Middletons partner David Morris and senior associate Adrian Smith acted for Peter Holmes à Court and Russell Crowe on their successful bid to acquire a 75 per cent interest in the South Sydney District Rugby League Football Club. Rodney Stone of Baker & McKenzie acted for the Club.
The bid was a highly emotive move, and has pitted the pair against Souths Leagues Club chairman George Piggins, who has strongly opposed their role as majority owners. Piggins and Crowe both played key roles in having the team reinstated to the National Rugby League in 2001.
Holmes à Court and Crowe formally took control of the Club last Wednesday. Their proposal had been approved by Club members at a special meeting at Telstra Stadium in March, at which 75.8 per cent of members present voted in favour of the privatisation. Morris said a significant proportion of the membership base was present, and a number proxy votes were also received.
The pair is now supporting a ticket to challenge Piggins in his role of Chairman at the Club’s AGM, and is also looking to gain control of the Leagues Club in Redfern, with a $10 million bid. However, the saga is continuing with Piggins announcing earlier this month that international investment company Jad Montii Group is also interested in the Club. Media reports last week indicated that this prompted a pledge from Crowe and Holmes à Court to build their own club if they cannot get their hands on the current organisation.
Despite the ongoing dramas and divisions, Morris said the 75.8 per cent approval from members, for their $3 million bid, was an amazing result. “Everyone knows that trying to obtain 75 per cent approval of anything in a corporate environment is extremely difficult, let alone one with as much sentiment attached to it as this proposal.
He said members recognised the offer as “a genuine attempt to help the most successful club in the history of Australian rugby league to once more become a competitive force in the NRL competition, without sacrificing in the process any of the fundamental heritage elements of the Club”.
Morris and Smith are still acting for Crowe and Holmes à Court on all aspects of the football team, and assisting where needed in relation to the Leagues Club issue. Morris said the matter presented several challenges, including the complexity of dealing with a company limited by guarantee, and the unique issues involved in privatising a rugby league club.
Those include ensuring that the heritage aspects of the club won’t be compromised by the privatisation, and that control is maintained by the Club members in terms of its colours and emblem. There were also provisions restricting where the Club could play its games, to either Telstra Stadium or in the South Sydney district.
Dealing with one of the NRL’s most high profile clubs and two of the most high profile Australians meant there was a consistent media frenzy in relation to the matter. “Everything we did, we had to be very conscious that it was going to appear in the papers the next day,” Morris said.
“Also, there were a number of competing elements out there who didn’t want the proposal to go ahead. There was a constant threat of litigation, there were death threats received by [Holmes á Court and Crowe] and other members of the team.” Piggins also received death threats during the process.
The next move depends on the results of Club elections at the AGM, but already, the matter has continued much longer than the Manly privatisation — 10 months as opposed to five.
“Manly didn’t have any of the emotion or media publicity of this one. Members voted at abut 97 per cent in favour.”