If you live in the United States, there is a good chance you have never heard of the New Zealand Breakers basketball team. But an ownership group that includes Shawn Marion, Victor Oladipo and former pro basketball player Matt Walsh has been working to change that by positioning the club as a premier destination for global high school-aged talent. In the last three years, elite players from China, France and India have all signed on to play for the Breakers (as did R.J. Hampton from the U.S.). Walsh, who runs day-to-day operations, and his partners believe if the team can continue to attract future NBA players, it can turn the Auckland-based squad into a globally recognized brand, create a host of new commercial opportunities for itself along the way and grow its valuation.
JWS’ Take: Walsh is from Pennsylvania, played college ball at Florida, appeared in two NBA games before being waived by the Miami Heat, and then played professionally for several teams in Europe. ESPN draft analyst Jonathan Givony brought the Down Under opportunity to him back in November 2017. “He called and said, ‘I know you invest in sports; you should take a look at the New Zealand Breakers,’” Walsh recalled. “The NBL has a lot of positive things going for it, [including] a connection to the NBA.” Since 2017 (save the last two years due to COVID), NBL clubs have made an annual trek to the U.S. or Canada to compete in preseason games against NBA teams.
While Walsh had his doubts about viability (the club had never been profitable), he went to New Zealand to look. What he found surprised him. “I was blown away by this incredible stadium and this really amazing level of talent,” he said.
From a commercial standpoint, though, “It felt like you were watching an NBA game 35 years ago,” he said. At the time, the Breakers were generating less than $3 million a year in revenue.
The three-decade-old league had yet to sign a media-rights deal where it received any money. But Walsh saw the way the league was trending (in terms of TV production, quality of play, the 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. This past off-season, the NBL signed a three-year, $60 million pact with Foxtel and ESPN.
The deal allows the NBL to renegotiate the terms again within the next few years, and Walsh said he expects the league to command four to five times as much the next time around. The Breakers currently generate around $10 million in revenue annually (roughly 15% from media rights) and expect to be profitable next season.
Walsh has also grown local team revenues—particularly in sponsorships, which now make up about 50% of Breakers revenue. “When I bought the team, a local casino was paying $200,000 for the front-of-jersey sponsorship,” he said. “After my first year, we signed the biggest [jersey partnership] deal in league history: $1.4 million per year with Sky Sports.”
The team also upped revenue thanks to a jersey patch deal with Manuka Doctor, worth $500,000 annually.
Media rights and sponsorship revenues were low-hanging fruit. Walsh said the big-picture plan has always been to turn the Breakers into a global sports property, making the club relevant around the world to drive up the valuation by “many, many multiples.”
“I knew I could use my relationships 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 get top talent. And I knew I could start a media arm to the business and shoot a documentary,” a means to increase visibility à la Formula One’s Netflix series, Drive to Survive. The Breakers’ behind-the-scenes show airs on Sky Sports.
The Breakers have played preseason contests against the Suns, Thunder and Grizzlies since Walsh took over. But it has been the club’s ability to attract top international talent (players receive a six-figure salary and a share in their NBA buyout) that has brought most of the attention. Over the last three seasons, the club has signed R.J. Hampton (the 24th pick in the 2020 NBA Draft who now averages 18 minutes a game with Orlando); a pair of French players expected to be future first-round selections (Ousmane Dieng and Hugo Besson); and the most talented high school-age prospect to come out of India (Princepal Singh).
“Every year we want to one or two players on NBA Draft night that [commissioner Adam Silver] is saying, ‘From the New Zealand Breakers…’ And if we can do that with somebody like Prince from India, in a market that is largely untapped in basketball but has such a huge population, we see a lot of value there,” Walsh said.
The prospect of seeing young players “before they were stars” also helps with cash flow; 30% of Breakers revenue is tied to ticketing, and attendance has doubled, to around 7,000 fans per game, since Walsh’s group bought the team (Spark Arena holds 9,000).
Also on the drawing board is a world-class performance center. “We plan on attracting top teams from all over Asia and India to come and work out with us in the off-season,” he said. “People pay a lot of money for those [strength training, conditioning and physical therapy] services. We think it is going to be a huge revenue opportunity.”
The UFC is chasing a similar opportunity, having built the UFC Performance Institute in Shanghai.
Prior to Walsh’s arrival, the NBL had never had an international owner. But there has been an influx of American ownership into the league ever since. “Now half the teams are owned by American consortiums, and so much money has come 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 into) teams.