Ten years since a near-death experience, the NBL is as happy as Larry
By Greg Baum
Larry Kestelman had never been to a basketball game until his mid-30s when he and his son, Justin, were invited by a cousin to a Melbourne Tigers game. His mother, Svetlana, came too. It was the start of a family affair.
The Kestelmans were drawn instantly to the game and to the family dynamic in the crowd. Soon enough, he became a club sponsor through Dodo, his startup internet service provider.
NBL owner Larry Kestelman with his mother, Svetlana.Credit: Getty Images
But the NBL’s halcyon days of late last century were a distant memory. Thirty clubs had come and gone, 15 in Melbourne alone. Crowds had dwindled, broadcasters deserted.
When the Tigers were about to go into administration, a bereft Svetlana said to her son: “You’re the business guy. Why don’t you fix the club?”
“She half convinced me, half guilted me into it,” Kestelman said. In conversation with Kestelman, family plays the role of full-stop; it is at the end of every sentence.
Kestelman bought the club and renamed it Melbourne United. Three years later, when the league was on the brink of bankruptcy, he bought that, too. “All the TV deals were lost,” Kestelman said. “All the sponsors were gone except Wilson ball, for $40,000. The clubs asked for help. I said I honestly can’t help unless I have control.”
The Illawara Hawks take on Melbourne United in the resurgent NBL.Credit: Getty Images
Kestelman, a business magnate assessed to be worth $1.3 billion, readily admits now that he vastly underestimated what was needed to resuscitate the NBL. “I originally committed $7 million to rebuild the league, and I don’t mind sharing that I got that very wrong by a factor of manifold,” he said. Others guesstimate that he has poured in up to $50 million.
Then there was the time. “I always believed I would succeed, but it required a lot more effort than I ever thought,” he said. “I probably overestimated my own ability to do it. I thought I was going to spend 20 per cent of my time in the first three or four years. It was 80 per cent.
“All of my other businesses suffered for it. I don’t want to understate the fact that my businesses and my partners very much lost me to basketball.”
Going on 10 years later, Kestelman’s business empire is intact and the NBL is thriving. The composition is stable, the game is available on many platforms, crowds have doubled and staff grown from four to 100. The Perth Wildcats franchise sold recently for $40 million.
“On the global stage, we’re a huge success. Now the league is profitable. I look around the world: in a lot of leagues, every club loses money. I have half the clubs budgeting to be either break-even or better for the year.” For the other half, he is working angles.
“We’ve grown our participation, we’ve grown our fans and more importantly, year on year, we’re growing at 30 per cent our TV audience,” Kestelman said. “We’re now considered to be the second-best domestic league in the world. What we are is the best pathway to the NBA. We have 20 over there right now.”
The traffic is two-way. Through the NBL’s Next Stars program, Americans come here now, not because they are not quite good enough for the NBA, but to learn how to become good enough. This boosts the NBL’s standard.
Notionally, the NBA overshadows the NBL in the way soccer’s major leagues overshadow the A Leagues. Kestelman demurs. When he began, the crossover between NBL and NBA fans was about 10 per cent. Now it’s nearly 80 per cent. “More NBA fans means more basketball fans,” he said.
Also notionally, basketball is Australia’s No.1 second sport, played by many as an adjunct to another, often losing out to the football codes, especially when a talented youngster is forced to make a choice.
Kestelman acknowledges this. “I think that was absolutely a massive problem before the NBL became more professional,” he said. “I think it’s still a challenge that there’s more money in other sports, and that at the age of 15, 16, we do lose talent to other sports,” he said.
“But that’s on us, to become a more inspirational product, and for kids to believe that they will be able to make a career out of basketball.”
Larry Kestelman with his mother Svetlana and son Justin.Credit: Getty Images for NBL
Kestelman was born in Odesa in Ukraine. He arrived with his parents in Australia when he was 11 with two suitcases and no language. His heritage is still traceable in his accent. He recognises the immigrant-made-good motif in his story, but says that is only the half of it.
“Countries like Australia are amazing for opportunity,” he said. “But how bad do you want it? That’s the question. What are you prepared to do? What sacrifices are you prepared to make? This country gives everyone the chance to dream big. I want the same with the NBA. I want the kids to dream big.”
Kestelman has realised his own dreams, in business and basketball. He says the NBL project has been his way of giving back to his parents and this country.
He is proud, but not conceited about it. “I’ve been lucky. I think some people forget that,” he said. “If anyone thinks luck is not involved, they’re wrong. I risked a lot of hard-earned money at this, and I could have failed. I’m not so crazy to say that I couldn’t have failed.
“I risked money, time, effort, reputation, but I really felt it was my job to do it. As my mother said, if you think you can do it, then you have to. It’s not a choice.”
Rows of basketballs sit like trophies on shelves behind Kestelman in his otherwise austere Albert Park office. Seen any way, there’s room for more. Urged by the NBA, Kestelman is looking to push into Asia, either by establishing NBL clubs there or attracting players to Australia or both. The Singapore Slingers joined the NBL in 2006, but at that fragile time in the competition’s history lasted only two years. Kestelman says it will be different next time.
The legendary Lauren Jackson in action in the WNBL.Credit: Getty Images
This week, the NBL partnered with investment company Wollemi Capital to buy the WNBL from Basketball Australia, who retain a small shareholding. The Opals are better performed than the much-vaunted Matildas, winning another Olympic medal in Paris, but the WNBL hides in plain sight. Kestelman aims for the new consortium to replicate the rejuvenation of the NBL.
“There will be tough decisions to be made, there’ll be tough moments,” he said. “We’re going to get some things right, some things wrong, but I’m excited we have the opportunity to actually take the women’s game to the next level.
Larry Kestelman in 2015 at the start of his tenure as NBL owner.Credit: Arsineh Houspian
“We need to build a bigger fan base. Attendances now are anything from hundreds to a couple of thousand people. We need more fans. That’s ultimately what the success of a sport is.
“The success of the women in some ways exceeds the men’s. So the problem is not on court. It’s off court. People will follow athletes, not necessarily just clubs or leagues, so we need to learn how to tell our athletes’ stories a lot better.”
Kestelman is the only man to own a basketball league and a team in it. But he has sold his share of United down to 15 per cent and is looking for a buyer for the startlingly successful Tasmanian JackJumpers. “Our focus is very much on the league, and my intent is to divest long-term of club ownership,” he said. “We want only to do anything that helps the league succeed. But my mum will not be happy about that!”
Private ownership has worked for the NBL, but has an ill-starred history in Australian sport otherwise, and Kestelman does not advocate for it exclusively, saying ownership models must fit their circumstances.
“I don’t think there’s such a thing as a perfect model,” he said. “But the whole world has now actually gone this way, where sport has become a true investment category.
“The history of sport in Australia with private ownership has been too much about hobbyists wanting to be involved with good intent, but not spending the time, the effort and the money needed to run it as a proper business.”
It’s a neglect no one could lay on him. Basketball makes up about 7 per cent of his empire, but he says still occupies 50 per cent of his time. His mother never misses a match, his son, now 30, is all-in, and now there is a grandchild in the bequest.
“I’m more committed than ever. I didn’t work this hard for the first 10 years not to be around for the next 10 years,” he said. “The first five years were not fun. They were super stressful, extraordinarily hard work. Now at least the hard work is combined with joy.
“The job is not done. I look forward to the next 10 years. I hope my mum will still be around then – still going to every game.”
Svetlana is 89. Plainly, long horizons are a family gene.
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