Equalisation is what's required.

Perth, nz, adelaide?

Share the wealth so the nbl survives

Perth and Cairns are, AFAIK, the only teams making a profit. Cairns made a few bucks, the Wildcats somewhere around a million. Not really enough to start sharing it around.

Not sure why clubs should "Share it around" when other clubs are missmanaged and just performing poorly. I actually think Townsville needs to get its act together or get out basically.

This is an ongoing topic.

I think we have consensus that an NBL team needs about $4M/yr to cover costs. In a league of 8 teams that means the league needs to generate at least $32M/yr in revenue to survive. You probably want to aim for at least $35M/yr to be sure.

There is some good logic in a gate equalisation as teams will do well and others struggle. Court attendance numbers are linked to on court success.

Teams who manage things well and get good numbers should not be penalised, but the waxing and waning of on court success means these numbers vary.

Perhaps each club puts in 10% of their court takings and this gets split 8 ways. Thoughts?

I don't know why a successful club should have to give their earnings to struggling clubs.

It happens in real life and that works well so there is merit in looking in to it for the NBL.

"NBL clubs need 3 million."
What basis do you have for this number?

Crocs are all in all sorts of shit

I don't understand the Crocs situation, the community got behind the push to keep them.. then don't turn up to games? Ludicrous really.. I know the NBL doesn't like dropping teams at the moment.. but in Townsvilles case.. if there is going to be all this "sharing" with money in the league.. they are going to be a black hole. If they have to go.. they have to go. Can only keep life support on for so long.

If the NBL should only have 'profitable' teams, then we are probably looking at two teams playing each other 14 or so times to make a 'league'...
the rest would fold..

If there is not some sort of equalisation or load sharing, season to season, the whole thing falls into an abyss.

The problem with equalisation is that there aren't enough teams making enough of a profit.

Last two anons spot on, more teams, more games, more games on tv, more tv viewers, bigger exposure for sponsors and advertisers equals more profitable tv deal for nbl. Then the nbl will have the chance to distribute some of that income to all clubs.

This is surely what the nbl is working towards, the most sustainable and cost effective increase in revenue would come from tv, sponsorship, merchandising etc rather than more game day ticket sales. Because of the size of most nbl teams budgets a distribution of $100k to $200k per season per team would make the world of difference to teams like crocs, gong and cairns that are living on the edge. That's a tv deal of $2 million or so a season, surely that's a possibility.

In a previous post someone was talking about how Hawthorn generate $3M from gate sales and get another $13M from other sources.

The other clubs owners won't let Crocs or Gong fold....as then there is no league and there investments/clubs become worthless.

Equalisations would help make the league sustainable but that said you might find once spread over 8 teams the little profit made by NZ/Perth doesn't go very far.

I agree that more teams = Gate receipts/TV/sponsorship etc - However the costs also increase and viability has been the major issue in the league since at least 1999/2000 as we have relied on rich owners to prop up clubs rather than self sustaining models.

To have rich owners tipping in is great but unlike the NBA or EPL there isn't a long line of new owners willing to buy in if a current club owners goes broke (i.e Brissy/Kings) or loses interest in throwing good money after bad with no success!


We must remember the owners are here to hopefully turn this into a profitable venture in the meduim term.

Correct Jack
AFL teams don't make money from their football teams, they make money in other ventures like property , hotels etc. They use the cash flow from the sport to build investments which then sustain the football department costs.

Very few sporting teams make money at all. NBA teams are largely only profitable on the sale of the team. The team also usually comes with some financial interest in the home stadium. Cuban has turned the Mavs into a $685 million team ( Forbes) which he bought for $285 million. This of course assumes that the $400 million gain hasn't been chewed up in the process.

F1 teams have diversified into technology and catering business' to survive. V8 teams have gone into engineering and manufacturing business.

Basketball must get to that level of thinking for it to survive, philanthropy only goes a certain distance.

If the next TV deal provides a solid income stream then the teams will start having some guaranteed cash flow values which they can leverage off of to diversify into other ventures.

Each NBL team needs either 1 million each from TV sponsorship or for the NBL HQ to cover the pay roll ala A League. Then the future of the league will be stabilised.

We also struggle in Australia with appropriate facilities to play the game in. Adelaide cant play anywhere but at the Arena. Townsville are forced to pay $30,000 per game in rent which is one of the highest in the competition. Sydney has no decent alternative. Brisbane's major road block is a venue

The venue situation is over come with solid and stabilised income streams.

Perth is the hot model right now. New facility embedded in the CBD with a winning team spins a decent profit that is then reinvested into the marketing and basketball departments to keep the wheels spinning.

If they couldnt have moved into the new Arena they wouldnt be profitable.

In Adelaide there are plans about to upgrade and enclose Memorial Drive, now wouldnt that be something

I don't know why a successful club should have to give their earnings to struggling clubs.

Just because Cairns are a community model, please don't bracket them with TSV and Gong. As was mentioned early, they are one of the few clubs in the league who are in the black.

I recall reading an article from the West Australian newspaper prior to the season. Nick Marvin CEO of the Wildcats was quoted as saying with the additional financial commitment made to the basketball program this season (coaching, fitness & diet gurus etc), the Wildcats need to average around 12,000 per home game to break even. The additional investment is made possible by the profits made from last season.

So the argument about revenue sharing is murky - why should a successful club share it's revenue when it has every right to reinvest into its own program?

Their is a push for a new stadium in Townsville and I hear that it will have a convention/entertainment centre attached.

The stadium hasn't been approved yet and that is still many years away for the Crocs.

The only other option for the Crocs is to move to RSL stadium which is around 2000 seats and people say it is terrible viewing.

It's possible anon isnt aware not-for-profit means investing all money made back into the business, rather than not actually trying to make a profit?

"Crocs pay over $20k for rent per game at the TECC, for that they get nothing in return!"

They get the building. That's how rent works.

So every team is supposed to declare to NBL on a monthly basis their books (to show if they are hemorrhaging money... Would be fascinating seeing those and all the expenditures that a club has.

I think we are all getting a bit worried about Wollongong and Townsville with their awful crowd attendances but do remember this league has no naming rights sponsor and the league headquarters acknowledged that and were happy enough to go this season without one... You'd have to believe that next season we will have one and hopefully it is a string recognizable brand and won't turn people off the product like 'alcohol th!nk again' which is atrocious.

We have to have faith that next season we won't have boring arsed playing jerseys but ones that everyone will want to wear and hopefully every team earns from the sale of them and the exciting new crop of imports that will come into our great league

Are the teams using the Community model actually "not for profit"? Those things do not have to be mutually exclusive.

We can decide to prop teams like TSV up with funds year in year out.

But, you aren't really solving anything. More just masking the problem -- which is their lack of crowd attendance/low-level interest from the community

You are just giving them money to stay afloat and holding of on the inevitable


Surely if you are going to give money, you would rather allocate it to a new team (from somewhere like Brisbane) who you know can pull the community support, draw crowds and increase sponsorship.

Ultimately, TSV can't sustain a team in the NBL, so you have two options:

- Fix it now and get Brisbane in

or

- Make teams prop TSV up for another 5-6 years after which they will fold anyway


The first option makes more sense.

"So Paul if you invest ALL the money back into the business you should never make a profit only break even."

That would only be the case if you invest it back in during the same financial year. It is more likely they would make a profit and then invest it back in the next year.

The Crocs can be viable. They were the most profitable team in the league for years. Doesnt that suggest there is a market there? Townsville is also one of the fastest growing cities in the country and has a very robust economy.

The problem is with very poor marketing which appears to be done in house by volunteers, and is then compounded by poor play on the floor and a self imposed salary ceiling that all but ensures non competitiveness. Theyre all obviously problems stemming from poor cash flow so its a vicious cycle. The most easily fixable problem is the marketing. The quality of the promo videos is very very low. Like "shot on a cell phone and edited on a program from 1995" low...

The community didnt get behind this team and then not come to games as suggested above. They fell well short of their foundation membership target. From memory they got around half of what they were going for.

Proud, Alchohol Think Again have possibly the biggest sponsorship deal for a club in the league. I cant imagine any other team or league sponsor putting in as much cash as they are.

Also what is wrong with Alcohol Think Again anyway? These are the types of organisations all sports teams should want to have. Their message is very important.

Not to mention, NBL teams can hardly be choosy with their choice of sponsors...

Also: article from this morning about the state of the Crocs:

http://www.townsvillebulletin.com.au/news/crocs-desperate-plea-for-fan-support/story-fnjfzs4b-1226808102048

A successful community model is much better than private ownership as it is sustainable, and the generosity of benefactors can be channeled through sponsorship.

The successful leagues in this country dont rely on private ownership, and hopefully the NBL can get to the point where it doesnt either.

Well Townsville can't do it on their own. The league office spending $0 on marketing isn't helping their cause.

These teams should all be able to run their own marketing and gain crowds regardless of the league's spending. Innovative promos, community outreach, etc. They've done it before in the absence of any real league advertising.

Townsville are a bit white-bread this season and at the bottom of the ladder.

Saw this on the Bulletin site:

Tickets are way to expensive, for 1 adult and 1 child before getting a drink and bite to eat is around $70 - $80, that's twice as much as the Cowboys

I don't think the NBL is going to run next year, Townsville are gone already, Wollongong are almost dead and many other teams are struggling, I can't see it continuing

Who is the idiot that said Cairns pay no rent for their venue? It's actually just over $20 000 per game for them to hire the venue. I suppose all the convention centre workers are working for free as well? Cairns are doing well because they actually pack their arena even as they struggle because people up here love their team. The big city teams with their millions of people are an embarrassment the way the can't even pay their venues and look at the top 4 they are all big city markets.. Stop traffic the next time Melbourne get a sell out in their massive 4000 seat arena!!

*pack their venues

Does anyone have any actual info that is reliable that the Crocs and Hawks are gone next season?

No. None exists. People are, as usual, making things up.

Reidy's said they're not getting nearly as many people at the games as they need, and there 'may not be a second year', and Wollongong's major sponsor has gone bust, so there is genuine reason to be concerned, but there's been absolutely nothing thus far to indicate that they won't be around.

Wollongong's lost sponsor was replaced. Crowds would be a concern though.

New ownership group consisting of some pretty wealthy people take over the league because they werent happy with BA's direction, then they state their goal is to expand significantly.

It would be very odd if they let two teams fold after one season, especially when they appear to be reshaping the league in two years to become what the TV network(s) are after, hence reducing the strain on teams to be independently sustainable.

^ The break-even is that high because they're funneling a lot of dough into their basketball program (and marketing). It's not that they can't make money off the venue, its that they are leveraging their ability to make money off it.

I'm talking about things like training programs, exercise equipment, support staff, recovery facilities, things like that. Not ehrmagerd, cheating cap!

Before we get carried away with the Cats "break even" number, lets remember its come from Nick Marvin, who will say what needs to be said in order to get the people through the door, or sponsorships on the table. Not saying that is a bad thing...

paul, I wondered if they'd relocate teams rather than prop them up where they are?

Also wondered whether the league could look at sending someone to work F/T in marketing/whatever for 1-2 struggling clubs at the NBL's expense. Rather than, say, throwing money at them to prop it up, give them equivalent support that maybe improves their office output and gives the NBL more direct influence.

There was a story a while back about a concept along these lines where a foreign power would effectively run a SEZ of a troubled country and hope the expertise rubbed off. I think the pilot program was in Madagascar. OK, after a lot of googling, here it is - Paul Romer's "Charter Cities" concept. For anyone too lazy/rushed to read it, one example given is of Hong Kong vs China a decade or two ago. Under "enlightened" control, HK flourished while China took longer to come to the party.

A delegate from the Wildcats, for example, could show up in Townsville with superior systems and gradually refresh the way the Crocs were doing things.

I am saying that if the Wildcats sponsorship from Healthway ended tomorrow then I'm foolish enough to believe that with the Wildcats in a far more attractive situation than when the contract was signed and corporates would give an even greater $ amount as there are massive companies out there that have to see that Wildcats having 10k+ fans atleast 14 times a year seeing their product not to mention the sale of merchandise and I do think Perth can afford to be choosy and Ennis has made the game more attractive... Lets hope it rubs off on the other teams.

True. That opportunity will come to the Cats once their deal with Alcohol Think Again expires. And no doubt they are in a much better position now, for greater sponsorship opportunities.

I still think that what Healthway are putting in is quite a significant sponsorship regardless of how much the Cats have improved off the court and they won't be wanting to end that anytime soon. In fact, I'd bet they would be keen to extend their contract with them and get more money off them rather than have to find a new sponsor willing to pay the higher amount.

Also, things might be good now, but if hard times hit the club, they will want to be as loyal to their sponsors during the good times so they will continue to support the club if the tough times return.

Wollongong will survive - alwats have, always will.

15,000 what? PA doesn't seat 15,000 if that's what you're trying to say.

It can be reconfigured to seat around 8,000, which is probably what will happen in the even crowds decrease.

What do you mean by "reconfigured"?
Is that code for "they have extra curtains that can be deployed"?

That, and possibly folding away some of the retractable seating.

"Koberules. Perth arena hold 14,500."
No, it doesn't. It holds a maximum of 13,710 in basketball mode, with the top tier open. Unless it's a special occasion, the top tier is curtained off, bringing attendance down even further.


Lowering capacity lowers the required staff, which lowers the cost of hiring the venue.

I can't imagine 12,000 is their break-even point on a game. The highest attendance they've ever got with the top tier blocked off is 12,381, which wasn't far from a sellout. Can't imagine it seating more than 12,500 at an absolute maximum in that setup.

Yeah, I do remember a considerably lower break-even point being listed. It was still high, but I think it was actually a little below the 10k mark.

I don't doubt for a moment that Healthway would resign with the wildcats in the sake capacity and yes it has a lot more to do than bums on seats and success on court...

The rest of the league might think we are mugs but lets face it the NBL is full of exemplary citizens that I'm sure the AFL/NRL would spend a truckload of money getting their sportspeople with the same reputations as NBL players have... So a brand like Healthway would be silly if they didn't try and sign with Perth once again.

Does anyone disagree with that statement ?

The other thing about the Wildcats' break-even point: tickets are between $10 and $290. How can you even set a break-even number?

I have absolutely no idea how you set a break even number Koberulz, the again I'm not sure how you'd do that for any of the other teams.

To me I look at it as an empty seat and not as 'oh that is $70 they are missing out on' or 'wow there must be a dozen $20 seats that aren't filled'. I'd just like to see every seat filled and if that is from the opposition (even if they are Tigers supporters who run on the court after a win) then so be it!

Anon,

I don't like Healthway/alcoholthinkagain as sponsors since it's our money, the taxpayers.

Further to that point:

Out of all the uses for tax-payer money, you are really going to argue about it going towards sponsoring sport ?

I thought tax-payers money going towards unemployed people on the benefit (who have no intention of ever working) or the other thousand uses it goes towards (which are more controversial) would anger you more...

MACDUB, eventually I think it's inevitable (10-40 years) that we'll see people given a regular payment by default with no expectation of work interest or proving disability or any means testing. It will take people a long time to get comfortable with that though.

In Utah, they've been literally giving homes to homeless people. It's costing them less than supporting/policing the original situation, and homeless numbers are significantly down.