Hawthorn president Jeff Kennett believes that North Melbourne's financial state is "unsustainable."

While newly re-elected Kangaroos chairman James Brayshaw says the club is not broke, Kennett insisted he faced an enormous challenge to ensure North became profitable.

Brayshaw bristled at a report in The Age on Thursday that the struggling club was in deep financial trouble and had less than $3000 in its bank account when its annual report was filed on October 31.

He said the figure was plucked from a single month and a week later there was $1.5 million in the same account.

But Kennett said he was "absolutely" concerned by the Kangaroos' financial situation.

"It's unsustainable," Kennett told Fairfax Radio and hinted that the club directors must overhaul the organisation before it became insolvent.

"I've read the reports, I know the difficulty they've been having for a number of years but with the debt that they have and the costs of running a club.

"... there comes a time in any commercial organisation when you approach that point where there's got to be a massive change or the directors are putting themselves at risk because the entity of which they are part, whether it's a radio station, a football club, is insolvent.

"James Brayshaw has got a huge challenge now - no-one should underestimate how big it is and it's probably in one sense only got worse over the last three or four years."

Kennett said North would survive but it could come at a risk of putting a severe dent in the league's television rights income.

"They are working very closely with the AFL," he said.

"The club will survive, I make no bones about that, because the AFL will be signing a contract with the media shortly for the delivery of 17 and then 18 clubs.

"We are going to be spending as an organisation about $100 million establishing the Gold Coast, and another $100 million getting GWS off the ground.

"If the AFL gets $1 billion dollars for the media (television) rights, $200 million of that is already committed over the next five to 10 years.

"So the money situation is not that much better (than the previous TV deal) but you do have to make sure that those existing clubs are also properly recognised.

"I'm quite sure the AFL will come to a deal with North Melbourne but it's very hard for them."

Brayshaw said the report claiming the club had just $2749 when it filed last year's annual report was unbalanced.

"There was no mention of the fact that a week later $1.5 million was in the same account," Brayshaw said.

"Football clubs draw down ferociously every month. It's like a credit card cycle, that's how you operate.

"At any given time you might have $500,000 in there, you might have $1.5 million in there, you might have $2000 in there.

"That's just how it works and the next month is the same ... so to just pick out one figure to paint a picture like that was pretty ordinary in my view."

North Melbourne CEO Eugene Arocca said the club had ramped up its football department expenditure by $3 million after it decided against relocating to the Gold Coast in 2007.

"We could have pocketed that money and maybe had a million dollars in the bank account on the 31st of October 2010, but we see, as does Richmond, that the long term recovery of any football club off-field is generally tied to on-field success," Arocca told Radio SEN.

He said the club might begin a debt demolition program, similar to the successful appeal used by Melbourne.

North Melbourne posted an annual profit of $233,752 last year which included a special distribution payment of $1.4 million.

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