The top two sides in Jersey will not be competing in the Guernsey-FA organised Jeremie Cup this season.
Jersey champions St Paul's, who did not enter in 2014, have not been invited to play, while Jersey Scottish have pulled out because of travel costs.
"We really value the competition and we'd love to be in it," Scottish committee member Dave Kennedy said.
"But we agreed that unless we found a sponsor, the cost of travelling to Guernsey was too much for us."
Scottish, who are the reigning champions, estimate it would cost them around £700 each time they had to play a game in Guernsey.
The Jeremie Cup sees Guernsey Priaulx League clubs play the top sides in Jersey, with Guernsey sides playing all their matches at home.
Jersey runs a similar tournament, the Wheway Cup, with Guernsey sides travelling to Jersey.
"It's very testing times for all clubs and like everybody else, we're trying to attract as much sponsorship as we can," Kennedy, who is a former Jersey manager, told BBC Sport.
"There are more and more clubs these days finding it very difficult financially to enter both competitions.
"There isn't the level of funding coming into our club to allow us to enter both, so there may have to be some rationalisation in the future, but that's for the inter-insular committee to look at," Kennedy added.