Netball: Teams battle to balance books

The Magic are one of three New Zealand franchises to receive financial assistance from Netball New Zealand. Photo / Getty Images

Three of the five New Zealand franchises in the ANZ Championship received handouts and financial assistance from Netball New Zealand during the past season.

While the Pulse's financial woes are well documented - the Wellington franchise were saved from extinction at the end of their first season in 2008 and have been propped up ever since - the Magic and Tactix were also forced to go to their governing body in 2011.

The support offered by the national body has varied from direct cash injections, underwriting of bank overdrafts, various other financial guarantees as well as financial advice. The total support for all three franchises is believed to run into hundreds of thousands of dollars.

While the teams have many costs in a difficult financial environment, wage demands appear to be one of the reasons for the clubs' various issues.

The hope is that high profile players help to attract sponsors. A high finish would also bring financial spinoffs.

The situation has created ripples across the Tasman and the plight of the New Zealand franchises will be high on the agenda at this week's annual league conference in Melbourne.

"The whole financial model of the league will be discussed with all the teams and certainly those three New Zealand teams will be a big part of those discussions," says ANZ Championship chief executive Anthony Everard.

"If things aren't working, we need to understand the reasons why and then look at some solutions.

"These are financially challenging times - our league is not alone in this and we are working very closely with Netball New Zealand on this."

Netball NZ, while obviously hoping the need for such support will be indefinite, believe the assistance is justifiable and warranted at the moment.

"Our netball franchises exist in very difficult times," says Netball NZ chief executive Raelene Castle. "Across all sports it has been increasingly difficult to find sponsorship and netball is no exception. But the ANZ Championship is incredibly important to New Zealand's strategic goals and I guess you could see this as a strategic investment."

Castle's point is valid; the ANZ Championship delivers five live televised matches every week. All the media coverage creates a profile that is the envy of many other sports in this country, making the six figure 'investment' a small price to pay.

ANZ Championship teams operate under a salary cap of $300,000 for their 12-player squads. The cap is fully funded by TTNL, the joint venture body (Netball NZ and Netball Australia are equal shareholders) set up to run the league. TTNL, who derive most of their income from television fees, also pay around 95 per cent of all travel and accommodation costs for away games.

Unlike the NRL, the netball cap is a 'soft' cap. Teams are permitted to spend another $50,000 on player payments - typically used as performance bonuses. There is also provision for players to be employed by their franchises on additional contracts for other duties, typically involving development work in the region, promotional work or work with sponsors.

There is no way of policing these arrangements, but league officials say they are confident teams are abiding by the spirit of the rules. These provisions for extra payments mean players, especially those in the top bracket, can supplement their basic salary by up to 50 per cent.

However, the bonuses plus extra paid work for players is believed to be one of the sources of financial pressure for the franchises. From their main sources of income - gate sales, hospitality deals and sponsorship and merchandising revenue - teams have to fund their coaching and administration staff, stadium hire and other game day costs as well as any additional payments made to players above the salary cap.

Despite the obvious perception that teams may be spending beyond their means, Castle is confident all New Zealand franchises run lean operations. There's also no doubt the Tactix have been affected financially by the Christchurch earthquake and continuing aftershocks.

It's complicated further by the fact the vast majority of players in the league sign contracts on a year-by-year basis, hampering long-term planning. It means that, in some cases, franchises sign players then go out into the market to find sponsors to pay for them.

"Ideally we would like teams to make sure their revenue streams are finalised before they make all their commitments," says Castle.

Asked if the Magic had received financial assistance from NNZ, Magic chief executive Sheryl Dawson said: "It has been extremely difficult financially and it is a tough environment to be working in.

The Rugby World Cup has presented a unique set of circumstances in the marketplace with obvious challenges but the issues are mainly around the current economic climate and all that uncertainty out there. Financially, we are managing to get by - we are travelling reasonably well but I'd like a sugar daddy."

Dawson claims the Magic are a "lean, well oiled machine" but was reluctant to comment specifically on their monetary issues.

The Magic recently confirmed the retention of Irene van Dyk and Laura Langman, with Ferns captain Casey Williams expected to announce soon that she will also be staying in the Waikato. The superstar trio are understood to receive some of the highest incomes in the league. Star defender Leana de Bruin is also expected to suit up for the Magic in 2012.

Despite the financial pressures on this side of the Tasman, Everard denies there is an issue with franchises spending beyond their means.

"All teams do a pretty good job in terms of running pretty lean budgets and I don't think anyone is being excessive in their spending." Everard admits that, while there is an option to restrict the amount of money teams can spend beyond their salary cap, it's unlikely to be exercised.

"We are reluctant to look at slashing expenditure budgets because the product we are delivering is a very good one and that is the feedback we have had from fans, sponsors and stakeholders. Reducing costs would be a last resort.

"We don't want to see a situation where the financial model is not viable. I think we all have a responsibility to look at how we are structuring team and league finances. If there is a gap the teams can't meet we need to see what is the size of that gap."

Meanwhile, there are moves underway to relocate the Pulse to Taranaki, with the New Plymouth District Council saying they have approached the Wellington franchise about a move north.

Mayor Harry Duynhoven told the Dominion Post on Friday that preliminary talks were under way, and Pulse management are looking to find the best base. Netball NZ CEO Castle confirmed that they are examining a "mutual opportunity" with the New Plymouth District Council.