posted this 3hrs ago and still hasnt been published, The Penns and the sword April 18, 2009 http://www.smh.com.au/news/lhqnews/m...475061062.html A deal to save Manly Leagues Club from the bank has pitted the club's saviours against each other, and may come at a very high price, writes Roy Masters. A letter from Manly Leagues Club's banker will be tabled at a meeting of members on Tuesday night, potentially signing the death warrant for one of rugby league's most successful teams, according to forces lined up against the likely new owners, the Penn family. The uneasy relationship between the co-owners of the Manly NRL team, the Delmege and Penn families, is set to erupt when about 100 leagues club members vote on a motion to effectively sell Penn the Pittwater Road leagues club site and the adjacent car park for $15 million. If the sale proceeds, the Sea Eagles will inevitably disappear and the a 13,000-square-metre site will be demolished to create prime real estate, says developer Phil Franks, who has joined forces with Max Delmege following the settlement of an action Franks had against the club. The Penn family insists the sale would be a first step in a grand plan to redevelop the club and reconfigure Brookvale Oval, making it a showpiece stadium with revenue streams that would secure the long-term future of the club. Manly members will be asked to vote on two proposals, which are a cut-price version of the original $15m development plan put forward by Penn and Delmege before their split last November. "The bank has made it very clear this is the only deal which can save the club," said a spokesman for the Penn family with reference to a $10m debt owed to National Australia Bank by the leagues club. But Delmege countered: "What really is happening is that something is being put to members that's being forced on the club by the bankers. The Penns have obviously been talking to the bank and told them they can settle and give them their money back." The Penn family has proposed to buy the club and site for $7.5m and take a five-year option to purchase the adjacent car park for a further $7.5m. What is not in dispute is that the Penn offer is less than that which members approved in July when they were presented with the Penn-Delmege deal. "The market has changed significantly since then," the Penn spokesman said. But Delmege, in a phone call to Manly Leagues Club secretary manager Peter Spray, has protested that the Penn deal short-changes members. Delmege told the Herald: "The leagues club owes the bank 65 per cent of the value of the property, which is above the norm for a loan in this market. Ultimately, I say to the bank, 'Don't put pressure on the club and force a deal on us'. "Let us refinance in the ordinary fashion. Maybe the bank don't like Manly. They're on the jumper of South Sydney, anyway." Tuesday's agenda proposes that the club leases back the premises from Penn for an annual rental of $540,000, increasing by 4 per cent a year, plus a rental of $300,000 a year for the car park, also increasing by 4 per cent a year, should he take up the option to buy it. Furthermore, Penn will loan the club $3.5m, secured by a mortgage over the car park, repayable over five years at 8.5 per cent. Of the $7.5m purchase price for the leagues club, Penn will initially advance $5.6m, which, combined with the $3.5m loan, will allow the club to settle the bank's $10m debt. Penn will also provide a loan to the maximum of $2.1m for refurbishment of the club's licensed premises. Delmege said: "The leagues club can retain all existing property at a cost of $600,000 a year in interest. If this deal goes through, the club will be paying $1.1m in rentals and they end up with no property. "I'm not against the Penns buying the leagues club premises, but not the land and the car park. If we can retain this land, we can eventually build a club for the future. But we are being asked to outlay an extra $600,000 a year from day one and have no assets and no capital growth." Franks argues the 8000-square-metre car park could be worth $25m in 2014, and its value could even treble when combined with the 5000-square-metre leagues club site, although a July valuation prices them at $15.225m. Franks said: "That total land package is worth twice as much without the club being there. A million people would give $10m for a five-year option on the car park and even be willing to pay 10 per cent deposit." But, according to the Penn family, no one else has. "Anyone can come forward and make an offer, but no one has," the spokesman said. "Are we going to let it all sit there for another five years?" But past loyalties and alliances - not financial sense - will determine the outcome of Tuesday night's meeting, at which 75 per cent of members must approve the Penn motion for it to succeed. The Sea Eagles have been riven with factions for nearly 20 years, ruled by a board of directors playing musical chairs. It is D-day for a club at which 60 years of existence could be decided by fewer than 60 members. The Penn family believes the leagues club sale is a first step in a "master plan" to redevelop Brookvale Oval, with local and state money already guaranteed and federal funding anticipated, all leading to a united, football-savvy board running an NRL team that would remain forever in the district. The Delmege-Franks faction claim this vision is a mirage that can be scythed through at a financial night of the long knives. Franks, who presented a cheque for $1m for Manly's reinstatement to the NRL after the dissolution of the Northern Eagles in 2002, has already unleashed a verbal sword. "I'm fuming - it's the end of the club because of self-interest," Franks said - although the agenda papers clearly state one of the directors of Penn Sport P/L is the brother of the wife of current Manly director Peter Peters. "My message to the Manly board is that they will be exposed at the end of the day. My challenge to the Manly board is to cross the floor and do the right thing or pay the penalty." It remains to be seen if the Penn is mightier than Tuesday's sword.