Investment group

US investment group tries to turn ‘breakers’ into global brand –


If you live in the United States, chances are you’ve never heard of the New Zealand Breakers basketball team. But a group of owners including Shawn Marion, Victor Oladipo and former professional basketball player Matt Walsh have worked to change that by positioning the club as a premier destination for global school-aged talent. Over the past three years, elite players from China, France and India have all signed up to play for the Breakers (as has RJ Hampton from the United States). Walsh, who runs day-to-day operations, and his partners believe that if the team can continue to attract future NBA players, they can transform the Auckland-based team into a globally recognized brand, creating a multitude of new business opportunities. for itself as well as the way and increase its valuation.

Taking from JWS: Walsh is originally from Pennsylvania, played college ball in Florida, appeared in two NBA games before being sidelined by the Miami Heat, and then played professionally for several teams in Europe. ESPN analyst Jonathan Givony introduced him to the Down Under opportunity in November 2017. “He called and said, ‘I know you invest in sports; you should take a look at the New Zealand Breakers, ”Walsh recalls. “The NBL has a lot of good things going for it, [including] a connection with the NBA. Since 2017 (except the last two years due to COVID), NBL clubs have taken an annual trip to the United States or Canada to participate in preseason games against NBA teams.

While Walsh had doubts about viability (the club had never been profitable), he went to New Zealand to search. What he found surprised him. “I was blown away by this incredible stadium and this really incredible level of talent,” he said.

From a business standpoint, however, “It was like watching an NBA game 35 years ago,” he said. At the time, the Breakers were generating less than $ 3 million in revenue per year.

The three-decade-old league had yet to sign a media rights deal where it received money. But Walsh saw the league trend (in terms of TV production, quality of play, quality of player imports, and growing interest) and understood the value of live sports rights. “I knew the media rights money was coming,” he said. In the final offseason, the NBL signed a three-year, $ 60 million pact with Foxtel and ESPN.

The deal allows the NBL to renegotiate terms again over the next several years, and Walsh has said he expects the league to order four to five times as much next time around. The Breakers currently generate around $ 10 million in revenue per year (around 15% of media rights) and expect to be profitable next season.

Walsh also increased the home team’s income, especially in sponsorship, which now accounts for around 50% of Breakers’ income. “When I bought the team, a local casino was paying $ 200,000 for the jersey front sponsorship,” he said. “After my first year, we signed the biggest [jersey partnership] contract in league history: $ 1.4 million per year with Sky Sports. “

The team also increased their income through a jersey patch deal with Manuka Doctor, worth $ 500,000 per year.

Media rights and sponsorship revenues have been fruitful within reach. Walsh said the overall plan has always been to turn the Breakers into global sports property, making the club relevant worldwide to increasing the valuation of “many, many multiples.”

“I knew I could use my connections in the NBA to play NBA preseason games [in North America] every year, ”he said. “I knew with the [NBL’s] Next Stars Program that I could recruit and recruit the best talents. And I knew I could launch a media branch in the business and shoot a documentary, ”a way to increase visibility for the Netflix series of Formula 1, Drive to survive. The behind-the-scenes show of The Breakers airs on Sky Sports.

The Breakers have played preseason competitions against the Suns, Thunder and Grizzlies since Walsh took over. But it’s the club’s ability to attract top international talent (players receive a six-figure salary and a share in their NBA buyout) that has garnered the most attention. Over the past three seasons, the club have signed RJ Hampton (the 24th pick in the 2020 NBA Draft who now averages 18 minutes per game with Orlando); a pair of French players who should be the future selections of the first round (Ousmane Dieng and Hugo Besson); and India’s most talented school-aged candidate (Princepal Singh).

“Every year we want one or two players at the NBA Draft night who [commissioner Adam Silver] says, “New Zealand breakers…” And if we can do it with someone like Prince of India, in a largely untapped market in basketball but with such a huge population, we see a lot of value in it ” , Walsh mentioned.

The prospect of seeing young players “before they are stars” also contributes to cash flow; 30% of Breakers’ revenue is from ticketing, and attendance has doubled, to around 7,000 fans per game, since Walsh’s group bought the team (Spark Arena owns 9,000).

Also on the drawing board is a world-class performance center. “We plan to attract the best teams from all over Asia and India to come and train with us in the offseason,” he said. “People pay a lot of money for these [strength training, conditioning and physical therapy] services. We believe this will be a huge income opportunity. “

The UFC is in pursuit of a similar opportunity, having built the UFC Performance Institute in Shanghai.

Before Walsh’s arrival, the NBL had never had an international owner. But since then, there has been an influx of American ownership into the league. “Now half of the teams are from American consortia, and so much money has gone into the league,” Walsh said. Bryan Colangelo (Illawarra Hawks), Jason Levien (Brisbane Bullets) and Romie Chaudhari (SE Melbourne Phoenix) are among those who have bought (or bought) teams.