Rugby League: Make or break for troubled Warriors

The Auckland Warriors this week enter another worrying chapter in their troubled history and look set to ensnare the New Zealand Rugby League with their problems.

The NZRL will decide today whether to risk virtually all of its sizeable bankroll on a shareholding deal with Tainui, a tribe racked with internal strife.

It is a knife-edge drama that could see the league lose its money, the club fold and the game in this country consigned to history.

In the background, and what may be the determining factor that decides the club sale-and-purchase issue, is a High Court hearing, starting on September 13, that will determine who runs Tainui's business. There is big pressure on members of the tribe's executive council, Tekaumarua, to withdraw rather than let the court rule on an internal tribal matter.

The Tekaumarua faction, with backing from tribal financial advisers Ferrier Hodgson, has lodged a demand for immediate payment of $6,277,252. The money was in the form of a loan from the central tribal investment arm, Tainui Group Holdings (TGH), and has been spent by the Warriors on player payments and day-to-day running costs.

The demand, signed by TGH chief financial officer Michael Crawford, states that the Warriors club "has become insolvent, is unable to pay its debts when due, and is unable to satisfy the solvency test as defined in the Companies Act," and that it is "unable to pay its debts as they become due in the ordinary course of business and/or the value of its liabilities is greater than the value of its assets."

TGH's demand insisted on payment in cash 24 hours after delivery of the document, which surprised Warriors chairman Ricky Muru. "As far as I can work it out we're suing ourselves."

Muru said there was a deal to bring in new partners. "They're ready to move in, and these people are playing silly games."

If TGH proceeds with its demand, the next step is a winding-up order for failure to pay. That would mean all players could walk because their contracts would be deemed null and void through default by the club.

There are seven players with offers to leave - off-contract Clinton Toopi from North Queensland and Canberra; off-contract Wairangi Koopu from Canterbury (this club has also inquired about re-signing hooker Robert Mears); Henry Perenara, who is wanted at the Storm and wants to go; and Stacey Jones, Joe Vagana and Logan Swann, who are being eyed by several clubs waiting to pick them up if things go into a tailspin at Ericsson.

The TGH manoeuvre appears to be a ploy to unsettle and shake out one-third shareholders Graham Lowe and Malcolm Boyle, who say that they have not been served with the document.

But it opens the club to all sorts of undesirable repercussions.

The demand letter gives the National Rugby League a clear right to withdraw the Warriors' seven-year franchise, given that one of its major demands is financial solubility and stability. It is not hard to see an NRL, under pressure to readmit the South Sydney club, making a quick kill of the Warriors.

Every Warriors' sponsor has an out-clause if ownership changes. And the Auckland Rugby League could take control under a clause in the sale to Tainui that guaranteed it $250,000 a year in development funds.

The ARL is still owed $1.5 million from the sale, due on time-payment over the next three years.

If the NZRL board decides today to buy the Warriors, it will cost nearly everything the league has in the bank, with budgetary expectation of $3 million more next season. Chairman Gerald Ryan said the league would seek a partner to take up to a 90 per cent shareholding if backers could not be secured immediately.

Should tribal leader Sir Robert Mahuta regain control, all deals done through Ferrier Hodgson might be turned around.