THE decision by the NRL to force the Cronulla Sutherland rugby league club to open its books to league accountants comes after four companies pulled their sponsorship - worth about $150,000 a year - following the Four Corners report on the 2002 Christchurch sex scandal.
Two of those companies - Westfield Miranda and Wendy Wu Tours - are directly linked to the female market, and there is growing concern among remaining sponsors about the way the club relates to its female fan base. "We are keen to talk to the club this week because for us it is a business decision, and it is not good business to be associated with a club that has such negative headlines in respect to women," one sponsor's client manager told the Herald.
"It's never come up before but on Friday, one of our senior executives - she's a woman - asked me pretty bluntly, 'How many women are on the board of the Sharks?' I don't think they have one, do they?
"But that's the pressure from the top [of our company] down, and we're suddenly justifying why we are a sponsor. I thought we could ride it out but as every day goes on, it seems to get worse."
Insiders said other sponsors were worried about the ongoing financial crisis, and might use the excuse that they no longer wanted to be associated with a club that had turned a blind eye to a group sex culture to exercise a get-out clause in sponsorship contracts.
With the club reeling from the group sex revelations aired in the Code of Silence program - and top club officials Barry Pierce and Tony Zappia refusing to name the players involved- there is significant concern from sponsors about the club's reputation.
But the parlous financial state of the club itself has others worried as well. NRL CEO David Gallop has stepped in personally, preparing to meet key long-term sponsor LG Electronics to help the club ease any fears. LG has been with the club for nine years and contributes about $1 million a year for jersey sponsorship, stadium signage, matchday sponsorships, official team merchandise and a corporate box.
Chief executive Zappia is in the tough position of trying to resuscitate the club's plummeting reputation while trying to stem the bleeding of cash resulting from poor home gate receipts and a struggling licensed club. Zappia had budgeted for crowds of 13,000 but, so far this year, the average is just under 9000.
The NRL hierarchy wants to know the Sharks' full financial picture from its own accountants before making any decision about ongoing assistance. Earlier this month, the NRL rejected a plea from the club to stage five games in Gosford next year in return for guaranteed income. The club's annual statement from last year showed it had short-term debt of more than $11m, an overdraft of more than $2m, that it operated at a loss of $1.4m in 2008 and had a tax debt of $800,000.
"We will have a team of people from finance, marketing and membership going to Cronulla in the next day or so to put their financials under a microscope," Gallop said. "We want to get a clearer picture where they are at.
"I am sure they will fully co-operate, and I really don't expect our guys to discover any big surprises, because we have been monitoring the Sharks' financial position for some time.
