Monday 6 April 2009

Cairns Council throws Taipans a life line

In a controversial decision, today the Cairns Regional Council has delivered a lifeline to the Cairns Taipans.

"What we were presented with was either giving a lifeline or the death knell to our only national league sporting team," Mayor Val Schier told CairnsBlog this morning. "What kind of signal it would send out if we did not support them, would have been awful. Confidence is already low in the business community around town."

At a special closed session of the full Council this morning, the motion was passed to approve Cairns Regional Council providing a $1 million bank guarantee for the next three years, for the city's national basketball team.

For the Taipans to be accepted into the new elite men's national basketball league, a minimum of $500,000 working capital is required, along with an unconditional bank guarantee of $1 million to ensure that the team could play out the full season, regardless of unforeseen financial instability.

"It's not our plan to ever call that guarantee in, however it now allows us to inform the NBL that we're back in business and have ticked all the boxes," Taipans president Denis Donaghy said this afternoon.

The majority of Council believe that the Taipans will benefit Cairns by promoting and contributing to economic development, attracting commerce, industry and tourism.

Councillors Julia Leu and Robert Pyne both voted against the motion.

"I simply couldn't put ratepayers money at risk," Cr Robert Pyne says. "However, we now need to get behind them, but I don't think that ratepayers money should be used in this way, should it ever be needed."

Cr Julia Leu was stronger in her opposition. "I believe such a decision goes against Council's policy to allow public funds to be used in this way," Leu said. "Whilst I'm supportive of this team, I cannot support such a risk like this."

Two Cairns Councillors, yet to be named, will join the Taipans Board of Directors, to oversee management of the club. They will seek assurances that the business is being managed and report back to Council's Finance and Administration Committee.

In defending the decision Mayor Schier says that the Townsville Council provide a similar arrangement to the Townsville Crocodiles. "So this isn't an unusual proposition. there is also an over-whelming community support for the Taipans, that was demonstrated through $760,000 in public pledges recently."

The ten professional Taipans' players, along with two trainees, can earn as much as $100,000 each, including vehicle and superannuation. The National Basketball League has introduced new policing of salary capping. This will allow no more than $1.2 million to be spent on the total team salary. However, the Cairns Taipans have no intention of spending that amount, president Denis Donaghy says. "It's not in our budget to pay that much."

31-year-old Arron Grabau, who has been with the team since 1999, was delighted with Council's backing. "It is good to have the support of the community like this," he said.

Denis Donaghy said that the team would has closed down today, if Council did not agree to the $1 million bank guarantee. "There is no doubt we would have been finished and been unable to enter the NBL if we couldn't have this support."

The business case presented to Council assured that the business would be made profitable and highlighted areas of reducing expenditure in ticketing, merchandising, player payments and also staff.

Donaghy also squashed rumours about the club having it's own private jet. "One of our sponsors has been regional airline Skytrans, and we use them to fly the team to Townsville for any games," he said.

The Queensland State government were also approached to financial back the stricken club, but have failed to come to the table. "You'll have to ask them why," Denis Donaghy says.

The Taipans had until this evening to advise the NBL if that had completed a number of requirements, including their the financial security, to play in the league.

On ABC Far North this morning, one caller questioned the proposed announcement. "The speedway on the South of Cairns has never received any financial support, so why the Taipans should receive special treatment is odd."

A recent TV media survey showed that there was more people watching re-runs of 1960's Gilligan's Island than following the NBL.


Steven Nowakowski said...

This is a terrible decision by Council. How dare the Council gample with my rates to back a sports team. If that bank guarantee is called in and is needed to bail out the club again you can imagine the uproar. The Cairns Regional Council's charter is to run a functioning and viable council. I didn't think Regional Councils were in the business of backing marginal and hardly viable sports teams.?

Councia said...

Agreed, Steven. Claiming on one hand "overwhelming community support", while admitting they can't scrape together a measly million dollars is highly contradictory. These sporting teams are a "rich man's toy". Why have all the "rich men" in the community failed to back this venture?

Because it can't, and won't, make any money. Who are the "experts" running it now? Not basketball professionals. With the pros running it, it was bleeding cash. Now they expect a cash-strapped populace to continue to buy tickets in support of a bunch of losers?

Not bloody likely. This is a fortuitous decision by Mayor Val, guaranteed to bite her in the ass and provide fodder for the opposition at the next election. Nonsense like this routinely takes governments down. Mark my words.

Tuna Tower Tony said...

This is a terrible move by council I agree with the posters above - the Taipans have been losing money since inception. Who in their right mind puts money into a money-loser as the economy goes into the tank?

Val, are you crazy? How about fixing the footpaths in the CBD?

Jude Johnston said...

Correct me if I am wrong, but wasn't the Taipans a "business venture that went broke". How many other "business ventures" in Cairns have also gone broke. How many of these have put forward a Business Plan to be bailed out by Council. Maybe Storm Financial can put a Business Plan to Council for a guarantee so it can continue to trade. The Community were also passionate about the Yacht Club Building, no guarantee for us.
Can we have a sweepstake as to who the 2 Councillors are going to be on the Board of Directors - my pick, Alan Blake and Linda Cooper.
Just an aside, will the Councillors who voted for this, put their hands in their pockets if the guarantee is called in.

T. Asquith said...

Unbelievable! How easy it is to be altruistic with other peoples money.

Noj Nedlaw said...

Government support for sport is an accepted part of the Australian psyche. Whether it be $1.5M that the Rudd government gave the Australian Equestrian Federation in their lead up to the Beijing Olympics or the $200K given last year by the NT Government to conduct a feasibility study into – wait for it – Darwin competing in the Australian Basketball Association competition; we seem to be obsessed with seeing home town teams make it big time. Now Andrew Demetriou has stated Tasmania is the "next port of call" to house an AFL team.

State government support is alive and well – and kind of expected by the vast number of Australians.

But local government with a role in all of this? I think not.

Given that we still seem to have a little problem of dengue, I would have thought the CRC efforts should remain focussed firmly on fixing falling confidence in the public health system.

But then, and I am showing my age, Mickey Rooney and Judy Garland’s answer to all of life little problems was to put on a show! So perhaps the erstwhile CRC councillors hope that the razzle and dazzle of a revamped Taipans will cause us to forget all our other worries and cares for a few minutes as the lanky yanks and august Aussies strut their stuff!

Sorry on this one, the CRC really needed to keep its ball in its own court. Guarantees DO get called in – that is why there are there in the first place. And if, in these harsh economic times it all does go pear shaped, muggins in the form of Joe and Don Ratepayer will be left to pick up the pieces with increased rates, increased parking charges, and a lower level of CRC services their legacy for quite a while to come.

Mandy Johnson said...

I cannot believe this bloody lot at the Cairns Regional Council at present!!

What the hell happened to the private businessmen who backed the Taipans just last year? They aren't rejoicing. This council cannot service the city and surrounding districts it is supposed to be looking after now let alone backing this mob for one million dollars.

My god, the Taipans chairman or whatever he is called must be the same persuasion as most of the council members.

Where is this money coming from? I am glad I am not a Cairns rate payer - you are all going to lose. What about the roads and rubbish?

NO money for cyclone preparation pickups once a year like previously. I could go on and on. Poor Cairns - what a lot you have running your ship now.

Serves you right in one way - you get what you voted for. However, the ones who didn't vote for them don't deserve this treatment.

Moby Dick said...

Oh and lets not forget that other successful Cairns Council backed venture, the sailing vessel, the "Dufyken." It has either sailed off into the great blue yonder or is lying at the bottom of the ocean by now, along with ratepayers money - all $300,000!!

Finacilly backing the Taipans, is not CORE business for this Council. Their job is to run this City and to look after the interests of all residents.!

They can start by getting the $700,000 that is owed by the developer of False Cape project, and take some of the burden off ratepayers!!

Do the job we are paying you to do and that we expect you to do!

Realist said...

The Council puts money into a team that has 1 local player and is no hope of ever making a profit. Good business decision with OUR money!!!

The 2 councillors that voted against the motion are the only ones who have any sense.

This whole Taipans community model reeks of misinformation and a charity grab. I thought this was a sporting organisation not a CHARITY!

What about the countless other sporting organisations in the region that are doing it tough? I guess there will be a lot more putting there hands out now that a precedent has been set.

This decision disgusts me and shows how incompetent our council really is. I can't wait for election time.

Sammy J, Holloways said...

Goodbye Val and Goodbye to all the idiots who think a Council sport bankroll a sportsteam.

Pyne and Leu are the only ones who have the balls (sorry Julia!) to stand up (sorry Robert!) for the real voice of the people.

Councillors like Lesina are Val's sheep and will do whatever they're told. Blake will vote only when he knows what the vote is likely to be.

So what if the Taipans went belly up. They're rather skilled at doing that themselves over the last few years and I suspect the few who follow this sport that cots around $50 a match to see - will be pleased that they've conned a Council with a "business plan"!

What a joke.

Now let's see the onslaught of every sporting and community group fire off a demand to Council for financial suppport.

Joanne Bryant, Gordonvale said...

I love the Taipans - not when the loose! but i have to say it's crazy for a Council to be doing this.

What next? Shares in Wendy's Ice Cream?

Cairns Resident said...

This Council operates in an ad-hoc manner due to poor leadership,with some Councillors only wanting to feather their nest.

Val unfortunately is not up to the job in hand,it would be benificial to all if she resigned as Mayor and let someone like Rob.Pyne take over the reins.For the Council to allow ratepayers funds to be used to assist a sporting club,is nothing short of stupidity,and will lead to many problems in the future.

Council should have obtained expert legal advice before taking this action.Alan Blake will be licking his chops seeing his chance to oust Val.

Clinton, Edmonton said...

What you mean? Snakey Blake supported this vote - like the Mayor!

Anonymous said...

Cairns Regional Council Backing the Piepans and Risking Ratepayers Money, a Bad Idea?
Tuesday, April 7, 2009

(Picture Left: The New Management Team of the Cairns Piepans)

We are in financial hard times and raising unemployment rates here in Cairns, but do we have enough money to back the financially unfit Piepans basketball club to the tune of $1 Million guarantee? This is the same club less the CEO Denis Keeffe and the owner who is now bankrupt,. Together they had managed to run up debts that exceeded more than $6 Million. And has paid none of the local business that had extended credit to the old Piepans.

What guarantees do we the ratepayer have that this new ownership group will not run up uncontrollable debts in the future? None, yes the Cairns Regional Council (CRC) will have two councillors on the board of the new Piepans to check expenses. But will the CRC councillors have the time and wherewith all to check the groups expenditures? My guess is that this a foolish investment nee guarantee that we the ratepayers cannot afford. The team itself has only $500,000 of operating capital if all the pledges pay up. If we the ratepayers have a 2/3 financial interest in the Piepans, then should we not have 2/3 of the board seats rather than just two? And apparently the new salary cap for the NBL is $1.2 Million, inclusive of cars and super.

I support the financially responsible stand that Crs. Rob Pyne and Julia Leu took in opposition to the guarantee. They have had least had respect for ratepayers money as the others took the popular position with no concern for the finances! This is a very high risk investment and will be heading for a similar end like the old Piepans.

And that's The Northern Truth!!

KitchenSlut said...

We should note here that one of the reasons given was that 'Townsville did it too'?

Yes they did, however a quick google shows that the Townsville Crocs have always been a more viable and better managed outfit. But are we still immature enough to use the rivalry with Townsville as an excuse for a policy response?

Townsville also did it back in February with time to think and NOT at a last ditch 'gun to the head' closed session meeting just a few hours before a deadline! This aspect in particular is what should be setting off warning bells and questioning confidence in Council?

As someone not naturally inclined to the Val political sphere but who has regardless been patiently supportive (and pleased to be rid of the KB scourge) i'm now fast losing patience .....

Youngdan said...

Well the Council did not receive one positive comment on this business venture.

I do wonder why many of the RATE payers are making negitive comments and yet they freely agree to have the Cairns Regional Council provide their MANAGEMENT SERVICES ( faux rates) to them every twelve months and then they receive their RATES NOTICE and they run straight back in to Val and he regime and pay in advance for another twelve months and appear to enjoy the PRIVILEGE of paying the "rates" MANAGEMENT SERVICE FEE that the Council levies on their land.

These same people then keep their name on the electoral roll and take part in the election of the Board of Directors in this BODY CORPORATE. a BUSINESS with an ABN registration with the Australian Government ubder Commonwealth POLICY.

The so called RATES are not compulsory and the sooner the sheeple in this city realise that the sooner the local body corporate will smarten up their act.

Merv said...

Council still not doing enough to encourage participation in sport.
Buchan Street football field a great example of woeful inaction and non utilisation of a precious recreational resource.
This ground lays dormant and locked up while kids in Rugby League struggle for somewhere to play each week.