A network is a group of organisations connected in ways that facilitate the achievement of a common goal (Provan, Fish & Sydow, 2007). Within this context, a clique is a distinct region in a network of firms with interconnections among the firms that are denser than in other regions of the network. Another way of describing cliques is that they are networks within networks (Rowley, Greve, Rao, Baum, & Shipilov, 2005). Professional sports leagues are structurally consistent with a federated network (Dickson, Arnold & Chalip, 2005; Provan, 1983). Within federations, the Federation Management Organisation (FMO) coordinates the collective interests of federation affiliates. Previous studies of federated networks have not explored the density of ties within a federation (Provan, 1983). The purpose of this study was to examine; 1) the determinants of clique formation; 2) how each clique is governed and how it functions; and, 3) the impact of each clique on its members, non members and the federated network in which it operates. These questions were investigated in the context of the 14 provincial rugby unions that participate in New Zealand’s premier provincial rugby competition, the Air NZ Cup. This research utilised semi-structured, in-depth interviews with a purposive sample that included all of the current premier rugby union CEOs and two former CEOs. A case study approach was also incorporated into the methodology in that each identified clique was utilised as a case to address the research question. To complement the primary data some secondary data sources were also utilised. Concepts from the literature guided both the investigation and the analysis. Because of the paucity of clique research, the conceptual framework was drawn from wider interorganisational relationship (IOR) literature. Key concepts included the determinants of IORs, network governance, member inclusion and decision making, interpartner legitimacy and cooperation. In addition to these a priori concepts, the investigation also allowed for the emergence of new themes and concepts. The findings highlighted the existence of three cliques within this federated network: 1) Five Super 14 franchise cliques that were mandated by the FMO, the New Zealand Rugby Union; 2) A base union clique that includes the five unions responsible for managing the five Super 14 franchises; and 3) the G9 clique which includes the non base unions that do not manage a Super 14 franchise. Cliques may be mandated by the FMO or they may be member initiated. Clique formation reflected commercial sustainability, organisational learning and political influence motives with the political influence motive being highly salient during the time of the research. Clique formation coincided with significant changes in the operating environment and therefore uncertainty reduction was also an underpinning factor of clique formation in this research. Governance structures ranged from very formal, with a lead participating member contracted to manage the clique on behalf of the FMO, to less formal structures with a shared participant mode of governance. Some cliques were extremely cooperative entities that embraced cooperation and member inclusion as being essential to the successful functioning of the clique. On the other hand, some cliques contained members who felt largely disengaged from the clique of which they were a member and these cliques demonstrated lower levels of cooperation. Interpartner legitimacy issues were also prevalent within some cliques. The impact of each clique on clique members, non clique members, and the federation varied. Clique membership was associated with positive impacts that included enhanced commercial return, knowledge acquisition, sharing of critical resources and collegiality. Negative impacts included management complexities, losing critical resources to clique partners and no commercial returns as a result being a member of an under performing clique. Clique impacts on non members and the wider network were demonstrated in the first instance when the formation of one clique greatly influenced the formation of another clique. Secondly one clique was able to achieve a degree of political influence as a result of a coordinated and concerted effort by the clique and its members. This political activity drew strong criticism by non members. As well as contributing to an area of interorganisational relationship research that has to date received little academic attention, the key contribution of this study lies in the way it challenges an underlying assumption that organisations in professional sports leagues interact with each other equally and that this interaction is largely coordinated by the FMO.