After making a promising start to the season with victories over contenders such as the Canterbury Bulldogs – the club and rugby league world was rocked by the shock retirement of Andrew Johns.
The club also struggled off-field, with Brian Smith's decision to release loyal clubmen such as Clint Newton (who subsequently won a grand final with the Melbourne Storm; which was later stripped due to salary cap breaches), Kirk Reynoldson, and Josh Perry (who subsequently played in Manly's 2008 premiership) meeting with displeasure from the Sydney media and some sections of the Newcastle support base.
Newton's defection to Melbourne and Reynoldson's threats of legal action over the club refusing to play him in the fifteen games required to trigger his fourth contract year saw the club's reputation dragged through the mud.
To cap it all off, Andrew Johns again made the press late in the season after being arrested for ecstasy possession in the United Kingdom and confessing to having been a drug addict for the entirety of his playing career.
Despite these pressures, the Knights managed to avoid a second wooden spoon in three years – offloading the dreaded piece of 'silverware' to the Penrith Panthers with a last round victory over the Wests Tigers.