NBL boss Larry Kestelman, Hawks owner Jared Novelly, begin court battle with others set to join
Former NBL club owners could join the Phoenix and potentially other current clubs in the legal fight for greater transparency against the league as the case officially started.
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Former NBL club owners could join the South East Melbourne Phoenix and potentially other current clubs in the legal fight for greater transparency against the league as the case officially started in Sydney on Friday.
The legal battle between billionaires Larry Kestelman and Jared Novelly is headed to another hearing in July after the case was heard before the NSW Supreme Court.
In the first discovery motion hearing in Sydney, Illawarra asked the judge to make an order that the stay application and preliminary discovery application be heard together.
The judge rejected this request, instead making orders that the parties return for further directions on July 18, as the NBL sought.
The NBL argued for the case to be played out via mediation, which is the league’s formal process.
It’s written into the license agreements for the NBL clubs that the correct avenue for a grievance is through the Court of Arbitration for Sport.
The Novelly-owned Hawks did not raise the prospect of further plaintiffs joining the proceeding, despite the American businessman having support from other owners.
CODE Sports understands former owners at New Zealand and Brisbane are watching this legal fight with interest and could also join forces to take on the NBL.
Perth owner Mark Arena had previously supported the Hawks’ bid, but it’s unknown if he will officially join the fight.
It comes as clubs who join Novelly’s fight versus the league face footing the legal costs if their case is unsuccessful in court.
Phoenix’s American owner Romie Chaudhari, on Wednesday, confirmed he is supporting the fight for transparency against the NBL, telling CODE Sports: “change is necessary”.
Chaudhari believes greater financial accountability is required to maximise the NBL’s future - a view supported by the club’s co-owners – including Australian tennis star Nick Kyrgios and Boomers guard Dante Exum.
“My main focus is what is best for the future of basketball in Australia,” Chaudhari said.
NBL will file evidence in opposition to the preliminary discovery application by June 20, before filing a stay application and any supporting affidavits by June 20 and Illawarra will file evidence in reply by July 11.
The parties return to the court for directions on July 18.
The NBL will be represented by respected commercial law lawyer Jeff Gleeson – who has been a member of the Victorian Bar for more than 30 years.
For over 10 years Gleeson has been engaged as senior Tribunal counsel by the AFL and has acted in anti-doping matters, including the investigation into the Essendon Football Club supplements matter.
He is also engaged as a senior counsel to Racing Victoria, Cricket Australia and is the Chair of the Victorian Bar Sports Law Committee.
In an owners meeting on Thursday, Kestelman urged for calm, saying he will share any information that comes out of the discovery application with all 10 clubs.
He also stressed to owners that clubs were at no risk financially regarding the NBL’s third party companies or transactions.
Kestelman declared he will “absorb all investments and losses personally”, while any profits from third party deals will flow through to the clubs in a win-win.
It’s understood the league also told clubs it intends to expand the competition by adding another team, with a destination still to be determined.
Novelly is taking his concerns, which include a lack of financial transparency and alleged conflicts of interest, to the courts seeking action.
The NBL has labelled the accusations “baseless” and the “truth will prevail”.
HOW BASKETBALL WAR ENDED UP IN COURT
NBL boss Larry Kestelman has vowed to provide the clubs full transparency, telling owners they don’t need to join the legal fight against the league because he has nothing to hide.
On the eve of Friday’s NSW Supreme Court showdown, Kestelman moved to reassure the owners amid calls for change from rival owners.
Illawarra Hawks owner Jared Novelly is leading the charge against the NBL – and has the support of two clubs, including South East Melbourne.
Novelly is taking his concerns, which include a lack of financial transparency and alleged conflicts of interest, to the courts seeking action.
In an owners meeting on Thursday, Kestelman urged for calm, saying he will share any information that comes out of the discovery application with all 10 clubs.
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Kestelman also stressed to owners that clubs were at no risk financially regarding the NBL’s third party companies or transactions.
He declared he will “absorb all investments and losses personally”, while any profits from third party deals will flow through to the clubs in a win-win.
It’s understood the league also told clubs it intends to expand the competition by adding another team, with a destination is still to be determined.
NBL’S COURT BATTLE BROKEN DOWN
IT has been billed as two billionaires butting heads in a heavyweight battle for the control of Australian basketball.
Illawarra Hawks owner Jared Novelly – a Trump loyalist and the son of a late American oil tycoon - isn’t happy with how the NBL is currently being run under leader Larry Kestelman and is taking his concerns to the NSW Supreme Court.
Novelly – via his company Crest Sport and Entertainment - claims a lack of financial transparency, ownership structure and conflict of interest is rife under Kestelman’s leadership and he wants change.
The NBL has labelled the accusations “baseless” and the “truth will prevail”, but all will be decided in court, starting on Friday when the discovery motion is heard in Sydney.
HOW DID WE GET TO THIS POINT?
Novelly has been agitating for change dating back seasons. The American-born businessman wants Kestelman to be more transparent and open up the league’s financial books for everyone to see. Novelly has also questioned a perceived conflict of interest within the league, which has sparked tension between the Hawks boss and the NBL’s front office.
The two billionaires had long fought out their differences in private – until March 21 – when Novelly sent an email to the league’s owners proposing a buyout of the competition.
The email detailed concerns about the NBLCo’s financial transparency, concerns over the sale of the Tasmania JackJumpers and conflicts of interest.
Novelly also proposed the 10 NBL clubs collectively purchase all shares of the NBLCo, with each club owning an equal 10 per cent share.
The email was labelled a ‘hostile takeover bid’ because Novelly threatened legal action against the NBL if the buyout wasn’t pursued.
GRAND FINAL TENSION
The explosive email from Novelly came just days before the deciding Game 5 of the NBL championship series between Novelly’s Illawarra Hawks and the Larry Kestelman backed Melbourne United.
This naturally created significant tension leading into the big game at the Wollongong Entertainment Centre.
Kestelman came out on the offensive, categorically stating that the “NBL wasn’t for sale”.
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— CODE Basketball (@codebballau) March 25, 2025
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He also received strong support from across the NBL and other codes – including former Collingwood president and media mogul Eddie McGuire.
Novelly and Kestelman exchanged a ‘frosty’ handshake that lasted just seconds prior to the Game 5 decider.
The Hawks went on to win the game and the title but Kestelman didn’t present Novelly with the NBL championship trophy.
He later reinforced to Code Sports: “I have no intention to sell the NBL – that is our focus”.
FIBA ENGAGED:
Just weeks after Illawarra’s historic second NBL championship victory, Novelly sparked up his bitter battle with Kestelman via a letter to FIBA .
In the letter, which was also shared with the clubs, the Hawks owner claimed Kestelman’s alleged conflicts of interest and violations of the FIBA Code of Conduct should result in a suspension while an investigation takes place.
The message in the letter was clear. Novelly stated that Kestelman possesses “a remarkable accumulation of power by one individual within a league and its teams” through profit via his own business dealings and companies.
In contrast, the NBL’s teams are left to scrap for survival, receiving a disproportionately small share of NBL’s net profit 5 (i.e., only 2.45% per team), which is insufficient to cover operating costs, is financially unsustainable for most NBL teams and is also much less than what the profit share for teams in comparable leagues is.”
Crest alleges the NBL has breached its licence agreement by failing to disclose third-party transactions to companies owned by Kestelman.
Egger – in his letter to the clubs - said FIBA had asked Basketball Australia to resolve the allegations.
He believed Basketball Australia had conflicts of interest with Kestelman via his ownership of the WNBL and other partnerships, but hoped the body will properly investigate the allegations.
“We know Basketball Australia is focused on ensuring the success and integrity of the game in Australia,” Egger said.
“We intend to engage with Basketball Australia to understand how it will ensure any investigation is conducted in a thorough, transparent and independent manner.”
Novelly’s bid for FIBA action failed, with the sport’s global body referring the investigation back to Basketball Australia because it didn’t fall under their jurisdiction.
In a further hurdle, BA has also told the Hawks to reframe its complaint in line with its national integrity framework.
WHO IS SUPPORTING NOVELLY?
South East Melbourne Phoenix’s American owner Romie Chaudhari has confirmed he is supporting the fight for transparency against the NBL, telling CODE Sports: “change is necessary”.
Chaudhari believes greater financial accountability is required to maximise the NBL’s future - a view supported by the club’s co-owners – including Australian tennis star Nick Kyrgios and Boomers guard Dante Exum.
“My main focus is what is best for the future of basketball in Australia,” Chaudhari told CODE Sports.
“Therefore I do believe change is necessary to achieve true sustainability and I’m guided by my core beliefs of honesty and full transparency in business.”
Code Sports understands another majority team owner – understood to be Perth - is also in support of Novelly.
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