NBA stars Josh Giddey, Dyson Daniels, back Larry Kestelman in face of NBL’s hostile takeover bid
As the threat of an unprecedented courtroom battle looms large Australia’s biggest basketball star has dished out a withering assessment of Jared Novelly’s hostile bid to take over the NBL.
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As the threat of an unprecedented courtroom battle looms large Australia’s biggest basketball star has dished out a withering assessment of Illawarra Hawks’ owner Jared Novelly’s unsolicited hostile bid to take over the NBL.
Josh Giddey, who is on the brink of signing an eye-watering US$150 million new NBA deal, has publicly backed NBL owner Larry Kestelman crediting him as the reason he and many others have been able to carve out careers in basketball.
“People need to understand - the NBL shouldn’t be touched,” Chicago Bulls star Giddey said of the challenge to Kestelman’s ownership.
“Larry’s track record speaks for itself. He’s turned the NBL into a world-class league, and he’s the right person to keep leading it.
“The growth of the NBL has been nothing short of amazing. It’s respected all over the world now – NBA scouts, players, and fans overseas are watching. That’s a direct result of what Larry has built.”
On the eve of the NBL championship series between the Hawks and Melbourne United, Novelly fired off an extraordinary email to the nine other club owners warning he was preparing to file “multiple actions” against Kestelman’s private company NBLCo.
The son of an American billionaire oil tycoon and Donald Trump ally also proposed in his explosive letter that the NBL return to a club owned and run model and offered Kestelman a paltry $9 million league to walk away.
On Thursday, Novelly escalated his feud with NBLCo by calling on basketball’s international governing body, FIBA, to suspend Kestelman while they investigate alleged conflicts of interest involving the league and his private companies.
That letter, which was also heavily critical of Basketball Australia, prompted a response from the local governing body that said:
“Basketball Australia has contracts in place with the NBL to run the League. It fully supports the management over its time in charge, the NBL has grown and has been very successful.”
The NBL has labelled Novelly’s allegations as “baseless” and Kestelman has vowed to “do everything that I need to do to protect the NBL” that he saved from extinction 10 years ago.
Four-time Olympian, three-time NBL champion and former Perth Wildcats owner, Andrew Vlahov issued a stark reminder of the dire consequences for the NBL and basketball in Australia should history repeat by returning to a club-owned model.
“Returning to a club run model is a step backward - maybe three steps or even a fall. Important strategic decisions were often undermined or compromised by clubs’ self-interest and owners’ personal agendas,” he recalled.
“While it survived – it was not optimal by any stretch of the imagination. In a nutshell it was an unsustainable model. Teams were folding with alarming regularity and the requirement for strategic alignment was a mirage.”
The league was teetering on the brink of irrelevance and financial instability when Kestelman purchased the NBL licence for $7m in 2015 from Basketball Australia.
It was a basketcase with no broadcast deal and only one sponsorship deal worth $40,000 with Wilson basketballs.
Media mogul and former Collingwood president Eddie McGuire described the NBL as “completely dead” before Kestelman came to the rescue.
Kestelman’s estimated $70m investment into basketball, leadership, and long-term vision sparked a renaissance that brought international legitimacy, attracted NBA-level talent, and created a genuine pathway for young Australian players to make it to the NBA.
“Larry saved basketball in Australia, I have no doubt about that,” Giddey added.
“He stepped in when no one else was willing to and put his reputation and money on the line.
“Without Larry, the NBL wouldn’t be where it is today. I honestly wouldn’t be where I am today without Larry taking over the NBL.
“The opportunities, the exposure, the professionalism — it all changed when he took over. He gave players like me a real platform and an opportunity to succeed.”
Giddey, 21, rose to prominence after a season in the NBL as a Next Star with the Adelaide 36ers. He was drafted sixth overall by the Oklahoma City Thunder in 2021, and is a product of Kestelman’s investment and hard work.
“Growing up, I learned about how my dad (Warwick) played in the NBL and I always dreamed of following in his footsteps,” Giddey said.
“Thanks to Larry’s vision and leadership, that dream became a reality for me and so many other young Aussies.”
Australia’s other NBA young gun, Atlanta Hawks defensive phenomenon Dyson Daniels says the NBL has become a genuine career path for professional players yet to establish themselves in the NBA.
Daniels, who is also in line for a $100m contract upgrade and a leading candidate for the NBA’s Defensive Player of the Year revealed he wants to own an NBL team in the future.
“Everywhere I go people ask me about the NBL or tell me that they have seen it on social media and want to go play down there,” Daniels told CODE Sports.
“Larry is clearly the best executive the sport has had. I am beyond proud of the league and all it’s achieved and want to one day own a team.”
During Vlahov’s time in charge of the Wildcats, the NBL ran as PTY LTD company with a board of directors that consisted of club nominees and independents .
More than half of the teams in the league were in danger of folding leaving the NBL on the verge of collapse.
Vlahov chaired the NBL’s Strategic Review Committee along with Melbourne Tigers owner Seamus McPeake and Sydney Kings co-owner Paul Robertson.
They recommended slashing the salary cap from $1.1m to $750,000 and introducing a Player Points System in which each player ranked between 1-10 points based on perceived talent and rosters were capped at 70 points.
“Teams were self-harming by competitively and unnecessarily over-heating the labour market,” said Vlahov, who sold out of the Wildcats after the 2005-06 season.
“We had to take the matches away from the arsonists that could not help themselves.
“Our key recommendations were implemented and it saved the league from itself. I reviewed every Club’s P&L and logic was not a central theme.”
While 24 teams have come and gone since the NBL began in 1979, none have folded under Kestelman’s 10-year reign.
In that time, individual club valuations have sky-rocketed from being worth very little in 2015, to upwards of $40 million each.
NBL clubs no longer have to pay an annual licence fee to play and over the past four seasons the clubs have received an equal share of 25 per cent of the NBL’s net profit with the league also committed to distributing a further $11m over the next three years.
“The NBL is extremely fortunate to have the benevolence of Larry Kestelman as a passionate supporter that has a strategic vision. This vision is a “work-in-progress” and is undeniably headed in the correct direction,” Vlahov added.
“The NBL has gone from strength to strength and has largely eliminated the self-interested behaviours that existed previously.
“I believe the work Larry has done is outstanding. If people only knew all the other stuff below the surface – they would hold him in even higher regard.
“Yes – he is doing an excellent job and basketball in this country from the Boomers down to Aussie Hoops are all beneficiaries of his hard work and personal resources he has invested to make this the No.2 sport in the country and the envy of global leagues.”
What Novelly is proposing is to burn the current model to the ground and replace it with a structure which “involves the clubs taking control of NBLCO, will ensure continuity in the operation of the league while the governance structure is reshaped”.
However, this is not the hoops version of Survivor. Novelly doesn’t get to vote Kestelman off the Island.
Kestelman has made it abundantly clear that the NBL which he privately owns is “not for sale” and Novelly cannot force the self made billionaire to relinquish control without evidence he is in breach of his duties under the licence which was granted in perpetuity.
The NBL have refuted claims by Novelly in his email that in an independent KPMG report the NBLCO has a history of inconsistently calculating the club distributions and concerns of financial transparency.
“The KPMG report on NBL operations commissioned by the clubs found that we have complied and over delivered on distributions,” an NBL spokesperson said.
“The model is working well and the game is growing strongly.”
Malcolm Speed, who was the NBL chairman from 1987-97 before becoming the CEO of the International Cricket Council for eight years has a simple message for the current club owners.
“The NBL needs stability,” Speed said. “I urge the team owners to stick with the current model and continue the great progress that has occurred in the last decade.
“Under the current ownership and leadership of Larry Kestelman it is booming again.
After the Hawks won the championship in an epic five game series and the league posted all-time record attendance and broadcast numbers the spectre of a messy and expensive courtroom battle remains a reality.
The NBL has issued Novelly with a “notice of grievance” as part of a formal process that could end with his licence being stripped.
The Australian Financial Review reported on Thursday that the NBL also has hired consultancy and insolvency specialists KordaMentha to review the Illawarra Hawks’ operations “over concerns it has repeatedly breached its licence agreement”.
Under the club licence agreements the NBL is authorised to send in an independent representative to audit all clubs.
Multiple sources confirmed the Hawks had the lowest revenue in the NBL and lost $6.1 million last season, more than any other club.
It is also understood a Deloitte benchmarking report on the commercial performance of all 10 clubs in the league for FY24 ranked the Illawarra Hawks last in multiple categories. Their total trading income was $3.8m well below the league average of $9.2m.
Since the dispute between Kestelman and Novelly exploded in the media last month not a single club owner has come out publicly in support of the Hawks owner.
“We have spoken to every club. He has zero support for his proposal,” Kestelman said.
That owners list includes: Grant Kelley (Adelaide 36ers), Robyn Denholm (Sydney Kings), Mike Symonds (Melbourne United chair), Troy Stone (Cairns Taipans), Jason Levien and Ben Haan (Brisbane Bullets), Craig Hutchison (Perth Wildcats 49 per cent owner), Marc Mitchell (NZ Breakers) and Ben Harrison (Jack Jumpers).
The NBL is not the only sport in Australia that has been torn apart by self interest.
Former Football Federation Australia chief executive Ben Buckley has witnessed first hand the chaos A-League clubs created during his tenure from 2006-12.
“I think the model that Larry has created is a really strong model for a league that is growing and evolving and has come from a turbulent background where it’s had very limited capital to invest in the competition and the growth of the competition,” Buckley said.
“Having a centralised ownership model allows a very aligned execution of the strategy.
“That means you don’t have the constant chaos that can get created by clubs and owners or administrators who think that they have a better approach and distract from the overall success and value of the competition and club franchise value.
“In some ways you’re only as good as the weakest of the franchises because in any given competition and owning stakes in new and expansion clubs ensures there are resources available and there is alignment to the overall strategy to grow.”
Buckley believes if the NBL sticks to its current model it will attract more investors and capital investment to drive even more growth.
“You have got to have the right structures in place before you can attract outside investors who will be more aligned to the strategy,” Buckley added. “You don’t need people who aren’t going to be positive contributors to the overall good of the competition and aligned to the strategy.”
The NBL’s leading player agent Daniel Moldovan, who also manages Giddey and Daniels, says the league’s remarkable recovery under Kestelman has gained the respect of the basketball world.
“Top leagues are trying to emulate what the NBL is doing,” Moldovan said. “There is not a single league that I know of that has a closer relationship with the NBA and is more respected by the top executives across America.
“To put it bluntly Larry has been Australia’s basketball saviour.
“Unlike some that have only recently come to our shores I was around for the so-called golden era and was a victim of the NBL‘s lowest moments where club after club collapsed and our doors were almost shut.
“Larry has revived the sport, injected his own funds into the expansion and marketing of this league and has done so with honesty and integrity.”
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Originally published as NBA stars Josh Giddey, Dyson Daniels, back Larry Kestelman in face of NBL’s hostile takeover bid
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