By Ian McCullough, AAP
Cronulla chief executive Steve Noyce says the club is pondering its next move after the NRL rejected an appeal against the $1 million fine issued in December.
NRL boss Dave Smith and chief operating officer Jim Doyle also announced on Wednesday the 12-month ban imposed on Sharks coach Shane Flanagan would stand as would the cancellation of former strength and conditioning coach Trent Elkin's registration.
All of the penalties relate to Cronulla's supplements program during the 2011 season when the squad was allegedly exposed to an 11-week regime of injections, creams and tablets.
The three parties now have five business days to request a further review by the NRL Appeals Committee, headed by former High Court judge Ian Callinan and made up of former Penrith hooker Luke Priddis and ex-NSW Minister for Sport Mike Cleary.
Smith informed Sharks chairman Damian Keogh of his decision to uphold the penalties before calling a snap media conference at Rugby League Central.
Club officials are due to meet as soon as possible to work out their next move and Noyce said he thought the argument they put forward to the NRL was a good one.
"Naturally we're disappointed, we were asked to respond to a breach notice and we went about it in a well thought out, thorough and professional manner," Noyce told AAP.
"We will get the official correspondence from the NRL and review and digest the information and see how we proceed."
Cronulla will begin their season on Monday against the Gold Coast with Peter Sharp in charge of the team.
Flanagan was unavailable for comment as was his legal representative Stuart Littlemore QC, but his future will be top of the agenda when the board meet.
Flanagan is still being paid by the Sharks and could potentially return to coach the team this season if he meets criteria laid down by the NRL which would see his ban reduced to nine months - meaning a potential return in August.
Smith said for that to happen, Flanagan must properly observe his suspension and complete an intensive education and training course that focused on his responsibilities as a coach.
He'll then need to demonstrate to the NRL that he understands his duties and obligations under the code's rules.
Smith has also ordered the Sharks to enforce new governance measures and warned if they're not completed by July 31 they run the risk of being excluded from the finals series.
He also reiterated that Flanagan is to have no direct involvement with the club, players or sponsors during his suspension.
However, he said the code had no way of preventing him from visiting Shark Park like he did last month to watch his son play before staying to watch the NRL side's trial match with the Wests Tigers.
"If we find there is a situation where Shane or anyone else goes outside those rules, then Shane risks the ability to come back within nine months," Smith said.
"The intention here is not to stop Shane watching his son play football and our rules do not allow us to stop him attending Shark Park.
"What's clear is that we want no direct or indirect involvement with the club."
Smith said the NRL would work out a payment plan with the cash-strapped Sharks to pay the fine - $400,000 of which is suspended.
But he said that would be under threat if they discover any involvement with Flanagan while he's banned.
"We will now work with Cronulla to sensibly think about a payment schedule and how we take things forward," he said.
"The $400,000 would be part and parcel of Cronulla continuing to meet the conditions we have sent out.
"We want the compliance regime to continue on its improvement but that is at risk if we find the suspension isn't being treated accordingly."