Southern TeamCo loss linked to financial model

Southern TeamCo chairwoman Janet Copeland has expressed concerns about the trans-Tasman netball league's financial model.

The Southland Times can reveal Steel suffered a $45,000 loss during the 2010 financial year and they are expected to post a worse result for their 2011 financial year, which finished yesterday.

Copeland did not want to provide a figure for this year until it was confirmed, but acknowledged it would be "substantially more" than last year and said it was "not where they want to be".

During the past year, Steel had also gone to the Community Trust of Southland for an additional $100,000 grant which had been turned down.

The global financial crisis had impacted heavily on the way Steel had been able to do business this year and Copeland said most professional sporting franchises in New Zealand were battling to increase revenue and sponsorship in the present economic climate.

Copeland also hit out at the financial model of the ANZ Championship, which she said was not working, with almost all of the five New Zealand franchises struggling financially.

The main issue appears to be rising player costs and the ANZ Championship's collective agreement, which means a bench player now earns the minimum $12,000 contract retainer.

"Netball New Zealand is undertaking a review and hoping to address the financial problems. It's clear something needs to change. Financially [the present model] is not sustainable," Copeland said.

Community Trust of Southland chief executive John Prendergast said he had faith in the TeamCo board and also believed the root of the problem could be attributed to the ANZ Championship's financial model.

"If you look at the (New Zealand) rugby model, part of the problem is probably the way it's being operated. The financial model (with the ANZ Championship) doesn't stack up and needs to be looked at. It's a structural problem as much as anything. There's good people on the [TeamCo] board and Steel receive encouraging support from the Community Trust and the ILT."

Steel are not alone in their financial issues.

The Central Pulse have had a tumultuous time financially since the inception of the competition in 2008 and the Waikato-Bay of Plenty Magic and Canterbury Tactix were both forced to go to Netball New Zealand earlier this year for financial assistance.

Having the smallest population and business base in the 10-team competition instantly disadvantaged Steel and Copeland said they had slashed player budgets for next season to meet their monetary targets.

Despite their financial problems this year, Copeland was upbeat Steel would be able to turn things around. They had already attracted $60,000 of new sponsorship for 2012, after losing sponsors Vodafone and Couplands Bakeries during the past two years.

Copeland said a hard look had been taken at all areas of the business and she was optimistic about the future.

"I'm definitely confident. We've eliminated so many costs.

"We've obviously cut player costs and are looking at every single aspect of our business. We run a pretty lean ship."

Steel are also wanting to increase their presence in Otago, which they see as a "really important commercial base", and will play an extra game in Dunedin next season as they attempt to increase both membership and commercial opportunities.

Invercargill Licensing Trust general manager Greg Mulvey was also confident Steel would weather the financial storm and said they had been open with their dealings.

TeamCo and Netball Southland received $230,000 worth of funding from the ILT and $295,000 from the ILT Foundation during the 2011 financial year, as well as $250,000 from the Community Trust of Southland.

- © Fairfax NZ News