No ball of fun

Nathan Tinkler is a man who is not afraid of some risk.

At the tender of age of 30, he raised about $30 million to buy a slice of coal-rich dirt, which he eventually sold for about $300 million. He has also poured an estimated $200 million into one of the most risky sectors of all – thoroughbred horse racing.

Yet even Tinkler was reluctant about sinking cash into his latest venture – Australian A-League soccer club, the Newcastle Jets.

Tinkler emerged as the holder of the Jets’ license yesterday after the club’s previous owner, Con Constantine, hit financial troubles and was unable to continue to fund the club.

But he’s hardly embracing the whole “soccer team owner” thing, which has become very popular among Middle Eastern billionaires who have queued up to buy soccer teams in the last few years.

”I have no desire to own a football club, ” he said in a statement yesterday, before going on to say the he wants to “provide a nursery for the development of the game for the thousands of young football players in the Hunter region.”

Tinkler’s hesitancy about club ownership is understandable. Owning a sporting club is a certainly not the fast lane to huge wealth, as many of the A-League’s owners are finding out.

Last year, Adelaide businessman Nick Bianco handed the license for local club Adelaide United back to the Football Federation of Australia. While in recent days, speculation has grown that billionaire Clive Palmer is getting close to walking away from his club, Gold Coast United.

Owners of the league’s biggest clubs, including Perth Glory, Melbourne Victory and Sydney United, are also said to be angry with how the league is being run.

The problem that Tinkler is about to learn about is that sporting teams are money pits. To ensure financial success, clubs really have to be successful on the field. To ensure on field success, you need to buy the best players, and pay them accordingly.

But that creates a rock-and-a-hard-place scenario. Don’t spend enough money on players, your results drop off and your crowd falls. But if you do spend the money on players, profit margins are such that a few poor crowds can still hurt you.

Tinkler has promised to keep the club going for at least this season, and probably beyond. He’ll need deep pockets, and plenty of patience.