Salvation in $400m deal for Cronulla

Tested ... the chairman of the Cronulla Sharks, Damian Irvine, and captain Paul Gallen are relieved the club has managed to turn around its fortunes.
Tested ... the chairman of the Cronulla Sharks, Damian Irvine, and captain Paul Gallen are relieved the club has managed to turn around its fortunes.

WITH the stroke of a pen and $10 million in their coffers, the wolf was finally banished from Cronulla's front door on Friday as chairman Damian Irvine admitted the Sharks were close on several occasions to being shut down because of spiralling debt.

Fairfax Media was on hand when Irvine received the payment for a residential and business development at Toyota Stadium valued about $400 million. The proposal was drawn up in 1999 and in recent years was seen as the club's financial salvation. Within seconds of taking possession of the cheque from property partners Bluestone Capital, Irvine handed it to St George Bank, ending one of the most traumatic chapters in Cronulla's history after the club's debt had hovered between $10m-$15m. ''It's a full stop in terms of that financial instability,'' he said.

''This allows all energies to be spent on core business, as opposed to [staying afloat]. It's the culmination of a three-year strategy where we had to solve numerous problems in the club - predominantly financial - which tended to lead to numerous problems. This is the settlement of all of that, to have the finalisation, the stamp on the bit of paper which sees the actual crystallisation of the value in that land come into the banks accounts and coffers. It's turning basically a land asset the club has had for 40 years into tangible income and cash flow which is a great result for the club.''

Irvine said there were many times when the board's collective mettle was tested whenever the bank questioned their ability to settle their account. ''We said they were going to have to give us a little bit of time, you're going to have to let us go to a state level, we had to get a partner on board and have them spend all the money,'' he said. ''The approval [for the development] in August was the finalisation of that. It would've been very easy to throw the towel in and say, 'It's all too hard' and given the problem to St George [bank] who would've then said, 'We're closing you down or moving you'.

''It was scary. You look back and think, 'How did we get through that period' but at the time you just do. How close? Well at [any] time the bank could have said we believe in you but not that much, we're not going to risk $15 million worth of belief.''

Irvine said the Sharks would maintain the disciplined approach they'd been forced to adopt to stay afloat. He added the Leagues club's remaining $3.5 million debt was serviceable and described as a genuine ''upshot'' the $800,000 a year the club paid to service the debt was now available for other use.

''We're in a wonderful position where the new money in football, which is debt-free, the new money from the television rights puts us in a very unique position in the game where that's not going to fund a grand debt or a black hole,'' he said.

''That's actually going to come on top of our budget which means we can tangibly build some numbers or resources around the football club.''

He added the cash injection meant that the years of where they may have had to undersell their sponsorship packages were over. He said it gave them a foundation to sell exclusive and unique branding. ''In the past we were just happy to have the support of organisations and give them what we could,'' he said.

Ben Fairfax, the managing director of Bluestone Property Solutions, said the Sharks would get a percentage of the revenue from the sale of residential properties as well as a share-holding of the retail, something that would provide the club with an income stream. ''We've advanced the club a proportion of that, the $10 million, and by cash-flowing that out, they'll get redistribution of other forms of revenue in the future from the residential [sales],'' he said. ''At the moment it's as though they've received the first 314 apartments' [of an expected 600] worth of revenue upfront.''

This story Salvation in $400m deal for Cronulla first appeared on Brisbane Times.