KET
Earlier this year

NBL clubs lose $15-20million

The National Basketball League is riding a wave of enthusiasm and popularity, but with its nine teams set to lose $15m-$20m combined this year it is very much a work in progress in financial terms.

https://www.theaustralian.com.au/sport/basketball/nbl-riding-wave-of-popularity-but-financial-gains-are-slow-to-follow/news-story/0c50fd4d805b86442a870b3b3a9947c6

Does anyone have access to the full article?

That's a staggering amount to lose in a year from a sustainability aspect.

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Anonymous  
Earlier this year

Can you post the article please? :)

Reply #799435 | Report this post


Anonymous  
Earlier this year

Theaustralian, enough said.
15-20, which is it?

Reply #799436 | Report this post


Anonymous  
Earlier this year

Murdoch rubbish, nrl should have gone broke years ago.

Reply #799439 | Report this post


Anonymous  
Earlier this year

I highly doubt the $15-20M figure is accurate.
Where is the proof of that?

Reply #799440 | Report this post


Anonymous  
Earlier this year

Maybe the Kings are spending even more than we thought.

Reply #799441 | Report this post


KET  
Earlier this year

Everyone be like "36ers losing $10 million of it"

Reply #799447 | Report this post


Anonymous  
Earlier this year

The National Basketball League is riding a wave of enthusiasm and popularity, but with its nine teams set to lose $15m-$20m combined this year it is very much a work in progress in financial terms.

Grand finalists Perth Wildcats and Sydney Kings, who clashed in game two of the five-game series on Friday night in Perth before heading to Sydney for Sunday's game 3, will break even at best and lose several million dollars, respectively.

The coronavirus might even be more costly for the two grand ­finalists, given they put on and carry the financial risk for finals games — a different scenario than other sports, where a central body such as the NRL or AFL put on the ­finals and keep the revenue. Empty stadiums or delays mean no revenue coming in from ticket sales, a vital source of revenue for clubs given a lack of TV broadcast money flowing into the NBL.

Yet NBL owner Larry Kestelman, a Melbourne property developer and entrepreneur, insists that there should be a lot of optimism — both in sporting and financial terms — for the league.

"In my opinion, this is the best year we have had so far," Kestelman says. “The numbers have improved, as has the general vibe around the sport. TV numbers are up and so are crowds. We have had big numbers across Facebook and social media. America has been huge with interest in our Future Stars program.

“I didn’t think we could grow our crowds any more, but we have. Last season we were at 87 per cent capacity, but we went up another 8 per cent. So we are very happy.”

There is certainly a surge of optimism around basketball and Perth have been a standout of the league, averaging close to 13,000 fans per match, according to their chief executive Troy Georgiu.

“We have wanted to be the number one summer sport in Perth. We had a game in February that was on at the same time as the AFLW derby between West Coast and Fremantle ... and we still got 13,000 to our game,” Georgiu says.

But when asked if team owner Jack Bendat, a member of The List - Australia’s Richest 250, makes a profit, Georgiu says: “We get pretty close to break even if we can host one or two grand final games. We’re pretty close otherwise and we have some terrific support from our sponsors and our fans.”

In other words, the Wildcats have to make the playoffs — and they have for 34 consecutive years — to prevent Bendat digging deep into his pockets to make up a shortfall. And in sport, on-field success is never guaranteed.

Kestelman has put up plenty of money himself after taking control of the NBL in a $7m deal five years ago, with some estimates having him up to $30m out of pocket.

But it is the club owners, a collection of entrepreneurs and in some cases, such as Brisbane Bullets owner Kevin Martin and Shawn Marion at the New Zealand Breakers, former NBA stars.

To an extent, making money for an owner depends on how much they want to spend in pursuit of trophies and sporting glory.

Sydney Kings owner Paul Smith, who sold sports consultancy Repucom in a $US195m deal in 2016, says he will lose several million dollars this year.

“But we are investing and can handle it,” Smith says. “We needed to do that to get the fans back to the Kings. We even spent $1m this year on a billboard advertising campaign, but we think that worked. It was probably worth $3m-$4m in exposure for us.

“But it is important to remember that we are investing as owners, not the league. We don’t have an ownership stake in the league itself, which is different to other leagues around the world.”

Yet Kestelman says the financial health of the league is improving rapidly despite a lack of TV broadcast money. The NBL is telecast by SBS Viceland and ESPN, but it is an advertising profit-share deal rather than for lucrative rights. “The value of each club’s licence would certainly have gone up in the past few years,” Kestelman says.

There are also two teams — Cairns Taipans and Illawarra Hawks — effectively up for full or partial sale.

Kestelman says Cairns, which has a community ownership model spread among many locals, is likely to be privatised soon. He admits Illawarra, owned by SKS Telecommunications founder Simon Stratford, needs to improve. “What I would like to see is them looking at the club as one for the entire NSW,” he says.

“That might mean bringing in ownership from elsewhere in the state … and potentially playing some matches elsewhere.”

Adelaide 36ers owner Grant Kelley, also the chief executive of shopping centre owner Vicinity Centres, says Kestelman deserves credit for helping turn the league around and putting it on a better footing after a decade of teams collapsing and a league constantly contracting and then attempting to expand.

Kelley took out full ownership of Adelaide three years ago and expects membership and ticket sales to spike for next season after signing Josh Giddey, a future NBA draft prospect.

“Our crowds were up 19 per cent without making finals. We will push that higher,” Kelley says.

“It is about making it fun. It is probably two-fifths entertainment and three-fifths about the sport. We are a group of business people so we know if you come along with your child, we want to make sure you come back again and again.”

Perhaps the best sports business deal in the league is in Tasmania, where Kestelman has clinched a deal to place a new NBL franchise in Hobart in a refurbished arena, to be paid for by the state, around a $150m mixed-use property project he will develop.

It is a unique deal for Australian sport, with a 10-storey hotel, potentially including student accommodation, planned next to the Derwent Entertainment Centre, as well as a big box retail precinct, as well as restaurants and bars.

“It’ll be the first time that the team will be in its own venue,” says Kestelman. “We will have a 50-year lease, and my related businesses will run it for basketball and other events. It will be a sustainable model and we want to be the biggest game in town.”

The Tasmanian government will pay $10m over five years to sponsor the deal.

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Anonymous  
Earlier this year

So just speculation....

Reply #799450 | Report this post


Anonymous  
Earlier this year

Crowds can't grow any more and no major big dollar media on sponsor deals

Teams will be tipping over shortly as they will not sustain the losses

Reply #799451 | Report this post


ME  
Earlier this year

There are probably networking benefits of these teams that make the losses worth having. A lot of teams appear to be invested into the long haul and if they were actually losing that much by having these teams, no one in their right mind would be. There is probably more to it for the owners than just what the loss is for the team on paper. If Perth struggles to break even, and if that is a problem for the team owners, they wouldn't go and sign Bryce Cotton to mass deals.

Reply #799452 | Report this post


Anonymous  
Earlier this year

So just average 13000 attendance and reach the grand finals and we can all break even? Too easy.

Reply #799454 | Report this post


Anonymous  
Earlier this year

So the takeaway is that the Wildcats have been propped up by Jack Bendat's money for 34 seasons..

Reply #799455 | Report this post


Anonymous  
Earlier this year

Kings not losing money, total load shite.

Reply #799458 | Report this post


Jack Toft  
Earlier this year

Who owns the Australia?
What sport do they support?
Is it a competitor to the NBL?

Just follow the money....

Reply #799462 | Report this post


Anonymous  
Earlier this year

ME,

The issue is that some owners, (see Eddie Groves) are willing to lose money for a while so long as they are winning. And they force others to lose money to compete. Problem is that eventually, those people cant afford it and their wont be those people willing to lose money. Especially after a financial crisis (see current markets) and then teams will fold/competition will decrease because people wont believe i the long term view Larry is selling for them.

Until they can secure a long term TV deal that actually makes them money, which is debatable, the league and their teams wont make money. And, risks colapse.

Reply #799465 | Report this post


Anonymous  
Earlier this year

You know how Eddie Groves went bust right? Don't talk like he walked away. He pumped plenty in when they were horrendous as well.

Reply #799472 | Report this post


Anonymous  
Earlier this year

Kings spent $1m on a billboard and they call Melbourne United the rich kids?

Reply #799473 | Report this post


Anonymous  
Earlier this year

NBL pays to have their product on TV. Isn't going anywhere until they get a proper TV deal

Reply #799481 | Report this post


Anonymous  
Earlier this year

Its source is right leaning do must not be true. Will wait till its confirmed in the Age...

Reply #799488 | Report this post


D2.0  
Earlier this year

In the early days at PA, Cats were making a profit.
Hardly surprising that has been eaten up by the salary splurge over recent years.

I don't know what LK's vision for sustainability looks like, nor Sydney's, but I'm not too worried.
NBL has never been self-sustaining, it requires owners with deep pockets.
We can't say its "not sustainable" without knowing if they are all prepared to keep giving.
And if the money starts to dry up, then we cut costs/ salaries.

Clearly Hawks are a mess, but thats one team out of nine, sort them out, and we'll have ten competative teams.

Reply #799489 | Report this post


Anonymous  
Earlier this year

Hold out for the ABC to report otherwise untrue...

Reply #799493 | Report this post


AussiePride  
Earlier this year

Was Troy Georgiu channeling boxing promoter Bill Mordey when he said the Wildcats will get pretty close to breaking even?


Reply #799496 | Report this post


Luuuc  
Earlier this year

I am clueless about that reference, but when talking about business in public, always speak as if the ATO is listening.

Reply #799502 | Report this post


Anonymous  
Earlier this year

Funny the Australian doesn't mention the millions more that AFL clubs lose and the fact NRL clubs only lose small amounts due to the millions they take from poker machines.

Reply #799504 | Report this post


LV  
Earlier this year

Sport in Australia generally just isn't profitable.

There is only one sporting league where the majority of teams make a profit- the AFL. And some of those clubs are only profitable because of their pokies revenue.

I'm happy LK is pushing bball along and the NBL is in the best shape it's ever been.

But we should be realistic and understand how very near impossible it is to have a financially sustainable comp, and how easily things could go backwards again.

Reply #799505 | Report this post


Anonymous  
Earlier this year

"NBL pays to have their product on TV."

No they don't. Not anymore.

Reply #799506 | Report this post


Anonymous  
Earlier this year

Why do we overspend, egos of owners trying to win championship, case of keeping up with the Jones.
Why aren't more clubs going bankrupt, case of bad PR so AFL gives bailouts while already footing bills for Gold Coast and GWS.
Even locally, clubs spending money just to contend. Southern get caught short, given a bailout from a parent then go back to spending on senior teams instead of getting club back into a sound financial position.
Imo, the bailouts should stop, spend within your means, if not become bankrupt and get kicked out. I'm sure there's plenty of small businesses that would love a white knight to come in. But big business like Holden's get these packages and end up leaving anyway. Now welfare recipients get $750 extra to buy more ciggies and Nike's to save the economy, what a joke it all is!

Reply #799508 | Report this post


Anonymous  
Earlier this year

AFL also receives a TRUCK load of $$$ from the Government. How do other leagues compete?

Reply #799509 | Report this post


Anonymous  
Earlier this year

I understand that NBA teams don't necessarily make profits either but their values keep going up.

It's an interesting game as usually you invest in businesses that create positive cash flows but it's not always the case. Apparently uber loses a lot of money

Reply #799518 | Report this post


Anonymous  
Earlier this year

" Now welfare recipients get $750 extra to buy more ciggies and Nike's to save the economy, what a joke it all is!"

Someone doesnt understand what stimulus means.

Reply #799530 | Report this post


Go Dees  
Earlier this year

Tv rights money doesn't exist for nbl!

Reply #799532 | Report this post


Anonymous  
Earlier this year

"So just average 13000 attendance and reach the grand finals and we can all break even? Too easy." Kinda pointless then isn't it.

Reply #799541 | Report this post


Anonymous  
Earlier this year

If Wildcats can't make a substantial profit selling 13,000 seats at an average of $60-70 per seat, their business model is very wrong.
Perhaps cut down on unnecessary shit like 25 cheerleaders or a brass band...

Reply #799554 | Report this post


Luuuc  
Earlier this year

Getting rid of the brass band would mean even more pop songs of 20 years ago being played during the game, so I'm good with paying extra for them.
Those morph suit dudes can gtfo but I'm assuming/hoping they're not paid by the cats to be there

Reply #799555 | Report this post


Anonymous  
Earlier this year

The NRL has requested $200 million from the government to help deal with corona virus

Reply #799578 | Report this post


Perthworld  
Earlier this year

NRL are deluded. It's an entertainment product yet are asking for a handout as if they're in the healthcare industry.

Reply #799588 | Report this post


Worst site ever.  
Earlier this year

"So the takeaway is that the Wildcats have been propped up by Jack Bendat's money for 34 seasons.."

Yes, because Bendat has owned the club since 1987.

Do people actually check anything before they post?



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Anonymous  
Earlier this year

love the hypocrisy from cats fans. butthurt whining about sydney and melbourne buying a championship when it's exactly what they've been doing for decades. never change flog army.

Reply #799698 | Report this post


Anonymous  
Earlier this year

The NRL are worried about going broke. How bad is that.

Reply #799755 | Report this post


Anonymous  
Earlier this year

Taipans have operated in the black since coming back as a community owned club over a decade ago. maybe a few other clubs coukd learn something from that..

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