Sponsorship pulls Diamonds out of the rough

By Dr Abdel K Halabi

Sponsorship of sporting clubs by some companies has made headline news in Australia in recent weeks. First, there was the case of Cricket Australia's $40 million funding by Alinta Energy ending after it was alleged captain Pat Cummins – a climate change supporter – had raised ethical objections to the board.

At AFL club Fremantle, there were several high-profile signatories to an open letter urging the club to sever ties with Woodside Energy. However, the biggest headline grabber was the $15 million sponsorship of Netball Australia by Hancock Prospecting and its subsequent withdrawal.

The announcement that Visit Victoria has stepped in and replaced that deal with another $15 million sponsorship is a boon for a sport that has huge participation and currently boasts the world's best team – but has struggled off the court in recent years.

Netball is the biggest team sport in Australia, played by over 1.2 million men, women and children, and is number one for participation in Australian girls. The Australian national netball team, the Australian Diamonds, which represents Netball Australia, is one of the nation's most successful with an impressive record of achievements. Currently, the team is number 1 on the World Netball Rankings, and between 1963 and 2015 won 11 World Cup championships.

The Diamonds have four Commonwealth Games gold medals, the latest being in 2022, and have won the Constellation Cup (Australia V New Zealand) 10 times since 2010, compared to New Zealand's two. They have just sealed a Test series win against England, having won the first two games in front of big home crowds.

While the performances of Australian Diamonds on the court have been world-class, Netball Australia has struggled financially. The last 10 years (2012 to 2021) have seen the organisation record four deficits in their trading operations (see Table). In the last two years alone, Netball Australia has combined deficits of over $7.2 million. The net funds of Netball Australia reached a peak of $10,598,412 in 2015, and as at 31 December 2021, this had been whittled down to just $158,718.

The latest 2021 Annual Report of Netball Australia provides a snapshot of the financial stress of the organisation. The 2021 revenues were a little over $30 million, the highest on record.

Conversely, the deficit of $4,368,836 is the worst financial result in 10 years. According to the 2021 annual report, the main revenue items are sponsorship (41 per cent) followed by Government grants (33 per cent). The main expenditure items are media and sponsorship (about 29 per cent), employee benefits (about 21 per cent), and Suncorp Super Netball (about 19 per cent). Executive remuneration in 2021 was $1,839,914, down from $2,433,787 in 2020.

The 2021 Annual report notes that Netball Australia used the extra revenue, together with cash resources, to spend on high performance for Diamonds activities, and coaches and umpires.

When announced in September, the sponsorship by Hancock Prospecting was to be directly invested in the Diamonds' athletes and coaches, and to provide funding support for training camps and competitions.

The Diamonds players, however, chose not to wear the mining company's logo during the recent Constellation Cup in support of a First Nations player, the cultural sensitivities of the mining company, and the lack of consultation by the Netball Players Association. In the end, the backlash resulted in Hancock Prospecting withdrawing from the agreement.

At the time of the sponsorship announcement, Netball Australia's CEO said, "This is a major investment for our sport, and is a huge contribution towards the ongoing success of the Diamonds". The Diamonds, however, have always had success – it is Netball Australia that hasn't.

There is no doubt that Netball Australia needed a cash injection because of its deteriorating financial situation, and this is clearly the reason for seeking the Hancock Prospecting sponsorship. It appears the Visit Victoria sponsorship deal could not have come at a better time.

Seeking more sponsors seems to be a target for the organisation, as back in June, the CEO stated that commercial opportunities could include lucrative gambling sponsorships. Since Hancock Prospecting's withdrawal and before the Visit Victoria deal, present sponsors reaffirmed their commitment to the Diamonds – Australia's most successful international team.

Dr Abdel K Halabi is an Associate Professor in Accounting. He is a Fellow of the Chartered Accountants of Australia and New Zealand (CAANZ) and a Certified Practising Accountant with CPA Australia.  He is co-editor of Sporting Traditions the journal of the Australian Society for Sports History.

Related reading:

How football cracked the COVID crowd code to survive

The AFL season is over … let the financials begin!

Why the IOC needs the Tokyo Olympics