Hunter Sports Group questions Newcastle Jets acquisition fee

While Gold Coast United owner Clive Palmer has been making headlines in the A-League, a series of issues have arisen in relation Nathan Tinkler's acquisition of the Newcastle Jets in September 2010.

In the last week it has emerged that Football Federation Australia (FFA) charged Tinkler's Hunter Sports Group (HSG), then known as the Tinkler Sports Group, an apparently arbitary $5 million takeover fee when acquiring the Jets.

HSG Chief Executive Troy Palmer has highlighted that the fee was paid in good faith having been told it was a sum common to all clubs and having been allegedly told by the FFA that the Jets would fold unless he bought the club immediately.

Troy Palmer claims FFA insisted that it could not afford to run the Jets and, with former owner Con Constantine having run out of money, the club would go under without an immediate takeover.

In that time frame, and with Constantine offering no financial records, the Jets argue it was impossible to perform full due diligence.

Troy Palmer also claims he was told that the Jets were seen as expendable by FFA as its Fox Sports TV contract specifies only a team in every major city, and that FFA refused a request from him in December to detail what the owners of each club had been charged.

Quoted in the Newcastle Herald newspaper, Troy Palmer stated "when we were approached by the FFA to take over the licence of the Jets we were advised the acquisition fee was standard.

"They confirmed they could not continue to fund another club and if we didn't acquire the Jets the club would fold.

"The transaction was done very quickly to ensure that the 50,000 kids playing football in Northern NSW would not be left without a team in the national competition for the fourth time."

It has subsequently been revealed that only the Jets and Brisbane paid a substantial acquisition fee, with other new owners charged only a licence fee.

The matter is embarrassing for the FFA governing body in the light of the millions Tinkler has spent since on lowering ticket prices and engaging the Newcastle/Hunter community.

It has also been claimed that former HSG Executive Chairman Ken Edwards was paid a six-figure sum to facilitate the sale of the Newcastle Jets to Nathan Tinkler.

Edwards was employed as a consultant for FFA when Tinkler was approached by the governing body to take over the Jets.

The Newcastle Herald has written that "Edwards was paid a substantial commission on the sale. According to sources, the Jets were unaware of Edwards's commercial arrangements with FFA."

However, A-League Head Lyall Gorman has insisted that the Jets knew of the relationship between Edwards and the FFA, stating "Ken Edwards was a consultant to FFA with the task of identifying investors in football.

"HSG knew he was working for FFA and knew he would be remunerated for his work in the normal course of business."

Once the ownership transfer was complete, Edwards was employed as the HSG Executive Chairman and was the architect of the subsequent takeover of the Knights.

Edwards has recently left HSG, with a statement saying he had resigned to spend more time with his Sydney-based family.