Sunday, 10 February 2013

Expansion on my mind


A recent article in the Townsville Bulletin quoted NBL legend and current Townsville Crocodiles General Manager Pat Reidy as saying that he believed the league should ultimately be a 10-team competition.

"I would like to see the league get to 10 teams and just sit back and work on the product for a while rather than rushing into any expansion," Reidy said.

"Getting to 10 teams, playing each other three times with a good 30 game season and then really work on the product.

"I think that's a good round number to sit on for a while and see what the future holds."

Interestingly however the man he replaced at the helm of the Crocs, former CEO Ian Smythe, advocates a far more cautious approach to expansion.

“The league is not ready for expansion yet beyond Brisbane, the league as a whole needs to be humming to expand,” Smythe tweeted recently.

Which raises the question of just when and where the NBL should expand?

Basketball Australia sent a clear signal that they would not be rushed into expansion when they recently rejected a formal bid for a second Melbourne team.  Given Melbourne was one of two priority markets that BA has previously identified publicly, that rejection came as a surprise to many.

Yet the bid group simply hadn’t secured the financial backing necessary to convince the BA Board that it was a long-term proposition. 

BA CEO Kristina Keneally made it clear that if anyone was going to get a new license, they would need to show that they had the sort of business plan to ensure they would be around for the long haul.

"In the past we've seen clubs fail to survive. There's not a big margin there," Keneally said in an interview with AAP.

"I would rather say no to an expansion that might give us a year or two of excitement, but ultimately would disappoint fans and other clubs.

"Expansion is critical to the future of the NBL ... but it requires a team to have a sustainable financial model."

Whilst major metro markets are what BA has publicly said they will focus on, Board member Andrew Gaze makes it clear that he believes the NBL shouldn’t just be looking to the bigger markets for future teams.



"Brisbane. Another team in Melbourne ... certainly Sydney you would expect could be able to sustain two teams," Gaze told AAP.

"But ... places like Newcastle, Geelong, Hobart (could field teams). Those areas that have had past experiences in the NBL.

"If the model is right and the formula is right, then I don't know why there can't be teams in those areas as well.

"There's certainly been enough evidence to say cities and towns of that size can support a team.

"Those towns have got tremendous passion and the regional teams usually get great exposure - look what happened in Cairns and Townsville."

Whilst Gaze makes a valuable point in the argument about expansion by pointing to there being a pre-established fan base in former NBL markets like Newcastle, Geelong and Hobart, he also ignores one inconvenient truth.  That is that all of those markets have already failed to sustain their NBL teams, which is why they no longer have one.

For that matter, the two anointed priority expansion markets for the NBL – Brisbane and a second Melbourne team – have also previously hosted failed franchises. 

Expansion back into Brisbane is however a no-brainer.  It is the third largest city in Australia and has a population almost twice the size of Adelaide.  It has a huge potential viewership market which can significantly boost NBL audience figures for its broadcast partners, and is also home to an increasing number of corporate headquarters for major companies which could be potential sponsors.

Adding Brisbane back into the mix gives the NBL a truly national footprint once again, so it is going to happen. 

It’s also understandable that Melbourne is high on the agenda.  Victoria has by far the highest number of registered basketball players of any state in Australia and is a perennial powerhouse at national championships of all levels.

Yet it is worth remembering that no state has had more failed NBL teams than Victoria. 

The traditional argument for a second Victorian team is that Melbourne needs a second club as a large percentage of the basketball community simply refuse to support the Melbourne Tigers because they play against them at the junior level.  Yet no one team has managed to successfully enter the Melbourne market and stay the course, which must undermine the prevailing logic that the Victorian capital – as the acknowledged basketball capital of Australia – can support a second Melbourne club.

There are those that will argue that the last ‘other’ Melbourne team – the South Dragons – were a success.  After all, they did win the NBL title in their final season, averaged better crowds than the Tigers and weren’t forced out of the league due to financial problems like most of their predecessors, but instead chose to exit.

Yet the Dragons had publicly stated that they had regularly run at a financial loss.  They relied on the deep pockets of their ownership group to keep operating.  If they had been profitable in their title-winning season you could be fairly confident that they would have reversed their principled stance and chosen to remain in the league.

So no one has yet found the magic formula for a successful second Melbourne team. Does that mean it doesn’t exist? Of course not, but ultimately it doesn’t matter. 

Basketball Australia is committed to a second Melbourne team, just as they are committed to a new Brisbane franchise.  The good news is that Keneally, Gaze and co. won’t fast-track license applications towards that goal, but instead are committed to the less popular course of waiting until the right business models are presented with the right financial backing. 

That may not be music to the ears of Brisbane Bullets fans eager to see their team back in the league, but it is absolutely the right approach if you want the new clubs to have the best possible chance of long-term success off the court.

Whilst we know the two markets that BA are focusing their attentions on, things don’t always go to plan.  If they did, the NBL would already be back to a 10-team league with Brisbane and a second Melbourne team in the fold.  Ultimately, any and all license applications will be considered on their merits by the BA Board. 

Which raises the question of just where will the next new NBL franchises come from?  I run the ruler over all the cities so far thrown up as possible locations of new NBL teams and rank them in the order that I would admit them to the league, as well as assessing the likelihood they will actually win a license.


1. Brisbane
BA have put their money where their mouth is towards reintroducing a team into Australia’s third-largest population centre.  They have thrown their support behind the bid to bring a team back to Brisbane and are actively trying to bring together a number of interested parties into one, focused bid group.  The appointment of former Brisbane Broncos CEO Bruno Cullen as bid chairman and ex-Queensland Olympic Council executive director Michael Brierley as the bid's full-time chief executive was designed to help unite the formerly disparate groups who had previously expressed interest in reloading the Bullets, and attract the financial backing required to bankroll an NBL team.  BA is also actively helping to lobby the corporate sector in support of this funding.  When this is eventually secured, Brisbane will once more have a team to support in the NBL. Hopefully this will be sooner rather than later.
Chances: Definite

2. Canberra
Whilst all the talk of new NBL teams has been centred on Melbourne and Brisbane, Canberra was a foundation club and three-time league champion.  Canberra also happens to be the national capital, home of federal politics (and politicians) and the eighth largest city in Australia in terms of population (420,000).  Whilst that population drops significantly when parliament isn’t sitting, it is still a city with a proud basketball heritage and sufficient potential fan base to support a team.  You also cannot underestimate the potential benefits of playing regular games in front of government politicians.  Certainly, when I suggested Canberra as a strong location for a potential NBL team on Twitter a few weeks ago, this benefit was questioned. It was pointed out that playing in Canberra hadn’t helped the Capitals and the WNBL.  Yet they play in a very different league with far less audience, and I would argue that the WNBL might not have retained its long-running ABC-TV partnership if the Caps weren’t in the league.  Do I expect to see a Canberra–based team in the NBL in the next couple of years? No. Yet I still believe it should be a priority market for the league and could be extremely successful (with the standard asterisk of having the right model in place).
Chances: Maybe

3. Melbourne 2
A second Melbourne team seemed ever so close midway through 2012.  A bid group, consisting of a good mix of business-minded corporate professionals and sharp basketball minds, had drawn up a solid business model and identified a venue to play in (the State Basketball Centre in Knox).  Ultimately the group were let down by their financial backers.  That sent them back to the drawing board, but the NBL remains committed to a second Victorian team.  The Tigers will only have a monopoly in Melbourne until suitable financial backing can be found. That being said, the move to reintroduce a second team to Melbourne must be done carefully so as not to undermine the Melbourne Tigers’ efforts.  It will also need to include a model that will allow fans of all former Victorian NBL teams to support it against the Tigers.  That’s far easier said than done. 
Chances: Definite

4. Sydney 2
There has been very little talk of a second Sydney team, yet the New South Wales is the single largest city in Australia with 4.6 million people.  Whilst the West Sydney Razorbacks never really managed to achieve the off-court success everyone hoped for, they did show just how good a cross-city rivalry could be in Sydney.  The 2004 NBL Grand Final series between the Razorbacks and Kings was an all-time classic and brought an amazing buzz to the Harbour City.  The Kings are however still re-establishing themselves in Sydney and there are many who believe that a one-team, one-city model is the best option for the NBL.  Yet there are some truly massive basketball centres in western Sydney and if a model could be established that galvanised the inherent interest in basketball in that area, a second Sydney team would certainly be of interest. 
Chances: Maybe

5. Newcastle
Called by some the spiritual home of basketball in Australia, Newcastle has had two previous NBL incarnations.  First came the Newcastle Falcons, a foundation club that folded in 1999.  Then followed the Hunter Pirates, who were in the league for three seasons from 2003 to 2006.  Hopes of the return of an NBL team to Newcastle were raised a few years ago when local mining magnate Nathan Tinkler indicated an interest in purchasing a license through his Hunter Sports Group. Those hopes have however suffered a significant blow following Tinkler’s recent well-publicised financial setbacks.  There is however strong support from the Newcastle Basketball Association for a license bid, and certainly, with a population of over half a million people, the market size should be capable of supporting a pro team.  If Tinkler can engineer a return to his high-flying fortunes, it is not outside the realms of possibility that the Falcons could fly again.
Chances: Maybe


6. Hobart
Whilst adding Brisbane would, as I said earlier, allow the NBL to move back to a truly ‘national’ competition, one state still remains unrepresented – Tasmania. Hobart (population 220,000), Devonport (85,000) and Launceston (110,000) have previously had NBL teams and Launceston actually won the NBL title in 1981.  Yet since the Hobart Devils were punted from the NBL in 1996 due to financial difficulties the Apple Isle has been without representation in the league.  There are however currently two Tasmanian teams in the SEABL – the Hobart Chargers and North West Tasmanian Thunder.  Both have had their share of success in that super-competitive league and have dedicated fan bases.  Clearly, Hobart is the largest market and there is reportedly strong local government support for an NBL license bid there.  The population of Hobart is also larger than that in both Townsville and Cairns.  Yet to be truly successful, a Tasmanian club would harness the complete support of the Apple Isle and that is difficult.  There is a strong North and South divide in Tasmania and getting one half of the state to support a team in the other is no easy task.  There is however significant interest in Tasmania in returning to the national stage in pro sports, and an NBL team would certainly be a cheaper option than an AFL franchise.  If Tasmania is to get an NBL team, it will need significant investment to be made in infrastructure first. The bid group would also need to convince BA that there was value in adding what would effectively be another regional-sized market to the league.
Chances: Maybe

7. Geelong
The Geelong Supercats prowled the NBL from 1982 to 1996 before ultimately handing back their license.  They have however since continued to compete in the SEABL very successfully and have the infrastructure in place for an NBL bid in the form of the Geelong Arena.  The city of Geelong has a population of almost 175,000 people, and already hosts a successful pro sports franchise in the Geelong Cats AFL team.  An NBL team could provide the good folks of Sleepy Hollow a Summer team to support.  Geelong’s Supercats basketball team also already has strong community and media support in place and, if they ultimately decide they do want to get back into the league, they are well placed to put forward a compelling case for inclusion. 
Chances: Maybe


8. Gold Coast
The scars from losing the second Gold Coast NBL team are still raw, but there is a reason most of Australia’s pro leagues have placed a team on the glitter strip that can’t be ignored.  It has a population of just under 515,000, making it the sixth-largest population centre in Australia and its growing fast.  There is a somewhat seasonal and transient element to that population given it’s a major tourist destination, yet it is still a very sizeable market.  Restarting an NBL franchise on the Gold Coast would take a lot of work as there were many people burnt by the Blaze.  It is highly unlikely to happen in the short term, but if the league does start to successfully expand, then there is little doubt that a strong bid from a Gold Coast based group would need to be seriously considered.
Chances: Slim


9. Darwin
The Northern Territory has hosted a number of NBL games over the years as well as a pair of pre-season tournaments yet there has been little serious talk of an NBL team there.  Its relative isolation is one factor that has dampened enthusiasm for a Darwin-based team, yet a case could be made for a Northern Territory side. There are 130,000 people in the city (only slightly less than Townsville and Cairns) and basketball is a popular sport locally.  With NBL teams as far away as Perth and Auckland already, a team in Darwin should hold little fear in terms of travel time.  The concern really lies around ensuring there is sufficient corporate support, yet it is not out of the question that the Northern Territory government could be enticed to be a naming rights sponsor.  Getting everyone in the Territory to support a team based in Darwin will be a challenge.  The Darwin v Alice Springs divide is every bit as strong as Hobart v Launceston.  Yet an NBL team would be the first major pro team in NT and it fair to expect that whoever does venture there first will foster significant good will.
Chances: Slim