Organisations count costs

Felicity Reid
When the NBA was called off mid-season, after a Utah Jazz player tested positive for Covid-19, money stopped flowing through New Zealand’s sports betting agency — the TAB.

One in five sports bets placed with the TAB is on the NBA, according to TAB chief executive Dean McKenzie, and when the American basketball competition shut down on March 12 the TAB lost one third of its business.

Betting and basketball are so closely linked in New Zealand that a sudden drop in sports betting revenue on an overseas competition had a direct — and potentially devastating – effect on local competition.

The TAB contributed the lion’s share of Basketball New Zealand’s funding each year via commission payments from NBA betting.

Basketball New Zealand chief executive Iain Potter said even the most comprehensive risk assessment planning could not have prepared the organisation for the effect the coronavirus pandemic would have on funding streams.

Potter said while the organisation would be “battered and bruised” he expected Basketball New Zealand to come out of 2020 financially stable.

But he worried what future balance sheets would look like.

“There is no use surviving 2020 if we aren’t in a fit state to do what we need to in 2021 and 2022 and 2023,” he said.

In 2019 Basketball New Zealand got “the best part of $2,4 million” from the TAB.

Potter said he expected “very little” TAB generated revenue from when the NBA was suspended through to when the new season would potentially commence at the end of October.

“The cost to us of that gap or hiatus we’re estimating will be in the vicinity of $800 000 to $900 000.

“We are a $7 million business, with $2,4 million coming from the TAB, it is obviously a significant chunk of that revenue.”

Being so reliant on TAB funding was something Potter said the organisation had tried to move away from.

But the TAB, unlike other funding sources, did not ask questions about where money it gave to sports was spent and Potter said sports would miss that flexibility.

“We’ve worked hard over the last few years to increase the amount of commercial revenue to better balance our revenue streams, but this particular crisis has harmed every revenue stream except for the government one.

“There hasn’t been anyone who has escaped the firestorm no matter what your revenue distribution.

“We never would have thought that four or five of our revenue streams would be hit at the same time, that was unforeseen, unimaginable and unplanned for.”

The government is committed to paying out any already allocated funding and Potter said that would make a difference as Basketball New Zealand received a total of just over $800 000 with 75 percent of that money allotted to driving participation numbers.

“If you’re a recipient of government funding, High Performance Sport or Sport New Zealand money, this is a time to be particularly grateful for that because everything else is off”.

The postponement of the Tokyo Olympics was a double-edged sword for basketball.

With the Tall Blacks Olympic qualifiers pushed out to next year it helped balance the books in 2020 but put greater pressure on future funding.

“We are going to face some challenges in 2021 and we’re thinking about those already. All those revenue streams aren’t just going to go back to where they were, they’re going to be dented and that already concerns us.””— RNZ.