NBA star Andrew Bogut’s arrival to the NBL highlights an increase in financial investment in the code. (AAP: Kelly Barnes)
As professional basketball undergoes a lucrative renaissance in Australia, the league is grappling with the challenge of keeping an equal playing field between the haves and the have-lots.
- The NBL allows clubs to spend over the salary cap and taxes those clubs for an ‘equalisation fund’
- Illawarra Hawks GM Mat Campbell is calling for more financial investment by the NBL into regional clubs from the fund
- Campbell says increased spending from wealthy club owners is putting a financial strain on his team
NBA superstar Andrew Bogut became the poster boy for a sporting code enjoying a boom period when he announced he was coming home to play in the National Basketball League (NBL) last year.
The former Golden State Warriors forward joined the Sydney Kings on a deal that also saw him buy into the franchise.
Just as society has its rich and poor, so too does the National Basketball League (NBL).
As more money comes in via sponsorship, high profile players like Bogut, and cashed up club owners, a sporting arms race is injecting new life and an unprecedented talent pool into the national competition.
But that spending is creating a gap that is at risk of widening to the detriment of the league’s poorer teams.
“Some owners can afford to lose a lot of money, they’re in the top tier of rich people in Australia or overseas consortiums,” Illawarra Hawks general manager Mat Campbell said.
“We’ve never hit the salary cap but we’ve hit the salary floor [the minimum salary spend] the last couple of seasons.”
The NBL is aware of the situation and is working to juggle the situation with a simple tax seen in many sporting codes.
Former Illawarra Hawks player and now club general manager, Mat Campbell, wants to see greater equalisation payments to his club to make it more competitive. (Facebook: Illawarra Hawks)
The equalisation tax is working: NBL
When the bigger clubs spend well over the league’s $1.43m salary cap, they are taxed on that overspend by the NBL.
That ‘equalisation tax’ is set aside to give a leg-up to clubs that struggle to spend to the salary floor, which is 90 per cent of the salary cap.
The NBL said the figures showed it had succeeded in creating a level playing field.
“Since introducing the system, we’ve had four of the most competitive seasons on record determined by the average winning margin,” NBL CEO Jeremy Loeliger said.
Last season proved a difficult one for the two regional clubs that finished seventh (Illawarra) and eighth (Cairns) in the eight-team competition.
NBL CEO Jeremy Loeliger believes clubs need to take responsibility for their financial security and not rely on payments from the league. (Twitter: Jeremy Loeliger)
A growing financial divide
The Illawarra Hawks has been a beneficiary of the tax, which has been crucial in getting them to the salary floor.
This season, the difference between the salary floor and salary cap will be about $140,000 and Mat Campbell would like to see a bigger slice of the equalisation pie to help his club get to the cap.
“I believe they should invest more into that area,” he said.
“I don’t believe it’s fair on our region, team, or the NBL to expect our owner to keep stumping up to keep up with the Joneses and keep up with the bigger fish in the league.”
The Illawarra Hawks is a privately owned club but, as is the case with all owners, their level of spending beyond the salary floor is at their discretion.
Jeremy Loeliger would prefer to see clubs take responsibility of their financial stability and not rely on the equalisation tax.
“What you don’t want to do is say ‘This is a pool of money to sustain a club in the long term’,” he said.
“You don’t want to incentivise a club to sit on its hands and rely on the fund year-in, year-out.
“It’s also unfair to expect the wealthier clubs to shoulder the burden of the less wealthy clubs to meet the salary cap.”
The Cairns Taipans continue to draw strong home crowds as they plan to move from community to private ownership. (Supplied: NBL)
Regional clubs offer unique flavour to national competition
Despite the financial challenges, Mr Loeliger said he wanted regional clubs like the Illawarra Hawks and Cairns Taipans in the competition.
The Taipans have expressed their desire to become privately owned, moving on from the same community-owned model the Illawarra Hawks used to operate under.
Mr Loeliger said the ability to accommodate smaller markets in the NBL was a strength for the league.
“We’re unique as a sporting code in that we can sustain teams viably in smaller markets because we don’t require the capital expenditure of our competitors [in other sports],” he said.
“With our infrastructure and players, you don’t need to be in a major city economy to keep the doors open.”