The possible reasoning behind the NBL’s silence on the sale of the Illawarra Hawks surfaced on Monday with a revealing report on the extent of the financial woes the franchise is facing.
An administrator brought in by the league, Michael Jones, to assess the club’s financial standing released his findings and they are grim for the Hawks. Based on the findings, the debts of the franchise total over $770,000 in money owed to players and staff.
From the report (h/t ABC News):
“The Company has a shortfall of assets over liabilities and therefore cannot meet its obligations to creditors. The Company is therefore insolvent and requires a formal insolvency appointment to deal with their financial position.”
Rumblings of financial issues persisted during the season but the degree to which they existed was not fully known until now. The report noted ongoing losses by the franchise in 2016 with those losses totaling $1.7 million between the 2017-18 and 2018-19 seasons.
While finances improved in 2019-20, the club still lost $100,000 despite the arrival of LaMelo Ball. Former owner Simon Stratford cited the unexpected injuries to Ball and Aaron Brooks, an increase in staff salaries and COVID-19 impacting future sponsorships as reasons for the struggles.
Nonetheless, it paints a very different picture for the sale of the franchise. Former NBL commissioner Rick Burton estimated the licensee to run an NBL team could cost between one and two million dollars but that was an estimate without the information presented in the new report.
This report likely will lead to a much lower price to purchase the license, assuming the new owners take on the debts attached to the franchise as well. It adds another layer to the ongoing discussions for Ball and his consortium to potentially purchase the franchise.
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