The Auburn Warriors rugby league club is set to fold after an alleged sponsorship deal with Salim Mehajer's company fell through, the club says.
The former Auburn deputy mayor is in custody after being charged with perverting the course of justice and conspiracy to defraud by allegedly staging a car crash last year to avoid a court hearing for assault charges.
Auburn Warriors spokesman Norman Nicholas said the failed sponsorship deal had left the 65-year-old club out of pocket by "about $70,000 or $80,000".
Mr Nicholas said there was no ill will towards Mr Mehajer.
"There is no anger towards the Mehajer family, we understand business and we understand things happen," Mr Nicholas said.
"To take legal action, that would be a big step.
"What happened with the Mehajer brothers maybe wasn't in the control of the Mehajer brothers themselves."
Warriors hope for Bulldogs lifeline
The Warriors have been a feeder club for the Canterbury-Bankstown Bulldogs NRL side and they were grand finalists in last year's Ron Massey Cup competition.
Players from the club were also part of Lebanon's squad for the 2017 Rugby League World Cup.
"We were a feeder club for Canterbury, they take our players to the premier league," Mr Nicholas said.
"We are an asset in the community, we've done a good job.
"We are sincerely hoping that our big brother might step in, call us in and work something out."
But the club could be on its own.
The Bulldogs said they were not considering lending support at this stage.
A spokesman for New South Wales Rugby League said the Warriors' predicament was "sad, but it's a matter for the club".
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