The New Zealand Rugby League will declare a $1.2 million loss for the year on Wednesday.
Fairfax Media can reveal that the NZRL, which has a history of financial problems, has burned through a reserve fund of $950,000 built by former chief executive Jim Doyle, and will report an overall deficit of $250,000.
Current chief executive Phil Holden says the financial result is primarily due to the cost of last year's failed World Cup defence in England - the same tour which triggered an investigation into New Zealand players' misuse of prescription drugs.
Six years ago the NZRL was slammed in a publicly-funded review and totally overhauled. Crown entity Sport New Zealand (then known as Sparc) stepped in to fix, among a raft of other problems, accumulated losses of $2.2m for 2006 and 2007.
The Crown intervention led to the appointment of Doyle who successfully turned the NZRL around, including bolstering the books with a $950,000 rainy-day fund. Doyle went on to his current role as chief operating officer for the National Rugby League (NRL) and will take over as chief executive of the New Zealand Warriors in October.
Holden, who replaced Doyle at the NZRL in November 2012, has admitted his taxpayer-funded organisation will post a $1.2m loss at its annual meeting in Auckland on Wednesday.
However, Holden is downplaying the result, citing normal peaks and troughs in the accounts in the four-year World Cup cycle.
Holden is also bullish about fixing the problem. Claiming his organisation will be "a $10m business" per world cup cycle by 2017, Holden also says he will not only turn the books around, but more than double Doyle's previous reserves to $2m by 2017.
"We'll be recording a deficit of $1.2m," Holden told the Sunday Star-Times.
"The result we're going to publish at the AGM on Wednesday is in line with what has been flagged by the NZRL over the last four years. The model that we operate under is we need to build up reserves to fund our world cup year.
"In a world cup year we give up all our commercial rights, there's no commercial revenue from a world cup.
"Looking forward, we're going to build up reserves of $2m and grow our revenue to $10m [four-yearly by 2017]. To do that it means we need to fundamentally overhaul the commercial base of the organisation and remodel the whole thing."
Holden confirmed the International Rugby League Federation covers some of the costs of sending a team to a world cup.
Last month the Crown's elite funding entity, High Performance Sport New Zealand, agreed to step up its support for the national men's team to the tune of $700,000 over the next two years.
In a press release, the NZRL described the boost in taxpayer funding as "validation" for rugby league in New Zealand and its national governing body.
"Fundamentally, it's a validation of us as an organisation and our strategy," Holden said.
NOTE: This story has been edited since it was first published as it incorrectly stated the New Zealand Rugby League was $1.2 million in debt. The NZRL will announce a loss of $1.2 million on Wednesday.
- Sunday Star Times
Will NRL superstar Jarryd Hayne be successful in chasing his NFL dream in America?Related story: (See story)