and Cartwright supported the Footy Five and suggested the other four directors did not care about League.

The supporters said none of it rang true, and word went out. Up till then most had been casual about board elections but that was about to change. Alexander was certainly a factor but, if the members were just following his ticket, two of the Five would have been re-elected.

Matthews says that everyone at the inquiry seemed to assume that all the staff voted the one way and that that was what swung the election. ‘I know for a fact that’s not the case’.

Our employees have always been encouraged to think for themselves. They’re not sheep, or brainwashed, they can make up their own minds. And as for dragging people to polling booths – even if that had happened, which it certainly didn’t, once they’re there – how do I know what they put on their ballot papers?

And there was so much stuff going on anyway. Newspaper ads, all kinds of tickets flying around. Geoff James had people sitting in the foyer watching everything – including who was voting, and that was far more intimidating than anything management could have done. People were handing out Footy Five electioneering material at the railway station to passengers coming off trains, or standing like pizza boys at the lights giving voting cards to drivers.

Roger Cowan says that the end of voting was approached with excitement and apprehension.

The counting of the votes commenced at 6:00 pm on Saturday 5 October. By 7:00 pm, it was becoming obvious that the Five were in trouble.  The only one that even appeared to be in the running was John Bateman. Dennis Coffey was also polling reasonably well, no doubt because both were on the tickets of Alexander and Walsh. 

A few days after the election, I had no problem convincing Glenn Matthews and John Wilson they should drop any plans for leaving. On the other hand, the election result was greeted with anger and disbelief by some of the Footy Five.

Barry Walsh says the Five ‘kept shooting themselves in the foot’. The election result, he says, could never have happened without their ‘comedy of errors’.

The first change in the constitution drew the attention of prospective directors in Newcastle and Port to the fact that they could stand. Maybe they would never have even thought of it. But then the Five aborted the election, when all of them would have been returned.

Then they pushed and pushed for the second lot of changes to the constitution, which meant staff could vote. I’m not sure if even that would have been enough to change the result. But the craziest thing they did was that ‘Board Wars’ thing. They underestimated the power of the people, and that was really stupid.

John Bateman told the Inquiry that it was staff voting that made the difference.

There is no doubt we created the instrument of our own demise in terms of the amendments to the constitution in September 2002, because those amendments brought into play staff voting.

In a 2006 interview for this book Greg Evans said that he didn’t expect that ‘management would turn against them’.

According to Cowan, management had an inkling that the Five had a plan to lull management into a false sense of security. Suspicions were raised at a meeting in the weeks leading up to the election when Bateman congratulated management for keeping the conflict out of the media. Cowan warned his team to be alert. He speculated that a media attack was probably in their plan and would happen at the latest possible time to prevent a good response. The Western Weekender’s Board Wars story reinforced Cowan’s belief that his suspicions had been justified.

‘Staff voting was a big factor but so was Greg Alexander, I accept that,’ says Evans. ‘Greg was always going to get people’s votes.’

Evans also says he heard that ballot boxes had been tampered with, but everyone involved in the election, including the independent company engaged by Panthers to run it, says this is not possible. The DGR, during their initial investigation of the claims by the Five, viewed video footage of the voting and found nothing to substantiate claims of tampering.

Another point made by Evans in the interview was that management involvement in the election was inappropriate. He also denied that he used his newspaper to campaign during the election. Evans’ ownership had been the subject of questioning by Ian Temby at the end of his evidence, but Evans said that he did not have editorial control. However, in the election coverage and material reviewed for this book, his connection with the paper was not disclosed.

Questions about Greg Evans’ ownership of the Western Weekender and the newspaper’s coverage of the Board election also attracted attention outside Penrith. This item appeared in The Australian shortly after the election.

Publication: The Australian 17th October 2002
Column: The Diary (media)
Journalist: Stephen Brook.

This clipping courtesy of Rob Weaver.

Note: A broader archive of contemporary media coverage of the October 2002 Board election has been collected an is availabe: Digital Archive: The October 2002 Panthers Board Election — Contemporary Documents.

Throughout the Inquiry and since, Evans has made interesting statements. He claims there was a planned takeover of Panthers by the unions and says he could produce affidavits from employees intimidated during the October 2002 election. None of these allegations was ever substantiated.

It would have been in the interests of the Footy Five if such evidence had been produced. It was exactly what the Inquiry wanted. There was nothing presented that gave any support to the statements by Evans. There was nothing supporting his claims in CCTV real-time footage of the election, evidence from Newcastle directors, the investigation by the DGR or in any evidence of other witnesses.

In September 2003, one year after the defeat of the Five in the election, Geoff James revealed on Ray Hadley program on Radio 2GB:

We wrote a letter of complaint [to the DGR] in August of last year, and again in June of this year.

The 2002 elections formed part of the directors’ complaints and were part of the allegations listed in Ian Temby’s Instrument of Appointment for the Section 41X inquiry.

Cowan later expressed frustration that members of the Five received relatively little cross-examination from the Club’s legal team. He believed the approach was intended to avoid damaging the standing of the Board as a whole by exposing inconsistencies in directors’ evidence. In his view, a number of claims — particularly those made by Evans — could therefore have been tested more thoroughly.

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Commentary and Contributions

Major Player: Barry Walsh OAM

Barry Walsh OAM

Barry John Walsh

Press Room Manager, Director, Chairman

Barry Walsh’s association with the Penrith Panthers extended across almost four decades and encompassed both sides of an organisation that, for much of its early history, struggled to reconcile the competing interests of football and the licensed club.

A Football Club director from the early 1970s, Walsh became a director of the Licensed Club in the 1980s and ultimately Chairman of Panthers. Along the way he served for decades as a delegate to the NSW Rugby League, managed a NSW representative side, became a Life Member of Panthers in 1987 and a Life Member of the NSW Rugby League in 2002.

His importance to the events described in Panthers, Passion & Politics, however, extends well beyond his longevity.

At several critical points in Panthers’ history, Walsh occupied a position between competing interests.

Around 1980 he helped bridge the deep divide between the Football Club and Licensed Club.

Almost two decades later, he became Chairman as divisions within the Panthers Board were becoming increasingly bitter.

He would occupy the chair through the Parramatta merger controversy, the expansion of the Panthers Group through amalgamations, the Board conflicts of 2002 and the subsequent Temby Inquiry.

Throughout much of that period he was also a longstanding colleague, supporter and friend of Roger Cowan. It was a relationship that placed Walsh close to many of the events that dominate the later chapters of this story, but one that did not always mean agreement.

Role in the Narrative

Barry Walsh first assumes particular significance in the narrative during one of the earliest struggles over how Panthers should be governed.

By the end of the 1970s, relations between the Licensed Club — which generated the money — and the Football Club — which needed much of it — had become increasingly difficult. Roger Cowan believed the answer was to bring both organisations under the control of a single board.

Walsh was then acting secretary (CEO) of the Football Club after replacing Ian Maurice — Walsh’s roots were therefore firmly on the football side of the divide.

According to Walsh’s later recollection, published in Men in Black, Cowan convinced him that the existing arrangement was becoming untenable. Walsh then took the argument back to his fellow Football Club directors. There were 14 directors on the Football Club Board and 12 on the Licensed Club Board and, as Walsh recalled it, the two groups were increasingly pulling in different directions. He urged his colleagues to think about Penrith rather than about themselves.

Eventually both boards agreed to amalgamate.

The decision placed the positions of 14 directors in jeopardy — so there were no guarantees for anyone. When the new Board was elected in December 1980, the Licensed Club directors had the numbers and secured all 12 positions. Not one Football Club director was elected.

Walsh had therefore helped persuade his colleagues to support a structural change that ultimately cost all of them their Board positions.

In December 1983, Walsh was elected to the combined Board until he resigned in 2010.

The episode established a role that would recur during his Panthers career.

Walsh was fundamentally a rugby league man, but this episode demonstrated his willingness to look beyond the immediate interests of the Football Club and towards what he believed were the wider interests of Panthers and its future.

Background

Away from Panthers, Walsh spent his working career with John Fairfax, where he was a press room manager before his retirement.

His involvement with Penrith rugby league began in the early 1970s and developed into what was effectively a second career. By the time he retired from the Panthers Board in December 2010, he had effectively recorded 37 years as a Football Director, and 28 years as a Panthers director. He was highly regarded and was affectionately known as The Football Director by many.

His rugby league involvement extended well beyond the Board room. He managed the NSW Rugby League representative side in 1978, served for some 30 years as a delegate to the NSW Rugby League and was Patron of the Penrith District Junior Rugby League. He was also closely involved with Panthers on the Prowl and served as its Chairman.

Walsh was made a Life Member of Panthers in 1987. In 2002 his contribution to the game was recognised more broadly when he became a Life Member of the NSW Rugby League.

In 2006 the City of Penrith recognized Barry’s contribution to the City by assigning him a position on their Wall of Achievement.

As part of the Queen’s Birthday Honours on 8 June 2009, Barry Walsh was awarded the Medal of the Order of Australia (OAM) for service to Rugby League football through administrative roles in the Penrith district.

These were not incidental associations. Rugby league — and Penrith rugby league in particular—formed the foundation of Walsh’s involvement with Panthers and are important to understanding the positions he subsequently took during some of the organisation’s most contentious periods.

Recognition & Awards
• Life Membership, Penrith Panthers (1987)
• Life Membership, New South Wales Rugby League (2002)
• City of Penrith, Wall of Achievement (2006)
• Medal of the Order of Australia (2009)

Relevance to Events Described

The struggle for Penrith’s survival

By the late 1990s Australian rugby league had emerged from the Super League war into another period of uncertainty. The newly formed National Rugby League intended to reduce the number of teams, and Penrith’s place in the competition could not be assumed.

Cowan wanted the Board to investigate all available options, including a possible merger with Parramatta. The proposal became extraordinarily contentious.

Walsh later drew a clear distinction between investigating the possibility and supporting it. He said he had made it clear from the beginning that he would never vote for a merger with Parramatta, but believed the Board nevertheless had an obligation to investigate the option.

Walsh was a member of the Stand-Alone Committee established to develop and pursue initiatives aimed at advancing the Club’s position on “The Criteria”.

His position therefore reflected something already evident in the Board amalgamation debate almost two decades earlier: a willingness to investigate structural change without necessarily supporting the outcome being investigated.

Becoming Chairman

At about the same time, the composition and culture of the Panthers Board were changing.

Following the death of Deputy Chairman Vern Mychael, Walsh joined the Board Executive. As new directors arrived and began making their mark, the previously stable Board became increasingly divided.

In 1999 Leo Armstrong was replaced as Chairman by Walsh.

Walsh’s elevation occurred in unusual circumstances. He had been a supporter of Armstrong and was not part of the group seeking his removal. John Bateman initially approached Keith Rhind to take the position. When Rhind refused, Bateman approached Walsh. Faced with the reality that Armstrong no longer had the numbers, Walsh accepted the chair.

His subsequent description of his position was telling:

I never had control of the Board.

It was a difficult environment in which to chair an organisation. The Board was becoming divided between directors demanding greater scrutiny of management and others who retained greater confidence in Cowan and the existing management structure. Walsh’s longstanding relationship with Cowan inevitably placed him closer to the latter group, but the events that followed demonstrate that his support was not automatic.

Amalgamation and expansion

As Chairman, Walsh was closely involved when Panthers began pursuing amalgamations with financially troubled clubs elsewhere in New South Wales.

Walsh recalled that management had researched the concept extensively and that it had been discussed for more than a year. He saw potential advantages in expanding the Panthers brand, developing a broader rugby league following and building assets and cash flow. Because many of the clubs being considered were in financial difficulty, he also believed Panthers could acquire substantial assets on favourable terms.

His involvement was therefore more than ceremonial. Walsh understood and supported the strategic rationale behind what became one of the most significant expansions in Panthers’ history.

The expansion would, however, produce unforeseen governance problems — particularly over the voting rights of members joining Panthers through amalgamation.

The aborted election

Those problems came to a head in March 2002.

An election was underway in which members of the newly amalgamated clubs were voting in unexpectedly large numbers. Faced with the possibility of a substantial change in the composition of the Board, the directors unanimously decided to abort the election.

Walsh voted with the other directors to cancel it, despite Cowan strongly opposing that decision.

The episode provides an important qualification to any portrayal of Walsh simply as a dependable Cowan vote.

Walsh subsequently recorded concerns about how the actions of the Board might be viewed by the Department of Gaming and Racing. He stressed that he did not himself believe the directors were improperly manipulating the process, but worried that some recent Board actions might be perceived by the regulator as an attempt to influence the election outcome.

His concern was not merely about what the Board believed it was doing, but about how its actions might appear to an external regulator.

The controversy did not end there. The eventual Football Club election in October 2002 removed five sitting directors. Walsh, Leo Armstrong, Keith Rhind and Terry Heidtmann survived, while Greg Alexander, Greg Chapman, Don Feltis, Kerry Lowe and Col Bentley were elected.

Temby would later describe Walsh, Armstrong and Rhind as strong Cowan supporters. That was Temby’s characterisation, and Walsh’s longstanding friendship and confidence in Cowan certainly formed an important part of his position within the Board. But the cancelled election itself demonstrated that the relationship did not prevent Walsh from supporting a course Cowan strongly opposed.

The Temby Inquiry

As Chairman, Walsh inevitably became an important witness when the NSW Government established the Penrith Rugby League Club Inquiry under Ian Temby QC.

Temby found that significant elements of the information conveyed were incorrect and concluded that Walsh had misled the Board, although he considered this probably resulted from “confusion, rather than mendacity”, on Walsh’s part.

The episode exposed one of the tensions inherent in Walsh’s position. His relationship with Cowan had developed over decades and involved considerable personal trust. But as Chairman and a member of the Executive, Walsh also carried responsibility for independently scrutinising the arrangements surrounding the Chief Executive.

The Inquiry therefore forms an important part of Walsh’s record. It identified shortcomings in governance and oversight for which, as Chairman and an Executive member, he shared responsibility. At the same time, its findings need to be viewed within a much longer Panthers career rather than allowed to define it.

Beyond the Cowan years

Walsh remained Chairman after the Temby Inquiry and after Cowan’s retirement in 2005.

An episode recalled by Glenn Matthews provides an insight into the relationship between Chairman, Board and Chief Executive during this later period.

Matthews had decided to sign Matt Elliott as Penrith’s next first-grade coach before informing the Board. When he approached Walsh at a function and said he needed to speak with him, Walsh immediately asked:

“What have you done?”

On being told that Elliott had already been signed, Walsh responded:

“You what?”

Matthews subsequently prepared a paper explaining his decision for the directors. After considering his reasoning, he recalled that the Board supported him completely.

The episode is revealing. Walsh was plainly surprised that such an important decision had been made before the Board was consulted, but the Board was nevertheless prepared to consider the case Matthews put before it rather than simply react to the way the decision had been made.

Walsh continued as Chairman through much of the decade that followed. He was replaced as Chairman by Don Feltis in 2009.

He resigned from the Board on 22 December 2010, ending an association as a director stretching back almost four decades.

Legacy

Barry Walsh’s contribution to Panthers cannot readily be reduced to a single achievement or controversy.

He was, first and foremost, a rugby league man. His 37 years as a Football Director, decades representing Penrith within the NSW Rugby League, Life Memberships of both Panthers and the NSW Rugby League, and the award of the Medal of the Order of Australia for his service to Rugby League administration attest to that.

But his importance to the Panthers story lies equally in the positions he occupied when the organisation was changing.

Around 1980, he helped persuade Football Club directors to look beyond their own positions and support a governance structure bringing the football and licensed clubs closer together. Nearly two decades later, he became Chairman as another struggle over the organisation’s governance was beginning.

He subsequently presided through the fight to preserve Penrith’s place in the elite competition, the expansion of the Panthers Group, the bitter Board conflicts of 2002 and the searching scrutiny of the Temby Inquiry. He then remained Chairman as Panthers moved into the post-Cowan era.

His longstanding loyalty to Roger Cowan was part of that history, but it does not fully explain Walsh’s actions. At important moments he took positions independently of Cowan, including supporting cancellation of the 2002 election despite Cowan’s opposition.

Their friendship nevertheless survived the conflicts and controversies surrounding the final years of Cowan’s career.

When Cowan was later incapacitated by strokes and living in a nursing home, Walsh was among the relatively small number of former Panthers colleagues who continued to visit him.

Following Cowan’s death in 2017, Walsh reflected on the man with whom he had shared so much of Panthers’ modern history:

Icon is an over-used word, but if ever there was an icon in the licensed club industry it is Roger Cowan.

He added that Cowan was one of those who had “put Penrith on the map”.

Walsh’s own place in that history is different, but substantial.

He began as a representative of the football side of a divided Panthers, helped bridge the gap between its competing arms, and eventually chaired the much larger organisation that emerged. Across almost four decades, he experienced—and at important moments helped shape—the transformation of Penrith from a football club struggling for its place into one of rugby league’s largest and most complex organisations.

Related Topics

Related Themes:

Governance · Conflict · Board Decisions · Football Club

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Editorial Note

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

The Battle for the Board

Part 64 of 70 — Original Chapter: Chapter 18: The Footy Five Make Their Play

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

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The proposed changes to the constitutions of both Penrith District Rugby League Football Club (PDRLFC, the district club) and Penrith Rugby League Club Ltd (PRLC, the licensed club) were put to the Penrith members on 15 September, approved, and implemented. The sitting Board was in the box seat to be re-elected. Traditionally, sitting directors were all returned in a Panthers’ election. The system of placing an asterisk beside the name of each current director, and the apathy with which board elections were viewed by members, had seen few incumbents removed over the years.

The Five needed to retain at least five positions to maintain their majority on the nine-person Penrith Football Club Board. Those directors would then automatically take positions on the newly constituted Group Board.

But five seats would no longer constitute a majority at Group level. On the 14-person Board, additional support would be needed to command a majority.

They needed more than five on their team.

In changing the constitution, Brett Boon and the Board appeared to have missed one vital point.

Boon told the Inquiry that if persons who were members of the football club voted, there would be no breach of either the letter or the spirit of the Act. But, he said, he had no idea that hundreds of club employees were members of the Club.1

During September, another unexpected element came into play. It arrived in the form of Greg Alexander.

Alexander was one of Penrith’s most prominent rugby league figures. In an exemplary career, he captained the Club’s 1991 premiership-winning side and represented Australia on numerous occasions. He was also a good friend of Glenn Matthews, who for the previous couple of years had been encouraging him to stand for the Board.

When it became known that he intended to stand, those close to the situation said that the Five felt confident of building a good relationship with him.

Alexander announced his candidature in the Penrith Press on Tuesday 24 September. In the accompanying interview he referred to the vote of no confidence in Cowan and said the CEO had his support.

That was a blow to the Footy Five.

Their preferred election ticket would have almost certainly included Alexander, the Five and two associates of Greg Evans. Had Alexander supported them — and had they secured the votes — it would have given them eight of the nine seats on the Penrith Board and eight on the 14-person group board.  But now, Alexander had come out publicly with a statement of support for Cowan.

It was on the night of 24–25 September — immediately after the Alexander story appeared in the Penrith Press — that the mysterious envelope described at the beginning of this chapter (Part 61) was reportedly delivered to the Western Weekender.

The battle lines were now drawn.

Despite Alexander’s profile and popularity, his name was not among the eight candidates identified on the Weekender’s election ticket. Candidates numbered one to eight were listed, while beside number nine appeared the words ‘YOUR CHOICE’.2

It was another mistake. The ‘YOUR CHOICE’ instruction left “Footy Five” supporters following the ticket to select a ninth candidate for themselves — the option to vote for some of the people the Footy Five wanted to defeat.

Only six months earlier, some members of the Five had complained that the distribution of how-to-vote tickets in Port Macquarie and Newcastle breached the Club’s constitution. By September 2002, how-to-vote material was being used by them in support of candidates in the Penrith election.

In the two weeks leading up to the election, Weekender readers were bombarded with headlines, articles and photos relating to the election, along with advertisements and letters endorsed by Ron Mulock and Merv Cartwright. Many stories featured allegations and insinuations against other directors and Cowan.

Their supporters were handing out voting advice at many locations including the railway stations and the traffic lights outside the Penrith club.

The Footy Five’s election strategy was obvious — discredit Cowan and make it appear it was them, and only them, who had the Club’s interest at heart. Cowan and the four other directors — Cowan’s Four Kinsmen, as they were called in Mulock’s advertisement — were thwarting the Five in their effort to do the best for Panthers.

The Weekender continued to carry extensive election material through the end of the election. The result, however, was precisely the opposite to what it was pushing — perhaps sending an unfavourable signal to potential advertisers.

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  1. At the time of the Panthers constitutional amendment, s 30(1)(h) of the Registered Clubs Act 1976 provided: An employee of the club shall not vote at any meeting of the club or of the governing body of the club, or at any election of the governing body of the club or hold office as a member of the governing body of the club. In November 2006, the section was amended to add a further restriction: An employee of the club must not vote at any election of the governing body of another club or association if any member of that governing body would, as the result of that election, be entitled or qualified to be appointed (or be nominated for appointment) to the governing body of the registered club. The later amendment therefore expressly extended the prohibition to the type of indirect election arrangement created by the remodelled Panthers constitution.
    ↩︎
  2. The ticket needed to provide for a ninth preference because voters were required to number all nine boxes. A ballot numbered only from 1 to 8 would have been informal. ↩︎

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Commentary and Contributions

The Constitutional Way Through

Part 63 of 70 — Original Chapter: Chapter 18: The Footy Five Make Their Play

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

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Accepting that the Board was set on the path of another constitutional change, Cowan continued to advocate a federalist model, presenting numerous variations.

Craig Terry told the inquiry,

The general manager refused to accept that the board did not wish to accept his federalist model. He repeatedly presented papers on the concept to the board.

Former director Max Connors spoke of Cowan’s methods in the boardroom.

Roger would bring things to the board, sometimes we’d say yes. Sometimes we’d say no, so he’d go away and change it and bring it back again.

Cowan says that in previous years, with previous boards, it was always a bit of a joke.

If I took what I thought was a good idea to the board and it was defeated, I would often think I had failed to present it convincingly enough. So I’d go away and do some more work on it, and then go back and re-present it. I did it for 14 years trying to convince boards we had to have a united effort to run Rugby League. I did it for several months before the Board was convinced to buy the Mulgoa Road property.

Sometimes the failure to bring about change is caused by inadequate information in the presentation of the idea. Sometimes it is caused by the inability of directors to think outside the square. Sometimes irrational argument or incorrect information becomes dominant. At other times the debate in the boardroom raises good reasons for rejection and that’s the end of it.

The culture we had developed over the years encouraged thinking laterally and arguing a point of view strongly no matter who disagreed. One very good example is the amalgamation concept. John Wilson did not take no for an answer. It took him a few meetings to convince us.

It was like that when I presented that first group board model. It was defeated out of hand. I still thought that a board with wider representation was the appropriate way to go, so I looked for modifications that might suit everyone. I really thought it was amusing that making suggestions for change would be greeted with hostility.

Imagine if I had responded that way to John Wilson when he brought up amalgamations. If I had adopted what I saw Craig Terry’s approach, I might have said:

“John, stop wasting our time with that stupid bloody idea. We told you we were not interested, so why do you keep bringing it up.”

We would have missed out on a strategy that will go down in Panther history as one of the best we ever adopted.

It probably demonstrates one of the problems we had at the time. There was a significant gap between the management culture we had developed and the way Craig Terry and other members of the Footy Five believed the Board should operate.

Our team concepts encouraged people to participate and raise ideas without fear of crashing.  Listening to the ideas of others and building on them was something we often practiced through brainstorming workshops.

All the board has to do is say yes or no. That’s the easy part.

The Footy Five had the numbers and they could have said no in less than ten seconds. They could do that every time I raised another modification until they found what they wanted.

I considered that it was my responsibility to come to the Board with every suggestion I could raise that might make the Club better in any way.

The Board continued working with Acuiti, receiving further advice through June, July and August. The Registered Clubs Act required a majority of the a registered club’s membership to be entitled to vote in elections for its governing body.1

Panthers’ total membership was now around 130,000. If voting rights were restricted to the approximately 50,000 Penrith members, as one proposal contemplated, the requirement could not be met. Another mechanism was needed.

It was decided to increase board numbers to 14, at the same time introducing a qualification for election to the group board. The Penrith District Rugby League Football Club (PDRLFC) was a separate legal entity, and not covered by The Registered Clubs Act. It also had a board of nine. Under the proposed structure, any director elected to PDRLFC would automatically have a place on the Board of the licensed club. The structure would give the nine directors elected to the PDRLFC Board nine of the 14 positions on the licensed club Board. The other clubs would be guaranteed places on the Board, but there could be no more than two from any one club.2

This proposed change would overcome the problem caused by the 50% requirement.

Brett Boon said he ultimately employed a model similar to those used at some RSL clubs, where board members must have a qualification, such as having served overseas, or being a member of a sub-branch.

Temby and counsel questioned whether the proposed structure amounted to a device for circumventing requirements of the Act.

Craig Terry felt that,

The mechanics of it may, in a tenuous way, still comply with the legal requirements in the Registered Clubs Act.

We were reminded [by Boon] and it was really self-evident, that there were many other models out there employed by other clubs which had the same notion of qualification of directors before they could form part of the board.

At the Inquiry he, and others of the Five, stressed continuously that they had been taking advice from Acuiti as to the model’s legality. Craig Terry said,

I would fully expect Mr. Boon to have been fully knowledgeable on these sections and if he thought the model we were proposing incorrect that he would have highlighted that to us.

Boon, on the other hand, stressed that he was under instruction from the Board.

The proposed change would overcome the 50% problem, and remove some other restrictions covered by the Act. This decision, to transfer the election of nine directors from the licensed club members to the members of the district football club, had some unforeseen repercussions.

It was another little tile in the mosaic that was forming in September 2002.

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  1. The requirement that a majority of members be entitled to vote in Board elections is discussed more fully in Part 51 — A Simple Change, Made So Difficult. Section 30(9)(a) of the Registered Clubs Act required a majority of a club’s full members to be entitled to vote in elections for the governing body. Social Members were legally a subclass of Ordinary Members and were therefore included as full members. In 2006, the required proportion was reduced to 25%, provided the change was approved by a majority of full members.
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  2. The Panthers organisation comprised two separate legal entities: Penrith District Rugby League Football Club (PDRLFC — the Football Club) and Penrith Rugby League Club Ltd (PRLC — the licensed club). In 1980, the two Boards were brought together. This did not merge the two legal entities or create a single Board governing both. Each entity retained its own Board, but the same people served on both, helping ensure that the two organisations operated with a common direction. See Part 19 — A Solution — Of Sorts. ↩︎

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Commentary and Contributions

Promises, Voting Rights and Penrith Control

Part 62 of 70 — Original Chapter: Chapter 18: The Footy Five Make Their Play

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

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Acuiti delivered its report on Panthers’ amalgamation processes to the Board in May 2002.

Walsh said that although the exercise cost the Club a lot of money it was carried out with no input from him. Not one of the managers involved in formulating or carrying through the amalgamation process was consulted.

It appears that the only people from Panthers who contributed to the preparation of this report were from the Five directors. The report contained 42 separate criticisms of the way Panthers had undertaken its amalgamations, many of them directed at management.

Those involved in the amalgamation process attended a series of meetings, spending around 50 hours dealing with the issues raised. A detailed response addressing each point was prepared and tabled for the Board. It was never discussed at a Board meeting.

On 31 July 2003, more than a year later, Roger Cowan received a letter from Boon. Boon explained that his report had been prepared as ‘essentially a discussion paper for the forthcoming board meeting’. He said his company had envisaged the report would facilitate discussion, and that further information would be provided to clarify the issues raised. Acuiti would then, taking everything into account, make its final comments and recommendations.

Boon’s letter continued that unfortunately neither management nor Acuiti itself was given an opportunity to discuss the report in any detail at any meeting. It acknowledged management’s responses to the 2002 report. It also concluded that Cowan and management had nothing to answer.

Barry Walsh estimated that the Acuiti exercise ultimately cost the Club far more than $400,000. He included the management time spent preparing a response, the diversion of managers from other Club responsibilities and other incidental costs that could not be accurately assessed.

A new election had to be scheduled. But by mid-2002 the Board had decided that the new nine-seat structure, which guaranteed five seats to Penrith, was not satisfactory. Craig Terry told the Inquiry that the simple majority model of five out of nine was not very ‘robust’, because it did not necessarily ensure that Penrith members retained ‘decent control of the organisation’.

There was a logical explanation for why a simple majority might not have been considered sufficiently ‘robust’. The model allowed up to four directors from non-Penrith sites to be elected. Even the election of one non-Penrith director would necessarily displace a sitting board member. If that person were a member of the Footy Five, their five-four majority would disappear.

By now, members from the clubs outside Penrith had been confirmed as Panthers members and, as such, had the right to vote – and stand for the Board. The distinction between Penrith members and members of the amalgamated clubs was evident in Terry’s explanation. He said that ‘the Penrith members were pre-eminent in our minds because they were the ones where we had a duty’.

Cowan took a different view. He argued that the memoranda of understanding had promised members of the amalgamating clubs particular rights in return for the transfer of substantial assets to Panthers, and that those commitments also had to be honoured.

The memoranda of understanding promising certain rights in return for the transfer of millions of dollars in assets to Panthers apparently had no effect on Terry’s sense of duty, according to Cowan.

After the cancelled election, Cowan continued trying to find a solution that would preserve the rights promised to members of the amalgamating clubs. The Board majority, however, had placed greater weight on ensuring continuing Penrith control.

Dennis Coffey was asked in the Inquiry if it concerned him that promises that had been made by Cowan would be broken by the constitutional changes, and that those members would be denied the rights they had been promised.

When I realised the problems that it could have caused our club, it didn’t concern me at all.

He agreed with counsel’s statement that he saw his duties as protecting the interests of Penrith members.

Ian Temby responded,

And if promises were broken, too bad?

Temby asked if Coffey knew that Cowan had been given authority by the Club Board to enter into negotiations for amalgamations. He said yes and then denied that he knew the amalgamating members would receive full voting rights. He had however been being a director on the Board that helped to devise – and approve – the amalgamation criteria, and entered into a memorandum of understanding setting out the rights of amalgamating members for each amalgamation.

All the directors of that time agree that Cowan strongly opposed the changes that would lessen the rights of the new members. John Bateman confirmed that Cowan repeatedly objected to both the cancellation of the election and later constitutional amendments on the basis that they were both unnecessary and meant that promises would be broken.

Temby asked Bateman,

Why shouldn’t it be thought that the Club behaved dishonourably in effecting that change?

Bateman replied,

Dishonourably is a strong word.

Temby:

I am not mincing my words and it is right that I shouldn’t.

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Commentary and Contributions

Board Wars

Part 61 of 70 — Original Chapter: Chapter 18: The Footy Five Make Their Play

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

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It is sometime between midnight and dawn on Wednesday 25 September 2002. A shadowy figure approaches the offices of The Western Weekender newspaper in Abel Street, Penrith. He wears dark clothes and a hat pulled down over his eyes. He carries something in his hand.

A car cruises slowly past, and he jumps back into the doorway of the neighbouring building. Safe once again, he steps out onto the lonely street. After a quick glance each way, he climbs the few stairs to the door of the office. The arc of the streetlight now reveals what he is carrying. He reaches out and places a large envelope on the doorstep of the building.

His mission is accomplished. Visibly relieved, he walks briskly away from the scene, not once looking back.

The scenario above is a dramatised version of a purported incident that would have a significant bearing on the campaign leading to the replacement election in October 2002.

According to the Western Weekender editor, when he arrived on the morning of 25 September, he discovered an envelope on the doorstep. The envelope, he said, contained what appeared to be ‘authentic documents’ relating to Panthers, some dating back to 1998. The documents became the basis of a front-page story in the newspaper, published that very same day. Although the date on the newspaper is Friday, 27 September, numerous people report seeing it late on the Wednesday, 25 September.

On that account, in the space of only a few hours the anonymously delivered material had apparently been assessed, sources confirmed, interviews conducted, the story written, and the newspaper laid out and printed by Wednesday afternoon.

The banner headline screamed ‘Board Wars’, and a full-width photograph show the Panthers Board of Directors, but the image was ripped down the middle.

Front page of 'The Western Week-Ender' newspaper featuring the headline 'BOARD WARS' with the subheading 'Management under fire', accompanied by a group photo of eight men in formal attire.
Western Weekender 27 September 2002. Front Page. Clipping from the Weaver Collection

The story underneath spoke of a split in the Board, revisited in detail the proposed Parramatta merger, the stand-alone committee, and spoke of the ‘now famous FOOTY FIVE’. The story quoted John Bateman as a member of the Five, but failed to mention that Greg Evans, the owner of the newspaper, was also a member of the group. It also contained criticisms of Cowan and the remaining four directors, labelling them Cowan’s ‘Four Kinsmen’.1 It exhorted Panthers’ members to get rid of this ‘old guard’.

Digital Archive: The newspaper coverage, advertisements and public statements surrounding the October 2002 Panthers Board election have been collected in The October 2002 Panthers Board Election — Contemporary Documents (PDF).

Until that week nobody, few people outside Panthers’ directors, senior managers and their families, were aware of the extent of the rift and tension in the Board. There had been a concerted effort by everyone to keep the conflict quiet and try to get on with business.

At management meetings, serious consideration had been given to calling an extraordinary meeting to make members aware of the degree of dysfunction at Board and management level.

The management team always reached the same conclusion. Such a radical move would harm the Club and make the bank nervous. In hindsight many believe it would not have been such a bad idea. Keeping the problems under wraps had not prevented serious damage. What followed included aborted elections, substantial legal expenses, a crippling inquiry, damaged management morale, loss of market share and other flow-on effects.

The Weekender story was a declaration of open war. It made the people of Penrith aware there was a serious problem at Board level. And the Club’s staff also became aware of the situation.

Long-time director Keith Rhind says the months following the aborted election of March 2002 were a terrible time. He would leave his home in the Blue Mountains to drive to a board meeting, hoping all the way that his car would break down so he would not have to go.

Board meetings would go till midnight or later. Matthews calls the behaviour of some of the Five ‘disgraceful’.

I just can’t believe that intelligent people can get in a room and they just want to play the man and not the ball. Some of the board meetings were really dysfunctional. They’d ask you for some information again and again. A couple of times one of them attended the meeting after having far too much alcohol. Bateman and Evans would often pass notes to each other.

According to Matthews one meeting almost ended in physical violence. Evans was screaming abuse at Cowan and Wilson, accusing them of being liars. Matthews himself was also accused of lying. Finally, chairman Barry Walsh exploded. His efforts to call the meeting to order had been ignored, leapt out of his chair and headed for the director who appeared to be drunk and was disrupting the meeting. Cowan intercepted Walsh, slowed things down and helped restore order.

Brett Boon said the situation was a nightmare. He told the Temby Inquiry,

There was a very long period, with board meeting after board meeting which lasted five, six, sometimes seven hours. They were very hostile, aggressive meetings, a lot of politics going on with different factions of the Board.

During questioning by DGR counsel Vicki Hartstein about the constitutional changes, Walsh said the Board had given Acuiti full control to take the Club to the next point.

She asked him about a letter of complaint from the Port Macquarie club asking for an explanation of the constitutional changes. She says,

… you were the chairman of the board of this club and it seems from this letter that complaints about the integrity of the club are being made. Didn’t you regard that with some concern?

Walsh replied,

The scene was changing. Acuiti had the reins, and they were being directed by Mr Terry and Mr Bateman and the Footy Five. Of course I was concerned, but our legal people were handling it and I was not privy to what Mr Boon was doing.

Not once did they contact me to give an opinion. Not about anything. For a better word, the Footy Five had control of the Board and they had the ear of Acuiti..

Hartstein asked, ‘You didn’t follow it up?’

Walsh answered,

It’s not that I didn’t follow it up. I never had control of the Board.

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  1. The front page story doesn’t refer to the “Cowan’s Four Kinsmen” quip. That appears later in the same issue of The Western Weekender. The issue carried a number of stories related to the imminent election of the Penrith District Rugby League Club Board. ↩︎

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Commentary and Contributions

On a Lighter Note

A removed section from the original Chapter 17: Aborting the Election. It has been removed from the main Series because it sits apart from the chapter’s account of the decision to stop the 2002 Board election and its consequences. It is retained here because it provides a revealing—and rather lighter—glimpse of what happened afterwards, when Roger Cowan and members of his management team informally reconstructed what the result might have been had voting continued.

The aborted election at Panthers in March 2002 added a little comedy to a stressful period. Voting was a subject of conjecture by Ian Temby and counsel at the Inquiry. The conclusions they reached were not accurate, according to Cowan.

On the Saturday after the election was cancelled, Cowan invited the management team and their partners to a barbecue at his home. To add interest, he promised they would find out who would have been elected had the ballot not been aborted. At first there was a little soul searching about the legality of counting an aborted ballot, but a quick call to the club’s legal expert soon put everybody at ease.

The clubs other than Penrith were a simple matter. They had all completed voting before the ballot was aborted. Penrith was a little more complicated because there were still two days of voting to go when the election was called off. But there were sufficient votes in to determine the trend. Up to the cancellation, a certain percentage of voters had, for example, voted for Barry Walsh. It was likely that the percentage would be similar in next lot of votes.

There was also sufficient experience of elections at Penrith to estimate the number of votes that would likely have been cast in those final two days. It then became a simple calculation to arrive at the probable number of votes that each candidate at the Penrith site would have received. These estimates could then be added to the actual votes from the other sites that would be very close to the outcome the election might have delivered.

The missing two days of voting at Penrith was vital to the calculation, and it was not taken into account by the Inquiry.

It was a pleasant evening. A few good bottles of red wine had added a bit of sparkle to proceedings and everyone took a place around a table that would serve as the tally room.

Who would have been elected had the ballot been completed?

There were a few guesses – even a few friendly challenges. Would the How-to-Vote ticket at Newcastle and Port Macquarie swamp the Penrith votes, and fulfil the fears of the Five? If Newcastle and Port Macquarie were successful in getting their four candidates elected, which four of the current Board would miss out? In that gathering it was a unanimous hope that it would be the Footy Five.

The total number of votes cast for all clubs including Penrith was only a little over 3,000. Penrith accounted for more than 1,000, around 900 voted at Newcastle and about 700 at Port Macquarie. The other clubs made up the total.1

The ticket distributed by Newcastle and Port was partly effective, but there was another voting result that came as no surprise to the management team. A large proportion of the voters at both sites supported the re-election of the existing board in its entirety.

Before the counting of the Penrith votes, the candidates at Port Macquarie and Newcastle
were in front of some of the Penrith candidates.

The votes cast at the Penrith site were strongly in support of retaining all sitting directors. As the votes mounted, the candidates from the other clubs continued to slide down towards defeat. At the end of the exercise, the management team and their partners erupted in laughter and called for more wine.

For those around the table, the irony was irresistible. Their reconstruction suggested that, by aborting the election, the Footy Five may have outsmarted themselves. All but one appeared likely to have been returned with a clear majority. Evans would have missed out. He had resigned the previous year, and as a non-sitting director, his name did not have the customary asterisk beside it on the voting form. Terry Heidtmann was in a neck and neck battle for the ninth seat. With only a few more votes than the number estimate for the missing two days of voting, the reconstruction indicated that he too was likely to have been re-elected.

Related Topics

Related Themes

Conflict · Board Decisions · Governance

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  1. The 2002 ballot was not a conventional Panthers election. It was the first in which members from the amalgamating clubs participated and voting had been completed at the other sites before the election was stopped. The reconstructed result therefore combined actual votes already cast with an estimate of the remaining two days of voting at Penrith; it should be understood as an informed reconstruction rather than an official election result. ↩︎