KEY POINTS:
Sparc have helped New Zealand Football obtain a $1.5 million bank loan to keep them afloat but one of the conditions is that the federations increase the affiliation fee each player pays from 2009.
The national body has accumulated losses for the past four years that forced them to seek help from Sparc. NZF are also reviewing their domestic and international programmes and are contemplating laying off one-third of their staff.
Sparc have not only given NZF $300,000 to help with costs but also up to another $300,000 to help pay interest on the $1.5 million loan. They are not liable if NZF defaults on repayments.
There were a number of conditions, however, that went with Sparc's offer. In return, Sparc will have an observer on the NZF board for up to two years, as well as a guarantee that NZF will develop a new five-year plan that focuses on reducing costs in consultation with them.
They also sought guarantees that federations would increase affiliation fees for each player in New Zealand so more goes to NZF. At present, NZF earns only $6 from every player.
"It was critical to us that they agreed to fund repayments through increased levies from their members from 2009," Sparc acting chief executive Peter McSkimming said.
"Football had to solve some of these things themselves and they had to look within to resolve some of the financial issues.
"Our offer to football shows how important we think it is to New Zealand. What they have to do now is consider a balance between participation and high performance, and one isn't at the expense of the other. That's a challenge for all sports who run extensive high performance plans.
"It's about cutting costs to meet the dollars you have. When you go beyond that and anticipate revenues that don't come, that's when you get yourself into deficit and cashflow issues. There are a lot of sports in that situation but, with limited or no reserves to fall back on, it becomes quite a risky area."
In 2005, NZF made a conscious decision to focus more on international activity after a period of relative dormancy and try to qualify for 14 World Cups in five years.
Although they are 100 per cent successful to date, with seven from seven, it has been a costly exercise and NZF chairman John Morris said they would now have to decide if they tried to qualify for every World Cup in the future.
"We can't throw ourselves holus-bolus into everything," he said. "We have to look at every competition and ask if that is worth going into. In the past, we have been a little selective. There are a certain number you need to play to maintain status with Fifa.
"International football and success is still important to us but so is the grassroots because that's where the good players come from eventually.
"[The financial situation] has made us review everything we do as an organisation. It's not about how much we want to save but how much we want to do in the future, what our core business is and how many people we need to run that. That's still a matter of debate."
An independent consultant will be hired to oversee the review and will be done in consultation with NZF, the seven federations and Sparc. This will be completed by the middle of May.
