The Cost of a Good Story

Part 35 of 70 — Original Chapter: Chapter 10: A Narrow Escape from Football Oblivion

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

The information night on 7^th September 1998 was intended to provide clarity. Instead it intensified the debate. Media coverage and public reaction quickly hardened positions and narrowed the club’s options even further.

A front-page account of the meeting in The Western Weekender opens with a blatantly false statement:

In a historic announcement, the Panthers board of directors told the rugby league world that the mighty Penrith Panthers were to compete in the National Rugby League competition as an elite and single identity.

The article quotes Cowan as saying that ‘the stand-alone option was always the preference of senior management and the Board’.

Inside the paper in a double page spread, Mick Kelly lets rhetoric run riot. He quotes Mulock, the club patron — and its saviour, according to Kelly — as saying that Cowan and Levy’s efforts ‘have been skewed towards a merger with Parramatta’.

Editor’s Note: The way the meeting was subsequently presented in the local media is examined further in Following the Merger Debate, which reproduces the principal newspaper coverage from the period together with historical commentary.

Looking back, Cowan still found the events of that period difficult to understand. Why was Mulock so attached to arguments that were not reflecting the truth? Either he was being misinformed or his passion for Panthers was clouding his judgement.

After the public meeting and the subsequent newspaper coverage, feeling in the community was galvanised.

At the next board meeting, a resolution was passed that the club ‘cease all joint negotiations and stand-alone’. The Board also resolved to form a committee to promote the stand-alone position.

In Cowan’s eyes, this was a totally blinkered attitude. If there was to be a committee, its focus should have been to make sure Panthers was represented in the competition. Forming a committee with the sole purpose of supporting and propagating this one idea was ridiculous. It did not acknowledge the great danger that Panthers could be dropped from the competition.

The feeling at the time echoed the sentiments expressed by John Bateman in a Western Weekender front page story of 24 July:

Panthers brings too many aces to the table to be considered a weak link in the NRL competition.

He used the ‘largest junior league in the world’ as a reason why the club was safe from relegation, but, as we know, the junior league component was never a factor. Roger Cowan explained the NRL’s rationale for this.

The size of the junior league at any club is an asset to the entire league, whether it is centred around the Penrith club, or Parramatta, or any other club. If it is divided amongst a whole lot of other clubs, it evens out the distribution of junior talent. In other words, it would have been an advantage to the other clubs chosen for the competition for Penrith not to have ownership of its junior league. All that young talent would have been there for the taking.

We tried, very early in the process of setting criteria, to have junior league strengths given some recognition. There was no support for that proposition. Most clubs have believed that Penrith and Parramatta had an unfair advantage by having such large areas of juniors. They would hardly support something they saw as unfair being given an advantage under the criteria.’

Bateman and the other directors admit to being bombarded with information and reports from management during this period, so it is difficult to understand him making comments indicating the NRL would not dare discard the Panthers. Cowan says it was very frustrating to read this kind of statement, especially from someone like Bateman, who had been given all the facts.

Once the ‘Stand Alone’ Committee was formed,¹ Cowan says he was absolutely appalled to hear Bateman, Mulock and other leading citizens of Penrith parroting the South Sydney line — that the NRL ‘would never drop us’.

The committee had representation from local councils, and from local community organizations and businesses, as well as people from Panthers management and Board. The purpose of the committee was to devise strategies that would convince the league decision makers that they could not drop Penrith.

Souths were using the same strategy – make lots of noise, build emotion, get the people marching in the streets – and it failed them miserably. Souths had far more emotion and tradition on their side than Penrith, being one of the foundation clubs in 1908 and having an outstandingly successful record. They also had the support of some very high profile people, yet they were dropped. Even though they were eventually reinstated, the loss of a year’s competition was damaging. Ultimately the courts supported the NRL’s right to drop them from the competition. Souths is only there because News Limited softened its stance, just for Souths. Without that, Souths would have been gone forever.

But in 1998, the powers that be at Souths had chosen to ignore the determination of News Limited to have a fourteen-team competition. Panthers was doing the same. News Limited had already conceded its original position of 12 teams, and agreed on 14, but Cowan could see that they would not go to 16.

Despite his reservations, Cowan agreed to join the committee. Ron Mulock was also on it, as were Leo Armstrong and Terry Heidtmann. Former Panthers operations manager Tony Lackey attended the meetings, which he says were held every second Friday. ‘They were always bad, there was lots of conflict. It got very uncomfortable.’²

Cowan found the situation very difficult. To him, it was a counterproductive exercise.

At every meeting he [Mulock] was repeating word for word things that I had said in the boardroom a week earlier. Worse, he was using things I had said in those board meetings out of context.

In the committee meetings I continued to push the fact that the agreement between NRL and ARL was written in stone. We would not be in the competition unless we could take our place in that fourteen under the criteria. There was never any doubt of that in my mind.

David Gallop confirms that the NRL was serious about its selection procedure.

There’s no doubt that the criteria process was a genuine exercise. And even though Souths was readmitted, the High Court ultimately found that we had behaved legally in eliminating them in the first place.

And Penrith were down the bottom, if you like, in terms of the way they were running under the criteria, so there’s no doubt they were in trouble. They were facing a serious threat of being excluded from the 14-team competition.

By now, independent voices from very different perspectives were reaching much the same conclusion: Penrith had been in genuine danger of exclusion.

Journalist Roy Masters believes Penrith went perilously close to being eliminated. He adds that the Board’s stand-alone resolution had effectively closed any doors that might save the team.

In fact, if it hadn’t rained non-stop in Gosford in 1999, there would be no Penrith team today. My view is that Roger had an obligation as chief executive to put it to his board as an option, and he would have been culpable if he had not.

Soon after Super League and the ARL had agreed on the new 14 team competition, it became clear that thirteen teams were pretty much secure in their positions in the new competition. Through 1998, Penrith continued to monitor the statistics week by week, and nothing changed. They were still sitting at number sixteen. The two teams ahead of them were Adelaide and North Sydney.³

On 1 December 1998, News Limited and the NRL announced they were pulling their financial support for the Adelaide Rams. From Cowan’s perspective, the announcement brought both encouragement and disappointment. It moved Penrith into fifteenth position. But it also sent a message that decision would be made regardless of political noise. The South Australian premier and the CEO of News Limited in Adelaide appealed for Adelaide to stay in the competition. They were supported by leading businesspeople. It made no difference. In relation to the criteria, however, Penrith was still well behind North Sydney, as Cowan explains —

During the year leading up to the ARL/Super League merger, North Sydney had negotiated relocation to Gosford. Their ground and facilities at North Sydney were out of date. The demographics of their area had changed dramatically, greatly diminishing their supporter base. On top of this, the Central Coast of NSW is a very strong rugby league area and had been crying out for its own team for years.

I watched this strategy evolve with a sinking feeling. The relocation was a disaster for Penrith. The state and federal governments had combined to provide grants of $20 million to build a modern stadium at Gosford. Norths had made a brilliant move. Their claim to a place in the competition now seemed to be considerably strengthened. Panthers had no hope of leap- frogging them under those circumstances.

If we could have read the future, we could have all relaxed and there would have been no conflict. Our crystal ball was not that good, and I suspect that Norths’ crystal ball was not giving them much more at that stage.

The damage suffered by Norths weakened it position, and by the end of the year, Penrith might have been slightly ahead. However, the influence of the new ground at Gosford was an unknown factor. For Norths, it went deeper than points on the criteria. But as far as the world knew, in mid-1999, Norths was in an unassailable position.

By July that year, Panthers had no strategy in place other than to demand selection based on arguments that had already been discredited. The Footy Five, with their numbers on the Board, and supported publicly by Ron Mulock, had moved to gag all discussion. There was an orchestrated campaign to make sure that Panthers could not even discuss contingencies at board level. It is difficult to understand their actions. It can never be in a company’s best interests for a board to suppress discussion of a threat that could have enormous repercussions for the business.

Cowan feels angry looking back at that period and remembers how bad the outcome might have been.

Had Norths survived, both Souths and Penrith would have been eliminated. Penrith would have had no bargaining power, and we would have been forced into a takeover by Parramatta or a year fighting alongside Souths for reinstatement. Having two clubs fighting for re-instatement would have probably hardened the resolve of the NRL to let the courts decide. Otherwise, it would have been signalling that the whole strategy of using criteria to reduce the number of teams was just a farce. The court, which ruled for the NRL against Souths, would inevitably have ruled the same way with Penrith.

Through all this, there were the thousands of members who had no idea of what was going on behind the scenes. I wonder how they would have felt when they suddenly found that they had no team playing in the top competition?

By the middle of 1999, the position appeared bleak. The contingency planning had ceased, discussions with Parramatta had ended, and the Board had committed itself to a stand-alone strategy. Having exhausted every practical option available to it, Panthers could do little more than wait for the NRL’s decision.

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Well before this Stand-Alone Committee was formed the Panthers Marketing Team had started work on boosting those categories in the Criteria where Panthers was struggling — home game attendances, gate revenues and sponsorship income. Concept had already been planned, budgeted and were already active. The Our City, Our Team campaign was financed secretly by Panthers as it needed to be a grass roots campaign demonstrating the support of the community for the Club — neither the Board nor the Stand Alone Committee were made aware of this.
↩︎
Other members of the committee were Tony Ferguson (who chaired the meetings), Phil Morehead (from Panthers advertising agency), Max Cowan (Panthers Marketing Team).
↩︎
See Beyond the Book — Survival Becomes a Numbers Game . ↩︎

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Outlining the Risk for the Board

Part 32 of 70 — Original Chapter: Chapter 10: A Narrow Escape from Football Oblivion

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

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Considering the possible contingency responses was one thing. Recommending a course of action to the Board was another. By early 1998 management believed it could no longer treat the issue as a theoretical exercise.

By early 1998, Cowan says he and Levy had reached an unavoidable conclusion.

We came to the conclusion – we just have to do something, otherwise Panthers is going to disappear off the face of the earth as far as rugby league is concerned

We were in a weak bargaining position because it was quite obvious that we could not make it under the criteria. If we started negotiations early enough, we could use the strength of the Panther brand and our junior league to reinforce our position. Waiting until we missed selection would leave us nothing more than a takeover target. If we had to merge it should be as an equal partner. Then, at least, half of our games would still be played in Penrith and the Panther brand would continue to strengthen.

Together they prepared their first formal recommendation to the Board—that Panthers should at least begin exploring the possibility of a merger with Parramatta.

Every chief executive has a duty to advise the Board of risks that may threaten the organisation’s future. Failing to do so would represent a serious dereliction of responsibility. Equally important is the obligation to identify available options and make appropriate recommendations. If Panthers genuinely faced exclusion from the national competition, management had a duty to ensure the Board understood both the risks and the possible responses.

Management’s recommendation was not that Panthers should merge with another club. Rather, it was that the Board should investigate every realistic contingency before circumstances removed those choices. If the club’s worst fears were realised, directors would then be able to make an informed decision from a position of preparation rather than desperation.

Between 1995 and1999, the structure of the Panthers board changed dramatically. John Bateman, who had been elected to Penrith Council in 1995, was appointed to a board vacancy in the same year. He had worked well in what had been a strong and cohesive board. But between 1997 and 1999, three seats became available on the Board. They were filled by Craig Terry, Greg Evans and Dennis Coffey, some of whom had social and business ties with Bateman.

Cowan began to feel a change in the attitude of long-term director Geoff James who seemed to be developing a close alliance with the other four. Before long, the removal of long-serving Chairman Leo Armstrong would point to the existence of a faction for the first time in the Panthers history. In answer to a question in 2007, John Bateman insisted that there never was a faction, except in his final year on the Board, 2002.

Despite the changed board dynamics at Penrith, both Penrith and Parramatta
were willing to discuss all options in the early stages of negotiations. Neither board really wanted to amalgamate, as Cowan explains,

Had there been a vote at Parramatta the outcome may have been a small minority in favour. We know what the vote at Penrith would have been and there is absolutely no doubt about it – nine directors against amalgamation and none in favour. That never, ever changed.

So, if that was the case, what was the point of discussing it at all? And why was there a softer attitude towards amalgamation at Parramatta
than there was at Penrith? Probably, the main reason was that for Parramatta, it was never a life and death decision.

For us, it was. All the facts that Mark and I had presented to the board showed that we were in critical danger of not being in the competition. We were way behind in the criteria stakes and the teams would be only selected on the basis of criteria points. Confronted by such evidence, it would have been totally irresponsible for a board to sit back and do nothing. All the directors were prepared to look at options, but not one of them would have voted in favour.

Mark and I believed we had a responsibility to make sure the board was fully informed about the risks. We could keep putting off any decision until the last possible moment but if we had nothing planned by the time the axe started to fall it would be too late.

There was some strong logic behind the Penrith directors’ total opposition to amalgamation. Parramatta was in a much stronger negotiating position and some felt that it would be more of a takeover than an amalgamation.

My discussions with Denis Fitzgerald were never in that vein, however. In fact, our discussions were only ever about how we could set up a new club with equal ownership that would be the strongest club in the competition. If we were to be simply taken over, the option of buying naming rights would be a better commercial decision because it would leave open the possibility of fighting for reinstatement through the courts

So, all nine Panthers directors were adamantly opposed to any such idea, but they generally agreed that there could be no harm in opening discussions with Parramatta.

Significantly, there were no objections, even from the five directors who would eventually claim recognition as the ‘Footy Five’. A couple of joint board meetings of the two clubs were held around August that year. The first was hosted in the Panthers boardroom over dinner. Everything went reasonably smoothly, and it was decided that Parramatta would host the next meeting.

It was clear at these meetings that neither directors nor managers from either club were over the moon about the prospect of amalgamating. At that stage, both clubs were still prepared to examine the possibilities rationally. That would soon change.

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Preparing for the Worst

Part 31 of 70 — Original Chapter: Chapter 10: A Narrow Escape from Football Oblivion

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

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By this stage, Panthers’ management believed it had three realistic contingency options. Their aim was to have each sufficiently developed before the NRL announced which clubs would survive. ¹

One option was to negotiate a favourable merger with another club — a merger that would be a true partnership with equal rights. Half the home games would have to be played in Penrith and the team would have to be called Panthers. Years of consistent marketing had established Panthers as one of the club’s strongest commercial assets, giving it value in any merger negotiations.

Another option was to buy the naming rights of another club. It would have been little consolation to Panther supporters to have a Melbourne Panthers or a St George Panthers, but from a purely commercial point of view it would have been better than having the Panther brand completely eliminated from the competition.

The other option was to prepare for a legal fight based on the fraudulent activities of some clubs in their claims under the criteria. How could the criteria be used for selection if it could be proved that several clubs had blatantly cheated? And Panthers had that proof². There were difficulties with this strategy. Court proceedings are inherently uncertain and can take years to resolve. Panthers would almost certainly have been excluded from the competition during that period, making the option financially and operationally damaging.

Although very different in their execution, each option had the same objective.

Management was not searching for reasons to abandon Panthers’ identity. Quite the opposite. Every proposal was an attempt to preserve the Panthers brand and ensure the club remained part of the national competition if the selection criteria ultimately went against them.

If exclusion proved unavoidable, management believed an equal-rights merger offered the best opportunity to preserve both the Panthers identity and a continuing presence in the national competition. But it would be difficult. A merger could be stalled as long as possible, but the negotiations should not be left so late that they had to be rushed and driven by the desperation of any final decision to cut Panthers.

The combination of Penrith and Panthers had brought valuable publicity to the city and a strong word association. The loss of that association became one of the strongest objections by those who opposed a merger. From management point of view it was better to salvage the Panthers brand than to finish with nothing at all. To some people, though, nothing at all was better than linking Panthers with another locality.

For management, preserving some future for Panthers was preferable to risking no future at all. For many supporters, however, the very thought of compromise was unacceptable.

There was also an inconsistency in the arguments of some. In their early days with Super League, the Board and management had been discussing the marketing disadvantages of the name Penrith Panthers.

Some surveys had indicated that having Penrith in the name was detracting from support in nearby population centres such as St Marys, Mt Druitt, and Blacktown. Geographically, these should have been areas of support. Penrith junior league extended as far as Blacktown. Many players were coming out of those areas, yet many people from those areas supported other teams. The Board decided that it might help build support if a name were chosen that allowed people to believe they were supporting a team representative of their own area.

The unanimous decision of the Board was to register the name, ‘Western Sydney Panthers’.

Early in 1998, Cowan and football club CEO Mark Levy began to look closely at the merger possibilities. Options included Western Suburbs, Parramatta, and Balmain. Geographical remoteness was against a merger with Balmain, and for Wests, Canterbury seemed a more suitable choice. However, the club did have discussions with Western Suburbs.

If the club were forced to merge, Parramatta had to be the most logical choice. It was geographically perfect and the combined strengths of Parramatta and Penrith would have created the most powerful club in the competition.

Penrith had twelve months to compete for points. Two clubs – the Hunter Mariners and the South Queensland
Crushers – had already dipped out, leaving 20 teams vying for 14 places.

Denis Fitzgerald agrees. He says that the Parramatta club’s preferred choice for a merger was Balmain.

They were going to struggle to make the criteria, and their district boundary comes to the Clyde/Carlingford railway line here, so it’s quite close to us. A lot of people who live around the Ryde area might support both Parramatta and Balmain. But some of the old Balmain stalwarts felt that we were too strong. I was disappointed when it fell down. I thought maybe Penrith would be too strong themselves, but there could have been a great future in a joint venture with Penrith.

If it had happened, it was going to dominate the whole of western Sydney and all those growth areas. Although there’s some growth in the south-west, the biggest area stretches from Granville/Rydalmere to the lower Blue Mountains. It is a massive area. Commercially, it had great sense, but it was football, where so many positions are not based on logical, commercial reality, but on emotion and tradition — and that’s what ultimately happened.’

Parramatta was interested in a joint venture for a number of reasons but had not made any decision other than to investigate the various options.

The Parramatta Chairman, Alan Overton, sent a letter to his club’s members outlining his reasons for considering the move. In part, it said:

I think all keen, long term Eels fans, like myself, would love the club to continue as we have for the past 50 years, and continue to be the Parramatta Eels, playing at Parramatta Stadium. But … whether we like it or not, there will be only 14 teams in the NRL in 2000.

He went on to say that,

… boards cannot afford to adopt a narrow minded or blinkered approach to joint ventures but rather should attempt to be as objective and professional as possible.

Although their club was safely ensconced in the fourteen, the Parramatta board saw benefits in a merger. The new league administrators were offering major incentives for teams to merge, both on a financial level and in various guarantees. Increased supporter base, sponsorship and gate receipts would be additional benefits. At that time there was great uncertainty about the potential for stand-alone clubs to compete with the joint ventures for more than a few years. Even clubs certain of selection, such as Parramatta, had the nagging doubt that their survival might be for the short term only. Parramatta was taking the responsible course examining all options for its future.

Fitzgerald said the early talks with Cowan were very informal, just chatting more than real discussions.

Roger was concerned with their position — making the criteria. They were in the worst position of any of the Super League franchises. When the curtain went down after one year of Super League and the NRL was formed, Penrith was in a pretty weak position.

For us, it was certainly about the money, and the risk. We had all spent money, but the ARL clubs had never had the type of subsidies that Super League had given its franchises. That funding was now being chopped off with the NRL starting.

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