Imagine trying to cross a kangaroo with an elephant.
It is a mental picture painted by businessman Larry Kestelman as he explains the challenges of successfully transforming a sporting organisation into a business.
But succeed, the billionaire owner of Australia’s National Basketball League (NBL) has, in the seven years since he took over an organisation facing financial oblivion.
He reportedly paid A$7 million (US$4.4 million) in 2015 for a 51% shareholding in the NBL which, according to media reports, has since increased closer to 100%.
One measure of how far the league has come and what it is worth is the value of the licences held by the 10 teams.
Kestelman says their value had increased “exponentially” over the last 10 years ago from about $1 million to between $30 million to $50 million and more.
“There's been a lot of value created,” he tells Azzet.
Examples included:
- Kestelman’s sale of 51% (100% by 2027) of 2024 NBL champions the Tasmania JackJumpers to Altor Capital in February 2025 for an amount that values the four-year-old club at $35 million
- His divestment of 10% of Melbourne United to entrepreneur Aaron Sansoni for $4 million in March 2024, valuing the club at $40 million, and
- Sports Entertainment Group’s (ASX: SEG) sale of 90% of the Perth Wildcats to cybersecurity entrepreneur Mark Arena for $36 million in May 2024, valuing it at $40 million on an enterprise value.
The 58-year-old Ukrainian-born business who moved to Australia with his parents at the age of 12, is worth $1.27 billion, according to the Australian Financial Review Rich List.
His wealth emanates from the sale of telecommunications companies Dodo and Eftel to M2 Group in 2013, property developments like the $800 million Capital Grand building in Melbourne, and other business interests through his privately-held LK Group.
First taste of basketball
Kestelman’s involvement with basketball as a business began in 2012 when he paid $6 million to take over the struggling Melbourne Tigers, controversially rebranding them Melbourne United.
One of his first acts after taking over the NBL was signing a $30 million broadcast rights deal with Fox Sports, paving the way for deals covering television, digital stream and international rights with Network 10 and ViacomCBS (now Paramount), Kayo Sports and ESPN.
Kestelman said managing a sports business was not necessarily different to running other businesses.
“It's a consumer business. Our consumers are our business. It's about understanding, why does our business exist? What value are we providing to our fans? Why is it important? How do we get them to come to our games? How do we get them to give up their time? But number one, we vie for their attention,” he says.
When he first became involved in basketball he was surprised how much time people running a club talked about what happened on the court rather than off the court.
“They almost didn't talk enough about the business of sport. There weren't enough conversations about what it would take to succeed as a business,” he says.
“At some point you have to start a review. A lot of it was changing over the people and the culture. What needed to be done was bring in more traditional business values to the sport, bring people in who think about the business of sport, but ensure the true passion of sport remains.
“When I took over the Melbourne Tigers, it took us three to four years to get the formula right. It wasn't an overnight success. When I took on the NBL, it was run by four to five people in Basketball Australia. We kept only one of the five.”
A focus on people
Kestelman concedes sport was one of the businesses where people were the most important assets.
“In our business, most of the people are athletes. We have to make sure they're looked after. They're what the people come to see in this business. In the time we've been involved in the NBL, the salaries of players have doubled or tripled and that's helping to attract more high calibre players. It’s the same off the court. We pay a lot more. We hire more professional people,” he says.
The NBL salary cap, which is the most teams can spend on the salaries of the 12 players on their rosters, increased 7% to $ 1.947 million (averaging $146,000 per player) in 2024/25, with the top 10 estimated to earn between $400,000 and $1 million.
Kestelman says the NBL worked hard to appreciate the needs of its stakeholders including fans, sponsors and partners.
“We represent something different for our corporate partners and our fans. When we talk about our sponsors and partners, we need to understand their challenges. It's important that we solve a problem for them and there's less of the, are you the right partner for us, and more of, can we solve a problem for you,” he explains.
The NBL has also attracted sponsors and partners headed by Hungry Jack's (naming rights) with Kestelman noting the alignment of league’s fan base with the customers of these companies, including a focus on families, communities and cost.
Potential upside
Kestelman sees sport as an evolving business category which provides the rare chance to “get people consuming where you want them to”.
“I think sport in general is a great opportunity. Sport is one of the things you want to consume live. But you need to think, is it a sport of the future or the past? Is it on the increase participation wise and watching wise or on the decline? I would look at participation. If there's massive participation, how does it translate from a viewership through the camera lens? Is it something you can consume on TV?”
He compares basketball with ‘non-stadia’-sports like example road cycling, which are time consuming to watch on television.
“Ours is two hours indoors, with cameras focused on the court from the best position. Non-stadia sport are challenging. Stadia sport are good,” he says.
The NBL owner also believes a key to business success is the ability to make decisions.
“Where a lot of sports have struggled in the past, including NBL, is where you have a lot of opinions, and decisions are not made easily. I have seen them being completely hamstrung by different stakeholders. You need a structure to make decisions, and that's allowed to make mistakes,” he says.
As for how long he will own the 47-year-old league before cashing out, like he did with Dodo, Kestelman insisted he had no exit strategy.
“We are here to be a long term owner. We're here to stay,” he says.
