National Basketball League owner Larry Kestelman sells share of Melbourne United for $4m

NBL owner Larry Kestelman is offloading part of his stake in Melbourne United and has declared the league is in good shape, and attracting ‘credible’ investors.

Richest 250 member Larry Kestelman and the buyer of his stake in Melbourne United, Aaron Sansoni. Picture: Alex Coppel.

National Basketball League owner Larry Kestelman has sold a 10 per cent stake in Melbourne United, valuing the club at $40m.

The deal, to be revealed on Wednesday, is with Melbourne entrepreneur Aaron Sansoni. It is at least the highest yet for an NBL club and roughly in line with similar valuations for the Sydney Kings and Perth Wildcats clubs.

Sansoni, an entrepreneur with dozens of private equity investments in Australia and overseas and a fast-growing business mentoring arm, is buying 10 per cent of Melbourne United for $4m. The club was previously valued at $30m.

Other NBL investors include Robyn Denholm, the Tesla chair who part owns the Sydney Kings with colourful sports entrepreneur Paul Smith, and Craig Hutchison’s ASX-listed Sports Entertainment Group that majority owns the Perth Wildcats.

Kestelman, a member of The List – Australia’s Richest 250 who has owned the NBL competition itself since 2015 when he made a $7m investment in what was then a struggling competition, maintains a 15 per cent stake in United for now.

He said the deal and its value was a testament to the NBL’s growing status as both a sporting competition and a legitimate commercial investment.

Larry Kestelman is the owner executive chairman of the NBL. Picture: Nikki Davis-Jones

“We have credible people backing the league and backing the sport now,” Mr Kestelman told The Australian. “Basketball is the second biggest sport in the world and we think we are the second-best basketball league in the world (behind the giant National Basketball Association in North America), so there’s definitely a good foundation there for growth.”

United will play the Illawarra Hawks on Wednesday evening in a sudden-death semi-final on the club’s home court, after finishing the regular season in first position on the ladder.

Mr Sansoni, who grew up in suburban Melbourne, said he wanted the deal to be a long-term investment.

“I’m a lover of the sport first and foremost. I grew up playing, and going to training camps as a kid. And if this was an opportunity in a sport that I was not familiar with and didn’t love, I wouldn’t invest in it,” he said.

“I met Larry a couple of years ago and we’ve been talking for a while. But seeing what he has done with the NBL since 2015 and taking my basketball fan hat off and looking at it from a business perspective, If you were a retailer or a software platform that has experienced the same growth in that time it would be incredible let alone a sport.”

Melbourne United captain Chris Goulding during the NBL semi-final playoff series match against the Illawarra Hawks at the weekend. Picture: Getty Images

Mr Sansoni said his business nous could help United strengthen relationships with fans and members and help make the match-day experience even better for crowds.

“We are effectively a seasonal business and I think there are off-season opportunities that we can build, using our culture and avid fanbase, looking at how we can add value for our members; not only what we sell them but also how we can reward them as well.”

Mr Kestelman said the NBL was now at about 86 per cent of stadium capacity across the league during the season and that television viewership on ESPN, Foxtel, Kayo and free-to-air on Network 10 was up about 30 per cent this year.

“We’ve had 16 per cent growth in crowds this year and as there’s less capacity as demand grows, then there are clearly opportunities for more revenue,” Mr Kestelman said.

“With that and growing distributions to clubs – and we’re committed to either distributing 25 per cent of our net media revenue or 25 per cent of our net profit, whichever is higher – then it becomes a better investment for our owners.”

Mr Kestelman is trying to find buyers for the Hobart-based Tasmania JackJumpers at a hoped-for valuation of about $30m and a substantial local ownership base. Talks are ongoing and the JackJumpers are playing Perth in the other sudden-death semi-final on Wednesday night.

He also said he would expect the NBL to have “two to three new clubs in the next five years” and was working on more commercial and sporting links with basketball leagues and clubs in Asia, including Japan and China.