Australian football on Tuesday refused billionaire Nathan Tinkler's bid to dump his licence for the Newcastle Jets, setting the stage for a bitter standoff in the troubled A-League.
Coal tycoon Tinkler's Hunter Sports Group (HSG) said it would turn in its licence and not field a Jets side in the 2012/13 season due to an "irrevocable breakdown in confidence" in Football Federation Australia (FFA).
HSG said it was walking away from the club "effective immediately" Tuesday, citing irreconcilable differences with FFA management over finances and other issues.
Tinkler, Australia's youngest billionaire at 36, came to the Jets' rescue less than 18 months ago, salvaging the team after it ran out of money to pay players and stadium fees.
But the FFA said it "does not accept that the Newcastle Jets have the right to return their A-League licence" and it expected the Jets to honour its playing contract "which is for a term expiring on 30 June 2020".
"FFA has held countless hours of discussions with HSG on a wide range of issues affecting the club and the A-League," said the footballing body's chief Ben Buckley.
"None of this provides a justification for today's announcement by HSG or provides any grounds for the Newcastle Jets to relinquish their licence," he added.
HSG chief executive Troy Palmer said the group had "lost confidence in the FFA management", with relations becoming so untenable it had "no other option" than to pull the plug on the club.
Key to the breakdown was a dispute over the Aus$5 million (US$5.2 million) fee that HSG paid to acquire the Jets licence in 2010, which the company saw as too high.
Palmer said HSG had asked the FFA to outline what other clubs had paid for their licence, "if anything", why the fees varied, how much of a commission was paid to the FFA's agents and how that money was used.
"Having rejected our terms on every occasion, we had no confidence a consistent and rational explanation for the fee would be forthcoming, particularly after inflammatory media comments from the FFA," he said.
Concerns about the A-League's "unsustainable financial model" were highlighted by FFA forecasts of combined club losses of $27 million for the 2012 financial year and similar projections for the following year, he added.
Buckley said the league structure issues were "addressed just a fortnight ago when all clubs were shown a road map towards sustainability" and FFA had committed to clubs having a greater say in the competition's operation.
"FFA chairman Frank Lowy and I have made numerous offers to meet in person with Nathan Tinkler. Just two weeks ago a scheduled meeting was cancelled by HSG at short notice," he added.
The development piles on the woes for the troubled A-League, which has struggled to attract crowds and laboured under financial issues.
Gold Coast United were kicked out of the 10-team competition in February after the FFA had a furious row with the club's owner, billionaire mining magnate Clive Palmer.
The FFA last week announced that a new A-league team would be created in western Sydney, seemingly sounding the death knell for the Gold Coast franchise.