The National Rugby League faces a financial crisis as Telstra refuses to pay the first instalment of its $90-million sponsorship deal. The NRL launched a Supreme Court action against the company on Friday for withholding "substantial monies", Fairfax newspapers reported. The action comes despite the NRL aligning itself with Telstra in its ongoing Federal Court case against Fox Sports over online broadcast rights. Telstra's refusal to pay leaves the NRL with a $10 million shortfall every season until 2012, when the deal expires. All the money has been allocated to running the code and the NRL has no cash reserves. "There can be no reason to withhold payments to the NRL," chief executive David Gallop told Fairfax. "Telstra's decision to withhold payment is highly disappointing and quite unreasonable. It is without any basis in law or otherwise." "We have been left with no alternative but to resort to court to get the money owed to us." The NRL appears to have been caught in the middle of a row between Telstra and News Ltd, which half owns the NRL and Fox Sports. Telstra said it was "surprised and disappointed" by the NRL's actions.