LaMelo Ball’s pursuit of the purchase of the Illawarra Hawks came as a surprise to many. And while most view it as a smart business decision and a good financial decision, not everyone sees it as a sure-fire deal.
One of the few handfuls of people who would have knowledge of what Ball is getting himself into by owning a franchise is former National Basketball League (NBL) commissioner Rick Burton. From 2003 until 2007, Burton sat atop the NBL as the leader.
But in an interview with Sports Illustrated, Burton discussed the risks of Ball buying a franchise within the NBL.
“…asset appreciation [for basketball teams] in Australia is a lot harder to realize [than it is within the U.S.] and in the short-term there are still costs to cover. Buying an NBL team is much more like buying a boat than an NBA franchise. Team owners pay a certain amount for the rights to operate, but then they have to start paying players, coaches, trainers and rent – and their only real source of revenue is sponsorships.”
Burton went into details about the limitations the league faces. Despite having a land size nearly equivalent to the contiguous United States, Australia’s population is hundreds of millions of people fewer than America’s.
As a result, television deals are cheaper, stadiums are smaller and seasons are shorter. So, while Burton estimates the license to run an NBL team will run between one and two million dollars, the main source of revenue for Ball will be sponsorships.
The positive for Ball is that the affordable price point still makes it a gamble worth taking. Assuming Ball is a top-five pick, he’ll be guaranteed nearly $12 million with third- and fourth-year options that could more than double that figure. That also doesn’t take into account any sponsorship deals of his own.
If Ball does take control of the franchise, it could cast doubt on Big Baller Brand serving as one of the primary sponsors of the Illawarra Hawks given that will be one of the few sources of primary revenue. Being the sponsor of LaMelo Ball’s NBL team will certainly lead to a bidding war of some sort.
All of this adds context to Ball’s decision to attempt to purchase the Hawks. It’s a low-risk purchase given the earnings he’s set to make in his NBA career but is also a relatively low-risk reward.
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