More than a million people used Blackpool Council's leisure centres during the last financial year - bringing in income of more than £3.2m.
It means the cost to the council of providing services, including at the town's three sports centres and two swimming pools, was less than £700,000.
But bosses have admitted the facilities need urgent investment in areas including changing rooms.
Presenting their annual report for the last financial year 2017/18 to the Resilient Communities and Children's Scrutiny Committee, they also revealed plans to develop outdoor services which could enable open water swimming at Stanley Park.
Director of community and environmental services John Blackledge said: "We are balancing income generation with involving local people into a range of activities."
The council's main centres are at Stanley Park, Moor Park in Bispham and Palatine in South Shore.
Councillors said they were concerned at the standards in the changing rooms and showers at some facilities.
Coun Danny Scott said: "If the toilets and showers are in a terrible state that will not encourage people to come back.."
Coun Kim Critchley said: "The facilities at Palatine were brilliant when they were first built but now it's been left without anything being done, and the longer it's left the more it will cost."
The committee was told the annual budget for maintenance for all the centres stood at just £150,000.
Paul Jones, head of property management at the council, said: "Palatine is over 10 years old.
"We have had to invest a lot of money in plant room facilities and that has absorbed a lot of the budget.
"The changing areas which people use are looking tired and we are looking at prioritising more of the front of house areas."
The committee also heard about future plans including the development of a new 3G football pitch at Stanley Park, supported by a £450,000 grant from the Football Foundation.
Grants are also being sought to desilt part of Stanley Park lake in order to be able to hold more watersports events and potentially open water swimming.