KEY POINTS:
The FFA have set a deadline of January 31 for new owners to step forward and take over the Knights or they will give the licence to an Australian club.
The FFA have said they are committed to a New Zealand-based team playing in the league but it is dependent on some person or group willing to invest the $5 million to $6 million a year needed.
Given the fact the Knights have minimal income, no major sponsors and that the eight A-League clubs lost a combined A$16 million last season, it is hardly an attractive proposition.
"We want a team from New Zealand playing in the A-League and I hope we will be able to issue them a licence by the end of January," A-League head of operations Matt Carroll said.
"Unless meaningful discussions are taking place then, January 31 is the deadline. But New Zealand Soccer are confident there are people in New Zealand who will back a team in the A-League and that discussions with them will start in earnest next week."
Wollongong, Townsville and Canberra are all readying themselves for an expanded league, possibly in 2008, and could be willing to step in if the Knights fold.
New Zealand Soccer have said they wouldn't do it - and that it would be wrong for the national body to become preoccupied with running a professional club anyway - but Carroll said they could hold the licence if there were a large number of investors. Melbourne is owned by as many as 60 individuals.
One factor more attractive to potential investors is the fact the club's debt has been written off by the FFA.
While it might have looked like the FFA moved quickly to wind up the club headed by Brian Katzen and Anthony Lee, in reality it has been a long time in the making.
The events of the past week have thrown up more questions than answers and it's still not clear how the club's failure occurred, considering it was owned by three wealthy individuals who repeatedly outlined their commitment to the Knights.
Why, for example, didn't Brian Katzen, Anthony Lee and Maurice Cox (who bought a 30 per cent stake in August) not front up with the A$800,000 owed the FFA?
Why did they let it get to such a state that other creditors were banging on the door? If it was clear the club were seriously in debt and the FFA was circling, why did the owners and management cling on until they were undone by the FFA?
The FFA have had long-held concerns about the way the club was being run and the precarious state of the Knights' finances gave them the opportunity to step in.
The Knights effectively accused the FFA of ambushing them by withholding promised funds of $300,000 from television rights.
It's understood, however, the FFA chose this action because of the debts and because the Knights had not been providing audited accounts for some time - not normal business practice.
This was not the sole breach of the A-League participating agreement and the A$800,000 owed to the FFA was not the only debt outstanding. The number of creditors gathering at the gates was swelling by the day and it was significant the club was wound up on pay-day. It's understood wages are yet to be paid for December and the $300,000 Lee argued the club was owed would have done little to stop the haemorrhaging, considering that represented only about two months' wages.
There are, in reality, a number of things that just don't add up about the way the club was being run.
Katzen and Lee are extremely wealthy individuals with multi-million dollar portfolios. They indisputably pumped in money to ensure the club ticked along - but not, it seems, enough to satisfy the FFA.
To be fair, they weren't helped by the fact there was little income. They had no major sponsor - they had few sponsors at all - and were losing money every week by playing in an increasingly empty North Harbour Stadium.
Katzen co-founded Octagon Holdings in 1997, which owns 50 companies, employs 800 people and generates revenue of about US$300 million. Within Octagon's portfolio is Swansea City Football Club, which the company bought a major share of in 2002. At the time, Swansea were teetering on the brink of collapse but in the space of four years have turned things around on and off the pitch.
Lee founded Student Support Centre in 1990 and built it into a business with 500 people and a turnover of €20 million.
Earlier this year, Katzen told the Herald on Sunday: "We are not doing it for fun, you know. We're here to make money, otherwise I wouldn't be around."
He said he wouldn't panic about losses of $3 million last season as "everything is a long ride. It takes years to get things right because in business, you have to invest for the long term, otherwise it doesn't make sense. If you want a quick fix, it's like gambling.
"[What happened] last year makes me feel even more strongly about getting it right. It makes me want to prove to myself and to other people that we can make it in a rugby-mad culture."
The Knights had no board, no governance in place and few structures to give the company direction. Lee and former director of football Barry Simmonds were operating as joint chief executive following the departure of Bob Patterson, who left out of frustration at the way the club was being run.
It must be remembered the Knights aren't the only club struggling financially. The FFA is financing Perth and also has small stakes in Central Coast and Melbourne. Defending champions Sydney also struck major problems before they were propped up by the Lowy family, whose head is Frank Lowy, the chairman of the FFA.
The FFA had many problems with the Knights - their insistence in signing overseas players, the old boys network that Lee operated in recruiting staff (Adshead, Tommy Mason, Alan Yates, Steve O'Hara, Simmonds and even Chris Turner) and their refusal to work with NZS. Lee also dug his heels in despite public utterances that he would be prepared to step aside if an able replacement was found.
The decision to revoke the Knights' original five-year licence will either represent a significant turning point for a New Zealand A-League franchise or the beginning of the end.
In the next six weeks, the future of a professional team in this country will be decided because, once gone, there is little hope of ever getting another.
A number of All Whites in Australia and Europe have said that they would sign on if All Whites coach - and interim Knights manager - Ricki Herbert was involved.
It is a position that Herbert has been keen on filling for some time but the biggest question is whether there will be a club for him - or anyone else - to manage.
