Apparently the ongoing saga regarding the NZRL 25% share in the Warriors is over with an agreement reached which will see the NZRL sell its stake to Warriors League Limited (formerly Cullen Investments). Eric is now 100% owner.
In the same vein - cheers to James "judgement day" Dellow for sending me a scan of a great article from the independent written by Trevor McKewen with an axe to grind about Watson's record as owner of the Warriors. (NB: Trev was fired as CEO of the Warriors after the Watson takeover). One of the key points made was that the NZRL did not think it was getting adequate "management expertise" value from Watson that had led it to facilitate the sale to Watson in the first place and did not want to be called upon to inject further capital. Accordingly Trev described how the NZRL were in dispute with Watson over adequate compensation and terms for the sale of their shares. Sorry can't link to the article as it is pay per view.
Another juicy tidbit from Trev is that the NZRL had refused to sign off on the Warriors 2002 accounts because they beleived they misrepresent what was in theory the Warriors most profitable season ever. Apparently most of the profit was used up in payment of very large "management fees" to Cullen.
I would not beleive everything he says because of his obvious bias but Trev's best point in the above article, not a new one incidentally, was that the NRL basically conspired to give the Warriors to Eric amost for free. He paid $375,000 for the license only - the original Warriors folded and then he re-signed all the players to his "new" Warriors club without taking on any of the old club's debt. Contrast this with the recent purchase by Russell Crowe of Souths where he paid $3.75m for a 75% stake in the club. Thats ten times more kids - for what in theory is an asset of comparitively similar value?
I am not sure we should be berating Watson for being so clever as to have an NRL franchise essentially given to him on a silver platter. What is an issue is whether Watson has the stomach for owning a "business" that is at best has a low margin of profitability and at worst bleeds cash. What will become of the Warriors if Eric decides he has enough of pumping in cash and the Warriors end up again in massive debt and spiralling into receivership. Who will come riding to the rescue. Regardless of who owns them if the Warriors don't win they are not a good investment. Sports franchises (with the exception of NBA teams) rarely are good money makers. Accordingly the owner needs to be willing to suck up monetary losses for the benefit of non-monetary rewards such as status, prestige and excitement.
Does Eric have the patience for this? Time will tell.
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