Review of the Registered Clubs Industry in NSW - Clubs NSW

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11 Making it easier for clubs to amalgamate Another possibility is to see amalgamation as a strategic move that can preserve a club’s identity and thus long-term viability through amalgamation with a larger, stronger club. For the parent club in this situation, amalgamation can bring expansion opportunities, a greater range of facilities (such as bowling greens and golf courses) to offer members and a degree of ’brand-building‘. This approach is perhaps exemplified by the Penrith Rugby League Club’s strategy of expansion by amalgamation, which it embarked on during the 1990s. 198 Penrith Rugby League Club (now Panthers Entertainment Group) was the first club to engage in amalgamations with clubs well outside its own geographic area. Government views on the role of amalgamation seem to have changed in recent years. For example, in 2001, provisions placing restrictions on amalgamations were included in the Registered Clubs Act. 199 These provisions: limited the number of amalgamations per club to four required clubs to first seek to amalgamate with clubs in the same area, then with others with the same objects if none in the same area were willing to amalgamate prevented a parent club from disposing of the dissolved club’s assets for three years after amalgamation. IPART understands that these amendments arose from concerns that amalgamation with geographically dispersed clubs was contrary to the community-based, local nature of clubs and that amalgamation could potentially be used as a strategy to strip assets (by transferring gaming machine entitlements and selling property from the dissolved clubs). However, these restrictions were relaxed by the Registered Clubs Amendment Act 2006, on the basis that amalgamations are often a positive step to preserve community assets held by smaller clubs, and that larger, more profitable clubs that might be in a position to help smaller clubs were prevented from doing so by the existing restrictions. 200 Based on its consultations, IPART found that where a club cannot achieve financial viability, no matter how good its financial management is, amalgamation can provide a better alternative to closure, in that it can protect and preserve the club’s assets and their benefits to the community. In particular, IPART found that amalgamation can be of benefit to the community in areas where several clubs are struggling financially, and areas that are over-serviced by clubs. 198 Department of Gaming and Racing, Inquiry in relation to Penrith Rugby League Club Ltd, December 2004, p 10. 199 Via the Gaming Machines Act. 200 Registered Clubs Amendment Bill, second reading speech, Mr Grant McBride, 14 November 2006. 178 IPART Review of the Registered Clubs Industry in NSW
11 Making it easier for clubs to amalgamate Areas where clubs are struggling financially In areas where clubs are struggling, financial viability can often be achieved by amalgamating two or more clubs, as it offers cost efficiencies through pooling of resources and back office, better use of assets, and stronger purchasing power with suppliers. This scenario often occurs in non-metropolitan areas, where the facilities and services clubs provide are important because alternative providers are scarce, yet where the population density may not be sufficient to support several clubs. For example, stakeholders at the first Sydney roundtable 201 noted that in Sale, Victoria, four clubs consolidated into one club (with one premises) to ensure the continued availability of the clubs and their sporting facilities to the community. Areas over-serviced by clubs As ClubsNSW identified, some areas have too many clubs providing similar services. 202 A strategic amalgamation by these clubs would improve their financial viability, as the merger would allow the clubs to rationalise and make better use of the assets they hold collectively. This may occur in rural areas where there are too many clubs given the population, or in metropolitan areas where a demographic shift has changed the demand for services. (For example, stakeholders often identified that bowling clubs fall into the latter group, as demographic changes have led to a declining number of bowlers.) In this scenario, IPART considers that clubs should view the option of amalgamating with another club or clubs as a solution that will allow the unique (as opposed to generic) assets of each club to be preserved. These more strategic amalgamations might benefit from a model that is more along the lines of a partnership or merger, rather than the current parent club-other club model. The identity of both clubs could be preserved while savings in costs are made. The Panthers amalgamation model is an example of this kind of partnership model (see Box 11.1). Ultimately, it should be the individual club’s members and directors who decide whether to amalgamate or not. However, in making this decision, some clubs may need assistance and advice about how to make this assessment, especially if the decision not to amalgamate may result in closure of the club. 201 Sydney roundtable, 27 August 2007, p 51. 202 Sydney roundtable, 27 August 2007, p 46. Review of the Registered Clubs Industry in NSW IPART 179
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Independent Pricing and Regulatory
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© Independent Pricing and Regulato
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Contents 6 Strengthening the financ
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Executive Summary Executive Summary
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Executive Summary estimated the val
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Executive Summary Therefore, IPART
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Executive Summary However, IPART al
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Executive Summary List of Recommend
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Executive Summary 15 Once the stand
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Executive Summary 29 That ClubsNSW
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Executive Summary 46 That ClubsNSW
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Executive Summary 60 That OLGR deve
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1 Introduction 1 Introduction Over
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1 Introduction 1.1.2 Review’s foc
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1 Introduction 1.2 Other reviews an
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1 Introduction 1.3 The structure of
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2 The registered clubs industry in
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3 Understanding the social contribu
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4 Measuring and reporting on club c
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5 Refining the Community Developmen
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6 Strengthening the financial viabi
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7 Improving clubs’ financial repo
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Page 135 and 136: 8 Establishing a Club Viability Pan
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Page 173 and 174: 10 Helping clubs better understand
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Page 229 and 230: A Terms of reference A Terms of ref
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C List of submitters, roundtable pa
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C List of submitters, roundtable pa
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D Gambling expenditure and problem
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E IPART’s methodology for recordi
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F ACG’s approach to measuring the
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G ClubsNSW - steps to establishing
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Glossary and Abbreviations Glossary
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Review of the Registered Clubs Industry in NSW - Clubs NSW

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