Adelaide 36ers Break Ranks on BA Bank Guarantees

Adelaide will not have an NBL team in the new league if Basketball Australia (BA) does not relent on its criteria stipulation of a $1 million bank guarantee.

Mal Hemmerling, owner of the 36ers, said if the bank guarantee was fundamental to securing a licence in the new competition, Adelaide would not be a starter. Breaking ranks with other potential licencees, Hemmerling stated “Adelaide won't have a team in the league," adding “if it (the bank guarantee) is fundamental (to securing a license in the new-NBL) then we are at risk."

Hemmerling (pictured) purchased the 36ers with former childcare magnate Eddy Groves for $3.95 million, in July 2006 as the South Australian Government sold off the assets of the defunct Basketball Association of SA.

Groves took ownership of the team’s venue (the Distinctive Homes Dome) and Hemmerling took on the team but with the former's childcare empire in financial meltdown, he has been looking to offload the venue.

Hemmerling acknowledges that his days as "sole owner of the 36ers" were over stating "I've been beside myself trying to find a solution."

BA Chief Executive Scott Derwin responded with a statement “we are aware of some comments that have been issued directly to the media by the Adelaide 36ers raising concerns about the delay in revealing the shape of the new competition and the new league’s financial criteria.

“Unfortunately, these comments relate to issues previously agreed to in many meetings with team owners and were not previously tabled directly to BA. This sort of public airing of grievances is exactly the kind of negative behaviour Basketball needs to eliminate from our sport as was discussed openly at the recent summit, which this particular team chose not to be represented at.

“There is no doubt that we would have hoped to have unveiled the new competition by now.

“One of the most serious delays in the process however has in fact been caused by the number of non-compliant bids we have received that has required significant clarification and negotiation to maintain the integrity and viability of the outcome – a competitive, national and financially stable elite men’s competition.

“Comments yesterday called the financial criteria being applied as part of our Expression of Interest process for the new league ‘inappropriate and unwarranted’. This stance is out of touch with the reality that the league found itself in throughout the 2008/09 season, when two clubs collapsed mid-season and three others either went under or pulled out of the competition prior to tip-off. The full criteria as outlined in the EOI was the subject of intensive consultation with all teams including the 36ers and the owners group signed off on it prior to the EOI process commencing. Moreover, it was this very process of consultation which delayed the issue of the EOI documentation in the first instance.

“The financial criteria for the new league was established with full input from all our teams. The guarantee was actually adjusted down as a result of this consultation from the $1.5 million originally recommended by the independent review of our sport to $1 million in order to ensure it was fair and achievable whilst still serving its intended purpose. Any further reduction would however ultimately render it as an ineffective measure for providing a level of financial stability for the new league. The other issue that has been inappropriately raised in a public forum is the status of negotiation of this criterion with respective clubs. The Board of BA has provided an alternative financial viability option available to all groups bidding for licenses whereby a non-bank guarantee will be accepted only if that non-bank guarantee is backed by proof of $50 million of net tangible assets. Either way the primacy of the financial assurance is maintained.

“If any ownership group is unable to meet the new financial criteria, then there are clearly serious questions around the long-term viability of that team. Basketball simply cannot afford to allow clubs that are not rock solid financially into the new league and it’s the responsibility of those who wish to earn a license in the new competition to meet the new standards that have been set.”