Rabbitohs consider Packers-like shareholding
South Sydney officials have been considering an ownership model for life after Russell Crowe similar to that of American football's Green Bay Packers, in which fans would be able to buy shares in the club.
Rabbitohs chairman Nick Pappas and chief executive Shane Richardson yesterday confirmed that the Oscar-winning actor had advised them six weeks ago he intended to sell his 37.5 per cent stake at the end of next season and said it was up to him to find a buyer.
However, Souths members have the first option on Crowe's shareholding and that of his business partner Peter Holmes a Court, who is yet to decide whether he wants to remain involved.
The value of the 75 per cent stake is difficult to ascertain as Crowe and Holmes a Court paid $3 million in 2006 at a time when the Rabbitohs were struggling to pay their players. The club is now predicting a $1 million profit in next year.
However, Souths also carry debts of $6 million on their books from loans given to the club by Crowe and Holmes a Court to cover losses incurred between 2006 and 2008.
Repayment of those loans has been deferred to 2024 and the Rabbitohs do not pay any interest until 2014.
A source close to Crowe and Holmes a Court said that while the club was now much more valuable than when they bought in, that was unlikely to be a significant factor in determining the sale price.
It has also been suggested that Crowe's preference would be to sell the club back to its members as he is a life-long Rabbitohs fans who only became involved to keep Souths alive and not for financial gain.
But even if the 75 per cent shareholding was offered for the initial price of $3 million to the members, who control the company that owns the other 25 per cent stake, it is unclear how they would afford it.
One option being considered by the club is selling shares to members, as the Green Bay Packers have successfully done to their NFL fans for the past 15 years.
While the Rabbitohs would be unlikely to find enough supporters willing to buy 250,000 shares at $250 each, as the Packers currently have, they could create a premium membership that offers members the opportunity to buy a stake.
'There are models around the world where you have member participation at a higher level than just traditional membership for those who want to do it,'' Pappas said.
''The other members still retain their existing rights, it is just that some members have a proprietary interest in the club.''
Pappas explained that Crowe's decision did not mean anyone could buy the Rabbitohs.
''The club is not up for sale, but Russell has indicated it's his intention to dispose of his interest,'' Pappas said. ''The members would have the right to veto any move.''
Crowe also rejected any concerns over the future by tweeting: ''South Sydney FC in a great place. Money in the bank, long term contracts with star players, excellent coach. Don't listen to panic merchants.''
''The club is very strong,'' Holmes a Court said. ''Russell and I haven't put any money in since 2008, it operates at a profit and membership is selling faster than ever before. Fans know what the future is''.
Despite the weekend announcement of Crowe's withdrawal, Souths sold 255 memberships on Monday.
Sydney Morning Herald