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The Evolution of Governance in the Australian National Basketball League, 1979–2013

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The Sports Business in The Pacific Rim

Part of the book series: Sports Economics, Management and Policy ((SEMP,volume 10))

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Abstract

The Australian National Basketball League (NBL) first tipped off in 1979, as the product of far-sighted club officials and Basketball Australia (national governing body) administrators who desired national club competition in a sport that was to boom as part of a global social trend. By the early 1990s, basketball was Australia’s fourth most popular spectator sport behind Australian football, rugby league and cricket. Yet the NBL was struggling soon thereafter and today it rarely rises above the level of niche spectator sport, in spite of high grassroots basketball participation and strong national teams. We review the evolution of NBL governance, especially the creation of a league competition organiser controlled by the NBL clubs and Basketball Australia in 1989; the merger of that entity, NBL Management Limited, and Basketball Australia in 2009, followed by the subsequent 2013 ‘de-merger’ and formation of a new competition organiser, NBL Pty Ltd, owned by the NBL clubs and private investors. Along the way, the NBL has experienced regular cycles of expansion and contraction. More than 30 clubs came and went in 35 seasons. The current eight-club competition includes a challenging mix of large- and very small-market clubs, private owners and public ­membership-based entities. Continual financial instability and power struggles between Basketball Australia and the NBL club owners/managers have resulted in a failure to devise a governance model that was a long-term, stable, efficient and profitable agreement between either the NBL clubs themselves, or between the NBL competition organiser and Basketball Australia.

This chapter is a development of R. Burton & R.D. Macdonald, Governance, Regulatory and Fiscal Challenges in the Australian National Basketball League, 1979–2010; presented at the Western Economic Association International Annual Conference (Portland, Oregon, USA, June 2010).

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Notes

  1. 1.

    All reported values are in Australian dollars (AUD). During the era of BA Limited as NBL competition organiser (July 2009–June 2013), the AUD exchange rate fluctuated between US $0.77 and $1.10.

  2. 2.

    The general scheme of the ASC governance principles has been to prescribe an independent board model, that an NSO be incorporated as a company limited by guarantee pursuant to the primary Australian corporate legislation, the Corporations Act 2001, with the (majority of the) board of directors elected by the company members, and the board empowered to exercise all powers of the company excepting those required to be exercised at a general meeting of the company members by the Corporations Act 2001 or the constitution of the NSO. The company members of most NSOs are the state associations and/or the national league clubs. The ASC eligibility criteria for NSO recognition include requirements that a body is the ‘pre-eminent organisation’ for the development of the sport in Australia, that it organises annual national championships or national leagues and has a governance structure compliant with the ASC governance principles. For further detail, see Freeburn (2010) and Hume (2013).

  3. 3.

    Macdonald and Ramsay (2014) compare the finances and corporate governance of BA Limited, Football Federation Australia Limited (FFA Limited, the NSO for association football and A-League competition organiser), Australian Rugby League Commission Limited (ARLC Limited, the NSO for rugby league and the NRL competition organiser) and the AFL. The 2012 annual revenue of BA Limited ($14.179 million) was vastly smaller than that of FFA Limited ($84.589 million), ARLC Limited ($185.668 million) and the AFL ($471.493 million). See Macdonald and Burton (2013) for additional specific financial data and detail on Australian basketball, including comparative attendance and competitive balance trends.

  4. 4.

    Population: The estimated June 2012 population of the eight cities hosting current NBL clubs was Sydney* (4.667 million), Melbourne* (4.246 million), Perth* (1.897 million), Auckland (NZ) (1.507 million), Adelaide* (1.277 million), Wollongong (282,000), Townsville (171,000), Cairns (142,000). Former NBL clubs were based in Brisbane* (2.189 million), Gold Coast (590,000), Newcastle (419,000), Canberra* (411,000), Hobart* (216,000), Geelong (179,000), Launceston (86,000), Devonport (33,000) and Singapore (5.312 million). *Greater Capital City Statistical Area (GCCSA) populations, all other Australian cities are Significant Urban Area (SUA) populations. All values are rounded down to the nearest thousand (ABS 2013; DOS 2013; SNZ 2013).

  5. 5.

    Seasonal Competitive Balance: Mean ASD/ISD for the 1979–2013 seasons was 1.91 for the NBL (35 seasons/mean of 12.2 clubs per season/mean regular season length of 26.7 games), 1.80 for the AFL (35 seasons/14.9/21.9), 1.61 for the NRL (36 seasons, including the 1997 Super League season/15.4/23.3) and 1.29 for the NSL/A-League (1977–2004; 2006–2013=36 seasons/13.8/25.8). Long-Run Competitive Balance: For the same eras, the concentration of league championships as measured by the Herfindahl-Hirschman Index (HHI) was 0.089 for the NBL (14 champions of 32 clubs in total); 0.110 for the AFL (12 of 19); 0.111 for the NRL (12 of 28) and 0.071 for the NSL/A-League (18 of 50).

  6. 6.

    Our earliest available ABF Inc. Constitution is dated 28 March 1998.

  7. 7.

    The only version of the NBL Participants Agreement available for our study was current in ­December 1998. NBL Management Limited also held one of 18 votes in ABF Inc. Board elections. The eight State Associations and the competition organisers of the Women’s National Basketball League and the second-tier nationwide competition were also voting members of the Federation (ABF Inc. 1998, 2002, clause 9.2).

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Authors and Affiliations

  1. University of Melbourne, Victoria, Australia

    Robert D. Macdonald

  2. Syracuse University, Syracuse, New York, USA

    Rick Burton

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  1. Robert D. Macdonald
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Correspondence to Robert D. Macdonald .

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Editors and Affiliations

  1. Seoul, Korea, Republic of (South Korea)

    Young Hoon Lee

  2. Ann Arbor, Michigan, USA

    Rodney Fort

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Macdonald, R., Burton, R. (2015). The Evolution of Governance in the Australian National Basketball League, 1979–2013. In: Lee, Y., Fort, R. (eds) The Sports Business in The Pacific Rim. Sports Economics, Management and Policy, vol 10. Springer, Cham. https://doi.org/10.1007/978-3-319-10037-1_12

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