Sydney buyers close in on Newcastle Jets takeover

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The long-awaited sale of the Newcastle Jets is edging closer to reality, with a consortium of Sydney businessmen negotiating to acquire the club from absent owner Martin Lee.

The Shenzhen-based multi-millionaire has been seeking to offload the A-League club for almost two years, and chief executive Lawrie McKinna confirmed that a “term sheet”, a statement of intent from both parties, has been drawn up.

McKinna declined to divulge the agreed sale price - or the identity of the Sydney-based business identities - but it’s believed to be well in excess of the $5.5 million Lee paid for the club back in 2015.

McKinna added that prior to COVID-19, Lee - who has injected $15 million into the Jets during his tenure - rejected an offer of $12 million from one potential buyer.

“I’ve been talking to a few investors - and it’s getting close,” McKinna told The World Game.

“A term sheet (a written pre-sale agreement) has been done for one and sent to the lawyers but it’s not over the line yet.

“There’s still work to be done. This week alone I’ve had about five people contact me about buying the club.

“There are people there all the time but most of the time there’s nothing behind it.

“But there are two serious contenders (one being the Sydney group). That’s the stage we’re up to.”

McKinna, who has been previously approached by groups from Vietnam, the UK and the US, said the sale would involve a significant up front payment followed by several installments over “a period of time”.

The deal, which would need to be signed off on by FFA, has yet to be presented to the governing body for approval.

“A deposit will be paid and then there will be ongoing down payments,” added McKinna.

“Martin is looking to recoup as close as possible to the figure he’s invested in the club, and that’s around $15 million.

“He’s adamant he wants his money back, although COVID has come in and changed things a bit.

“We were offered $12 million a year ago and he knocked it back. He never even thought about it, to be honest.

“That would have saved him $2 million for this year. But it’s easy to look back and say ‘we should done this or that’.”

McKinna denied that FFA had been approached for, or had provided, emergency funding during the COVID-19 shutdown.

“We’ve not had a penny from FFA, and we haven’t asked for anything,” added McKinna.

“It’s just been business as usual. We’ve been obviously struggling because we’ve not had much money from Martin.

“But the players are paid up in full as of this week (heading into the A-League restart).

“They’ve all had their holiday pay, image rights and bonuses.”

It’s believed the club has around $2 million in operational debts to clear, with McKinna saying any shortfalls would be taken into account as part of the sale.

“We’ve got debts but we’re getting through that. We’ve cleaned a lot of stuff up with the players,” he explained.

“Obviously stadium bills mount up also. We’re in the same boat as most A-League clubs at the moment.

“We’re all struggling to make ends meet. With COVID it’s the same with most businesses. The cash flow to the club has dropped right off.

“Nobody is chasing - everybody understands the situation.”

Due to overseas currency restrictions in China, Lee has been struggling to make cash payments, according to McKinna.

“It’s been hard for him to get money out of China for sporting teams and the ideal situation for him is to move on,” he added.

Lee has curtailed his football interests over the past two years, folding his Chinese club Shenzen Ledman which played in China's second division.

His financial bottom line has been hit by the trade tariff war between the USA and China with his LED lighting company Ledman Group suffering the fallout.

Lee bought the Jets from FFA after failed mining baron Nathan Tinkler was stripped of ownership as a result of placing the Jets in voluntary administration.