Newcastle KB United (KB beer were the sponsors) were founded in the NSL in 1978
They played at the International Sports Centre (now called Marathon Stadium - home ground of the Newcastle Knights {A Rugby League Team}) KB played host to a number of guest players in those years including Mick Shanon (every soccer book you read there is a photo of Mick with the caption - "FLAIR"), Kevin Keegen, Craig Johnson, to name a few.
KB was travelling mid-table for those years and used to get crowds of around 15000 people every game and used to have an enormously talented ball-boy in a young Michael Kmet. Those were incredible memories.
KB went broke through poor management [..the then.] General Manager [was] called Dave Macguire [xxxxx]. KB folded not long after selling star striker Kenny Boden - a legend.
The NSL were keen to keep Newcastle in the NSL so invited Adamstown Rosebuds - a local club to enter the league. Rosebuds were a wealthy club with a large Sports Bar/pub/Club etc. They went quite well for the few years they were in with the National League being split into Southern and Northern divisions.
So in 1986 (i think) the NSL wanted to introduce a national competition again. They used all these complicated mathematical calculations and criteria to judge what teams would be in the new league. Criteria included - past historical results (Rosebuds did not have a history), financial situation, venue, present results, etc.
The NSL somehow calculated that the final game of the year between Rosebuds and Sunshine George Cross would decide which of these two teams would go to the new National League. Rosebuds were up 1-0 (a Weds night) when a MASSIVE thunderstorm hit the ground, delaying the game and causing a mud-fest. The next half saw Sunshine peg back a goal in an absolute water-logged pitch. The game ended a 1-1 and the NSL decided that SGC had more points through its unbelievable mathematical formula and Rosebubs dropped down to the new State League competition and have stayed there up to today.
The Breakers arose from another Newcastle State League Club called Newcastle Australs - I played State League youth with this club. They decided to put a proposal together to join the National League headed by two local Greek business-men and brothers John and Con Mitsios. They were also executuives of Australs. Their proposal was accepted and they spent around 2m building a grandstand, putting hills and lights in, etc. They also hired one Dave Maguire as General Manager (remember the guy from KB). He also [headed] the Breakers [when they went] bankrupt and was rumoured to had a deal with the builders of the Grandstand - Geoff McCloy, to have [spent] money [of] the club with some suspicious deals. Incidently, McCloys now have 20% ownership of the new Mariners super-league team {another Rugby League team}.
The club folded again - not long after the Breakers decided not to sell star striker Warren Spink (remember the emotion with KB and Kenny Boden). This was highly symbolic and a large public outcry caused Spink not to be sold.
The club actually folded when BHP and Mitre-10 withdrew sponsorship - the exact money needed to keep the club surviving.
The ground and the club were in limbo until a "soccer-friendly" consortium of 13 wealthy people decided to buy the Breakers, wipe their debt, and put a proposal for the NSL. The rest is history.