Netball Australia reported to be on verge of financial ruin

Auditors have warned Netball Australia that it is in danger of financial collapse with losses and debts amounting to $11 million.

As reported by News Corp, Netball Australia is facing this financial predicament after years of bad fiscal management dating back to the launch of the Suncorp Super Netball series.

A News Corp investigation has revealed that within the upcoming 12 months “it is probable” the sport will not have the liquidity to pay its obligations as they come due, or will violate a debt covenant.

The report also revealed that, even prior to the COVID pandemic, the sport has been relying on governmental handouts, blaming the crisis on walking away from the trans-Tasman series with New Zealand in 2016 without a commercially viable plan that delivered strong revenue.

It means Netball Australia is now at a point where it has lost $7.2 million over the past two years and has bank debts of approximately $4 million that are due and payable at the end of next year.

Netball Australia Chief Executive, Kelly Ryan confirmed that a ‘going concern’ notice had been issued to the organisation, advising that the sport’s leaders could not afford to be “paralysed by fear to make the tough decisions” and that they must become ‘business minded in order to survive.

Ryan told News Corp “the landscape of sport is very different and we have to start running netball like a business ... there is a legacy left from past administrators (regarding financial management).

“We have a ‘going concern’ notice from our auditors, which highlights just the sensitivities of NA’s financial position at this particular moment.”

The News Corp report blamed former Netball Australia Chief Executive Kate Palmer, who left the organisation in 2016, for the sport turning its back on the trans-Tasman competition.

In doing so, it lost about $3 million a year that Sky New Zealand had been paying to broadcast the competition with the new broadcast deal for Suncorp Super Netball having no rights fee.

However, players in Suncorp Super Netball receive a larger portion of broadcast revenue than any other Australian sport at 92.85%.

Ahead of the sport’s upcoming AGM on 23rd June, Ryan said the rise of women’s leagues in other sports has created intense competition to grow the sport of netball.

To generate income, Ryan moved this season’s Suncorp Super Netball grand final to Perth to secure in a $650,000 deal - despite a possibility than a team from Western Australia may not make the season-ending game.

News Corp also reported that former Federal Sport Minister Bridget McKenzie authorised a $2.5 million bailout grant for Netball Australia in 2018, bypassing the Australian Sports Commission.

Senator McKenzie, an avowed netball fan and co-chair of the Parliamentary Friends of Netball, authorised the one-off payment to be made through the Federal Department of Health, a decision that apparently enraged then Commission Chair John Wylie.

Wylie argued the officials described the ordinary business challenges that all sporting bodies faced, rather than justification for a special payment.

In December 2019, Netball Australia then received another Federal Government grant of $2 million for a ‘digital transformation project’.

In the past 12 months, Netball Australia has installed a new board which consists of six independent directors and three that are elected by the states and territories.

Previously six Netball Australia board members were elected by the states and territories governing bodies - with just two independent directors.

When the new - and far more independent board - took their spots around the table in June last year, there was a reported feeling of “shock and concern” when they saw the financials.

As one member disclosed to News Corp - the revamped Netball Australia board have been in “crisis mode from first board meeting due to the financial situation of the organisation and are only starting to come out of that now as the business begins to stabilise”.

In 2020, Netball Australia took out a $2.7 million-dollar loan against its own building in Fitzroy.

This loan plus an additional $3.2 million in government grants kept the organisation afloat and in 2020, the governing body posted a $2.8 million loss instead of registering a $7 million loss.

Revelations about the crisis follow the Australian Netball Players' Association (ANPA) having voiced concerns about Netball Australia withholding information.