I was going to make a big post analysing the first year of the LK era and all various aspects of the NBL. I still might do it, but it'd be quite time consuming.
I'll say this though:
The NBL a touch over 12 months ago had about 3 "sponsors" - a TV network who didn't even want to be there (Ten), a physical basketball sponsor (Spalding) and a clothing provider (ISC). It had Adelaide on the edge of financial issues, it had Wollongong and Townsville both in genuine financial trouble.
NBL had a very consistent history of mismanagement, teams folding, no marketing plan, whatever reach it had was seriously underutilised.
What happens? Nobody wants to show that on TV and nobody wants to sponsor it and nobody wants to invest because it's a crappy unpopular product that not enough people care about (save for the player talent which was adequate and small core base of supporters). If you've got money and you're a business person - why would you put money into that product? You wouldn't. Hence the issues.
Effectivey, it becomes an unsustainable product in its virtual entirety and a catch-22 for attempting a circuit breaker and trying to improve it.
But then, LK comes along, believes there's potential, pours money in and *takes control* so that at least he can attempt to make the most out of his investment and its not subject to the incompetence of others.
This is where the ripple effect starts to come in. It seems clear that LK has focused on pouring money into ensuring.. at least short term:
1. Financial stability for the core capital city teams
2. Introduction of a major market (Brisbane)
3. A fully fledged marketing plan including TV ads, radio, newspaper, billboards, community outreach programs
4. Luring greater and international talent to Australia that might draw crowds - improving NBL's coverage and legitimacy.
Given this, it gives sponsors reason to put money into a surging and currently undervalued product with a confidence of stability and good management for at least 2-3 years.
LK, for his efforts appears to be making short term sponsorship deals with the intent on continuing partnerships to ensure he maximises the value of contracts - effectively backing his ability to improve each year, while sponsors see it as security that they can back out if things don't go so well. Suddenly it becomes an attractive risk/investment for businesses.
Now we've got Chemist Warehouse, Telstra, Swisse, Virgin, Ladbrokes, Westpac, AHG, Europcar, Hoyts, helloworld to go along with suppliers mitchell & ness, wilson, champion, mcdavid/shock doctor, alcatel and LK's own newsmodo & cmsaustralasia. Those are some well known brands, and that gives added confidence to the product knowing these businesses are willing to associate themselves with the NBL.
Then ofcourse, when you've got stability, marketing, sponsors willing to invest in the product (not necessarily purely monetarily), it gives broadcasters a reason to want the product as well - so now we've got Fox Sports, and had Channel 9. This has a ripple effect of giving added value to the sponsors - this is a good version of catch-22, broadcaster confidence means more sponsors, more sponsors means broadcaster confidence.
When you've got increased cashflow, sponsors and broadcasting you see greater ability to reach more people and get them immersed into the product, greater crowds etc. This makes it easier for teams to have bigger crowds, greater marketing reach and more sponsors, allows for better players which again draws more sponsorship and crowd (another happy catch-22) which in turn gives more stability, potential and confidence, giving reason for people to invest into teams as owners. This is where we see a bit more stability in Adelaide and Illawarra because they're more capable of finding more owners/investors and more sponsors.
This is what really does create the sustainability. The overall plan and idea is a good one, and it's a direction that does espouse confidence.
Now, the issue then becomes:
1. Is the maximum potential of places like Illawarra and Cairns capable of being sustainable given the increase expenditure of bigger market/bigger money clubs?
- Is the population big enough to have the crowds required to be a successful club in a big city league in 3,4,5,6 years time etc.
- Is there enough sponsorship dollar required to be a successful club in a big city league in 3,4,5,6 years time etc.
Cairns are doing well now, but they might wilt as the talent and player salaries increase, requiring them to do the same just to remain competitive. If you're noncompetitive for a long period, that can take a serious hit to sponsorship dollar and memberships and investor confidence.
What's our end game in this respect? Have 2 more clubs go bust?
2. Is the pace at which we are going sustainable?
The LK era does have a bit of 0-100 in rapid speed effect to it. It's understandable in many respects as outlined above.
It's great that we have a few clubs who can spend big, but if that creates a huge disparity, the weaker clubs may wilt quickly and that hurts the league entirely. It's one thing to see a dead-man walking Townsville fold, it's another to see Illawarra, Cairns & Adelaide fall over quickly. This will occur if we aren't careful about it.
On the other hand, having clubs like Sydney, MU, NZ, Perth investing big in the league and bringing in talent does help the lower clubs.
Over the next year or two, the disparity is acceptable if those big teams are subsidising the lower teams and assisting in lifting the overall standard of the talent. However, that's not a sustainable long term direction and the league will need to ensure each team in the league is capable of...
1. Long term financial stability (we can't have any more teams folding - Townsville has to be the last, there needs to be a line in the sand)
2. Capable of spending similar amounts on players and attracting similar level talent.
In the mean time, Adelaide's approach for lack of big spending is a good one - get young exciting talent who could dominate in the future. This is acceptable this year and maybe next year, but if Adelaide is constantly the team with potential without actually ever having the money to keep players and become successful, it will ultimately struggle and become noncompetitive and unsustainable and it will become a product nobody will confidently invest in. This goes for the other sides too.
Ultimately the big spending approach has real upside to it in terms of cash flow, confidence and increasing sustainability. However, there's a fine line between that, and the over expenditure causing disparity, struggle, instability and the league to wilt over its own weight. It becomes a question of direction, pragmatism and good judgment with a little bit of this, a little bit of that approach.
We can't always hold back to the lowest denominator to become sustainable, that slows any potential or growth and in the end diminishes sustainability. We also can't go 0-100 in seeking growth, increased standards and rapid expenditure because that will lead half of the league over a cliff and ruin sustainability as well.
