As they prepare to announce a record television deal, the Rugby Football League discovered today they are to lose almost £1 million in funding from Sport England after failing to achieve targeted growth in participation levels.
Sport England, whose chairman Richard Lewis is also chairman of the RFL, are to scale back their investment in rugby league by £956,188 over the next two years, a 3.35% reduction in the £29.4m package agreed in 2009.
The League put on a brave face over the decision, pointing to an increase of 55,000 adults and secondary schoolchildren registered to play in the game in England last year, and chief executive Nigel Wood insists the funding change will not adversely the sport's ambitions.
"Whilst any reduction in funding is disappointing, Sport England recognises the high quality of the governance and management of the RFL and the difficulties the sport has faced in the last two years," said Wood.
"In the last two years we have seen a massive increase in the numbers of people registered to play rugby league and the challenge now is to get those people playing more often and for longer periods of the year.
"Sport England acknowledges that the ongoing change in competition structure across the whole game from a winter to a summer-based competition will help us remove some of the obstacles that have deterred people from playing rugby league."
Sport England has also reduced the funding available to the England Golf Partnership by £107,023 in the light of disappointing participation figures shown in a recent survey.
Sport England chief executive Jennie Price said: "The decisions announced today follow lengthy discussions with each of the governing bodies.
"We welcome the approach of the leadership team at the RFL to the review of funding levels.
"The governing body has recognised the need to change the approach to grassroots delivery if genuine growth in regular, sustained participation is to be achieved.
"Our discussions with the RFL have given us confidence that the very significant investment we are still making in rugby league will deliver value for money."
Meanwhile, the RFL are poised to announce a new five-year deal with Sky that will provide Super League clubs with increased funding.
Sky's current three-year contract, worth around £50million, runs out at the end of this season but they have completed negotiations to maintain their position as Super League's primary broadcast partner until the end of 2016.
The RFL say they are not yet in a position to confirm the deal but Super League clubs' chief executives have been briefed about the agreement, which could be worth in excess of £90m over five years.
The increase will come as a pleasant surprise to the clubs in light of the economic difficulties.
RFL communications manager John Ledger said: "We are happy with the way negotiations are going with broadcasters and we hope they are drawing towards a conclusion."
An official announcement is expected in a month's time when the League expect to finalise the rest of the television deals up for grabs, including coverage of international matches, the Challenge Cup and the Championship.
IMG Sports Media, who have been acting as agents for the RFL in television contract negotiations, have been speaking with a host of terrestrial broadcasters as well as ESPN.
Sky has held exclusive live rights to the Super League since paying £87m in the spring of 1995 in a deal which included a hefty sweetener to smooth the way to a switch to a summer season.
Subsequent deals fell in value until a five-year agreement worth £63m to run from 2004-08 was struck and that was re-negotiated upwards in November 2007 when the arrival of Setanta Sports as a genuine threat to Sky helped the RFL and IMG secure around £50m over three years.