Very convenient title should help the sale along.

"Very convenient title should help the sale along."

What a stupid comment. Of course he's going to sell the club when the club can actually be sold.

Boti said in a post recently that LK has spent $30+ million on the NBL.

I hope without the connection to Tigers/United LK still continues to invest in the league as he's done an outstanding job thus far.

Some interesting info regarding the TV package they're trying to sell. Packaging the NBL coverage with the 2 Boomers vs USA games is a clever idea.

Also interesting to see the mention of a 43% increase in "cumulative TV audience" for this season over last. Would that be the addition of the SBS and ABC coverage? Were they both additions this season?

BTW, the Foxtel ratings for Game 5 of the GF series were 49,000. Another good figure after the 53,000 for game 2 I think. So the cumulative number for Foxtel across the 5 games would be over 200,000. I don't know what SBS and ABC got but I expect it would be of the same order. Add in NBL TV and you'd be approaching half a million across the five games.

LK = Legend

Very convenient title should help the sale along.

nah ... i'm all for it, got my V8 commodore for $200 off gum-tree last year , now that I've put almost roadworthy tyres on it and registered it , its worth $400 ..... now thats a 200% profit ! Eat that LK !

It's a smart time to sell United with strength success and potential.

I’m a little concerned if LK has spent $30million - how long does that kind of spending cut it as a wing of his company for tax writeoff purposes?

I need to slightly correct myself Boti said "close to" $30 million.

On May 28, 2015, Larry Kestelman's initial $6million commitment to save and restore the NBL to previous prominence and then beyond, was revealed nationwide.

(By now the league’s "executive director" has put in close to five times that amount.)

Anonymous
Within the hour
21:03 8 Apr 18

hey Hey HEY !, no need to be aggressive and un-hip - , can i get the hook back - I think you took it along with the bait and all :(

PS: you forgot to count the $750 rego cost, so its actually a four figue loss in total - but then you are anonymous lol

I wonder if this is the knife edge. Could quite feasibly go one of two ways:

1. He sells which removes the governance concern, an AFL club buys in with Bogut, the co-opted Boomers/NBA TV deal underpins all NBL clubs long enough for them to galvanise and take the next step league-wide.

2. He's overspent more than he expected he'd need to, the Melbourne sale doesn't go quite as hoped, the Brisbane sale not at all, winning a championship deadens some level of his interest, the league continues to struggle in a competitive media/sponsorship landscape. Drop the spending, and they're overwhelmed on many sides - broadcast/personalities, 3x3, merchandise, etc - that sort of stuff can't be maintained on the cheap with the polish they've put in.

Unfortunately, the linchpin is probably the United championship and it can exert pressure on either side of the knife. Gives him confidence to sell, or gives him an excuse to bail.

This has always been the risk. Hopefully it pays off.

he believes could value United about $10 million.

I wish I could win a big lotto and then I could fathom how much $30m is... I could even buy that V8 commodore that was advertised on here

1. He has spent a shit load, to pull out now would be dumb business going by the numbers thrown around.

Jack Toft, please tell me where you can get 5% interest on term deposit, I'd love to invest

Bet he thought he could do this a few years ago but things weren't going to plan. Probably why the soft cap/ fund redistribution was shelved. Build up United with an unfair advantage then sell when they're on top. The fund redistribution would have helped out too many other teams.

A lot of people getting around with big loads of money looking for something else to do besides running their business.

You don't by a Basketball team because you want to make profit. You buy it because you can. If you looked at professional team owners around the world the far majority are a couple of rich people who want to own and follow something or x-players who still stay attached to the sport directly.

I like basketball, I like it a lot. However I don't have a few spare mil sitting around, hence I am not a NBL owner. However if I had a business which could allow me to blow 5mil a year on whatever luxury I could have, then I would buy a team.

Larry keeps his stake in United = people bitch and moan

Larry wants to sell his stake in United = people bitch and moan

Can't please all the people all the time...

I can definitely see where you're coming from with the knife edge, Isaac, and I'm usually a glass half empty sort of person, but you'd think that after everything LK has sunk in and the effort he's putting in still, that he's got at least another season in him, especially if he can sell his stake in United and remove the conflict of interest with them (I think the league being in control of the Bullets is a different kettle of fish, as without them that would mean no Bullets) then that will open up the door for expansion...

He's doing the right thing and I hope it all works out... Putting a public number on it could be dangerous, and I agree that his ability to sell United could be the key to whether he stays and commits more time and money, or he pulls the plug...

Cash out at the right time!

THen build up Brisbane for a sale in 12/18 months time whilst still owning the league all the assets play in!

Its like being the landlord of the only apartments in town the assets are really only worth what the owner says they are!

If Hawks plus 1 other franchise come in the league itself will be worth alot of money and generate good revenues via league wide sponsorship thus LK could sell it back to the clubs are keep it as a private investment.

Note that he says "I am looking for some savvy business people to buy 5% each" - so he's not expecting some individual to drop 10 mil.

He also says about United "We have got it to the stage where it is a break-even proposition" - which to me is a slight worry considering their great crowds and success this season.

Quote from LK in that article about the profitability of Melbourne:

"I am looking for some savvy business people to buy 5 per cent each of the team, so we can have a good collection of people that know business and think about this as a business proposition as well. We have got it to the stage where [it] is a break-even proposition and I think those that come in will be able to take it to the next level and have a profitable team that ends up being a good investment for them as well."

LK will gain all his NBL loses back on the Boomers games

50,000 people by 2 games at a net average of $100 per ticket is $10,000,000

TV rights would be in the $10,000,000 range

Uh, I doubt that very much, particularly if packaging at a loss to secure NBL season coverage.

Sounds like smart business moves to me. Get out of areas of basketball that are unprofitable (ie. Owning teams), move into areas that are (Selling gear to kids through kmart).

Uh, I doubt that very much, particularly if packaging at a loss to secure NBL season coverage.

I'd also be interested to see the calculations and find out how the $10 million figure was arrived at.

Business valuations differ depending on industry and a variety of factors, but typically there's some kind of "Times earnings" approach somewhere.

As stated above, if they aren't making a profit then really- what are they worth?

If you had $30 million in the bank, would you spend $10 million buying a business that was just breaking even?

Look, I don't want to sound pessimistic but the reality is sports rely on people like LK who are doing it for the love.

Most AFL clubs make profits- but often this is due to other business interests such as pokies.

Most NRL clubs lose money. Most A League clubs lose money.

I'm just hoping LK stays on for as long as possible.

Definitely smart by LK to try to sell high, but if anyone pays anything near 10 million for United they must be the ones that are high.

Even the hypothetical invetors buying 5%; 500k for 1/20th of an NBL team would rank as one of the worst investments of all time.

I think it'd be crazy to buy in now too. But Melbourne is big and (at present) has one NBL team. Maybe the intersection of basketball and Melbourne is a reasonable enough size that you're bound to get wealthy and keen people who aren't very fussy about $500k.

Maybe. But in the past 500k entry would give you a great deal more than 1/20th of a club, and with the history of the league, would you put that kind of cash into something that you could potentially have no real control over? I can understand someone putting up a mill or 2 or even a bit more to run a basketball club for fun, but ad valued, that wouldn't get you close to a controlling share, and I'd think thats a big sticking point

Hell, if he were willing to give it away for half that I'd be interested. They're going to be the benchmark team in the league for the foreseeable future and will become profitable

Investor is probably not the most accurate description. Most people that can entertain buying a sports club are usually savvy enough to know that there is almost no ROI. At best its a tax offset.

Are there enough buyers in Oz?

Cairns and Perth are two I know of that turn a profit

Not being profitable is fine for a couple of wealthy investers who want their own club. But for someone wanting to buy a 5% stake? Again, you're not going to have control.

What happens when the rest of the investors start making decisions that make a decent tax loss into something worse? What happens when a few investors go broke/ opt out and more can't be found?

If you have a controlling interest these issues aren't as big of a risk, but puttingg half a mill of your cash into the hands of others makes it a much bigger risk

"
LK "doing the right thing" would have been divesting his Melbourne interest before taking over the league.

"

Oh, you mean back when no one would have bought it because there may not have been a league the season after?

Fantastic idea!