FUNDING THE INFRASTRUCTURE OF THE SPORT OF BASKETBALL IN AUSTRALIA

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1 FUNDING THE INFRASTRUCTURE OF THE SPORT OF BASKETBALL IN AUSTRALIA Why We Need to Have Registration Fees 1. How is the Infrastructure of Basketball in Australia Funded? The registration fee system in basketball, like that in most community based sports, is designed to provide a revenue source to support the infrastructure of the sport. It is collected from those individual members who participate in the sport through its various affiliated bodies. In some ways, the infrastructures of sports in Australia are structured, organized and funded in a similar way to government, where we have a national (or federal) government, state governments and local governments (as representatives of the individual members of the larger Australian community). Each level of government has responsibilities to the level above it and to the level (or to the community of individuals) below it. The structure of not-for-profit affiliated basketball associations in Australia is similar. We have one national association (Basketball Australia), 8 state associations (BNSW, BVic, BQ, BWA, SABA, BTas, BACT, NTBA) and many local basketball associations. Together, they provide the infrastructure that represents the interests of the game of basketball at all levels through the broader community of basketball participants, from local to international. 2. What Does the Infrastructure of Basketball in Australia Do? The basketball associations, (national, state and local) provide the infrastructure that manages, administers and supports the game of basketball all the intangible things necessary to create the infrastructure to take care of the game as a whole (rather than just providing direct individual products or services routinely and directly to the individual participants or bodies). This is similar to the way the various levels of government take care of many aspects of the larger community (as opposed to individually servicing each member of the community on a one to one basis) 1

2 As an example, we know that all Australians contribute towards funding overseas Australian diplomats and offices, although very few of the contributing citizens will ever actually utilize their services directly. However, it is a service and capability that all governments agree we need to have and which could not possibly be put into place if only the people who utilized it at any given time were asked to contribute the actual cost of providing it. The same could be said of many things, such as the law enforcement services, schools, public hospitals, public transport, airports etc etc. Therefore, all taxpaying members of the general community contribute towards the various levels of government providing the infrastructure needed to run the country as a whole. This infrastructure includes things like the public service, law enforcement services, legal system, public health system, military etc etc. These systems are available to the community at large and to individuals from within the community when and if they are needed, but need to be funded in an ongoing way. Basically, the community funds the capability and capacity of these systems to meet their needs in the future, when and if required. The government infrastructure is responsible for making sure that that capability and capacity is built, maintained and delivered to the community when, where and if required. 3. What is the Basketball Registration Fee? How is it Collected in NSW? In a similar fashion, all individual members of the general basketball community pay a capitation fee (ie, paid on a per head basis ) to support the game and its infrastructure at all levels. This is called a registration fee. It is, in effect, collected by the local association, who keep a proportion to fund the local infrastructure and then pass on the rest to the state body. The state body keeps a proportion to fund the state infrastructure and passes the remainder on to the national body, where it is used to help fund the national infrastructure. The expenditure of this registration revenue at these not-for-profit basketball bodies is overseen by boards of directors who represent the members of that body and who are elected largely from within the membership of these bodies. In becoming members of the broader basketball community through the adopting of their constitutions and taking membership of their state bodies, the local association agrees to be a part of this infrastructure system. They agree that they will carry out the role of collecting registration fees on behalf of the parent bodies as well as themselves 2

3 and submitting the appropriate share of those fees to the parent bodies as part of their membership obligations. The state bodies then fulfill their similar obligations by submitting the appropriate share of those fees to the national body. If the current system is regarded as bodies at each level charging a service fee to the level below, it is not a truly accurate representation of the situation and it also causes misunderstandings and discontent about What is the registration fee for? or What do we get for our money? These type of questions tens to imply that it is like an over the counter purchase, but you are not funding the buying of a carton of milk or loaf of bread here. You don t buy a specific item when you pay your council rates and the situation with registration fees is similar. So, these are not the questions that should be asked. Clearly, the only way the infrastructure of the sport of basketball in Australia can be funded is through this model of mutual sharing of registration fees. It needs to be looked at as mutual sharing because that is what it is. 4. An Example of How Basketball Registration Fees Are Collected & Distributed to the Sport. A way of interpreting and understanding the concept of the registration fee system as a mutual process could be achieved through looking at a hypothetical example. Let us say that the whole of the registration fees to be used to support the infrastructure of the sport that are collected from individual members at local level on behalf of the sport by the many local basketball associations around Australia are equal to $(a+b+c). In each local association case, the fees that they collect would be made up as follows: $a local registration fee goes towards local association infrastructure costs $b state registration fee goes towards state association infrastructure costs $c national registration fee goes towards national association infrastructure costs The local association receives $(a+b+c) from its members, retains $a and passes $(b+c) on to the state association. The state association receives $(b+c) from its member associations, retains $b and passes $c on to the national association. 5. Are There Other Ways to Fund the Basketball Infrastructure? The more funding of the sport that can be provided from external sources, the more the sport can increase its infrastructure and/or reduce the contribution in registration fees 3

4 from its community of members. Unfortunately, basketball as a sport has little in the way of external funding, like sponsorships for example, available to it. Most of these sources are dominated by the major sports with a high media profile and presence, like Rugby League, AFL and Cricket. In addition, basketball as a whole sport took the decision some 10 or more years ago that it would not request or accept sponsorship from cigarette or alcohol manufacturing companies to promote their products, as these did not fit the role of basketball in the community as a family centred sport that sends positive health and lifestyle messages to our participants. Some additional support funding for the infrastructure of the sport of basketball is also provided by government. Nationally, the Australian Sports Commission provides significant support funding for Basketball Australia and its programs to assist it in providing the national infrastructure for basketball. In a similar way, state governments provide support funding for state basketball infrastructure through their sport and recreation departments. This support tends to be in two categories: 1. Support for the operational running of the sport s state body 2. Support for provision of sports facilities Fortunately for Basketball NSW and basketball, in the first situation above, the NSW State Government does contribute a grant to help with the costs of operations through the NSWDSR&T. This support is certainly appreciated by the sport. Unfortunately for Basketball NSW, the amount received is relatively small compared to what is received by many other state basketball bodies from their state governments. Fortunately for basketball and our local associations in NSW, in the second situation above when it comes to facilities, there are grants made available from the NSW State Government to assist local councils in the construction of indoor sporting facilities. However, the local council and sporting bodies have to contribute funding as well. Many of the centres that are being approved and built these days are very expensive multipurpose indoor sport facilities, often including swimming pools and gyms, so that it is sometimes very difficult for local basketball associations to gain their own purpose built facilities through this avenue. What ultimately happens with the basketball association and its access to the facility depends very much on local council policy. The association may end up as a hirer running its own competitions in a shared facility, with separate facility management. In worst case scenarios, it may lose control of its local competitions to centre management. Eventually, basketball may need to find ways of 4

5 somehow independently developing its own facilities if it wants to manage and operate them as special purpose basketball facilities. This, therefore, leaves the bulk of the sport s operational infrastructure funding in NSW to come from the individual members of the basketball community through the registration fee system. They also have to often make a contribution towards the development of new community indoor facilities through their local association and council. 6. The Difference Between Providing Capability & Capacity and Delivering Specific Services & Products. Part of the infrastructure put in place and maintained by governments may also provide specific services to individuals for which they charge on a fee for service basis eg garbage collection, car registration, motorway road tolls, train and bus fares, driver s licences, parking permits, building permits etc etc. Just as a government may also charge additional specific fees for services they provide to individual community members, so too do basketball associations. Local associations charge entry fees, game fees, course fees, camp fees, representative program fees, court hire fees etc etc for the competitions they run and the other activities they provide to members of the basketball community. The higher levels of the sport do not receive a proportion of these specific fees for services charged at a local level to be passed on to them as a contribution to infrastructure of the sport, and nor do they expect this. The general infrastructure funding need has been taken care of in the sharing out of the registration fees. Similarly, the state body charges fees to participants for some specific services such as representative competitions, courses etc. Again, similarly, the national body does not expect a proportion of these type of specific fees to be passed on to them by the state bodies. 7. Role of Basketball NSW The infrastructure of basketball is something that supports, protects and grows the game. It is something that can be accessed by members when it is needed. If a local association needs help or support, the Basketball NSW state infrastructure will supply it. The areas of help and advice that can be provided include technical matters such as rules, refereeing, coaching and technical officials. Other areas include assistance with administration, legal matters, taxation matters, financial matters, governance, tribunals, 5

6 registration system services, IT advice, risk management, insurances, government relations, marketing, equipment and facilities. The key is that these capabilities need to be there and always available if needed and the capability and capacity to deliver them must be maintained. A local association may not be regularly accessing more than a few of these capabilities at any one point in time, but they expect them all to be available when they want and need them. The way that Basketball NSW spends its revenue on developing, maintaining and delivering infrastructure is published each year in its Annual Report. Experience at Basketball NSW shows that when things are going smoothly, local associations may not seek a lot of assistance in many of the above areas where Basketball NSW can provide support, but at other times, they are used intensively. When change or disruption is occurring, local associations look to Basketball NSW for support and assistance. If they require an authoritative action or ruling, they look to Basketball NSW to provide it. If they want to expand, they look to Basketball NSW to provide advice on facilities, then back them up and go into bat for them with local authorities and supporters. However, when things go wrong, local associations lean very heavily on Basketball NSW to use its capabilities to get them out of trouble and back on the road to recovery. This may be financial trouble, facility trouble, competitor trouble, directors liabilities and exposures, taxation matters, statutory compliance problems, child protection matters, occupational health and employment matters and so it goes on. Further, because these matters are handled discreetly by Basketball NSW, other local associations are most unlikely to be fully aware as to how much work, resources and effort Basketball NSW is putting in to help the association which have problems to get over them and to recover. Basketball NSW is an organisation with capabilities that can be delivered and which are delivered. Local associations do not always recognize the extent to which they utilize these Basketball NSW infrastructure capabilities, because they are sometimes taken for granted. Basketball NSW has had instances of member associations who have claimed that they don t get any value from Basketball NSW infrastructure or its services so they don t use them, yet BNSW staff know that they are taking telephone enquiries from that association and servicing their needs on all sorts of matters on a quite frequent basis. 6

7 Basketball NSW and its infrastructure is dedicated to supporting its member constituents. It is not unusual for requests for assistance to occur outside of normal business hours, but the BNSW staff is generally still prepared to provide the service at that time when it is requested, particularly if it is an urgent matter. 8. Summary Conclusion So, if we ask the question What do the registration fees fund? the answer must be The whole of the infrastructure of basketball. Essentially, in principle, by becoming a member of an affiliated basketball body, an individual person, through payment of their registration fees, agrees to contribute towards the provision of the infrastructure of the sport at its various levels. By becoming an affiliated member body, a local association agrees to collect those registration fees and distribute them appropriately to the various bodies responsible for the various levels of the sport to, enable funding of the infrastructure of the sport. The exact methodology and procedure may vary a little from association to association and state to state, but in principle, the above describes what is happening. So how can we summarise what registration fees do? They build infrastructure that provides and delivers capacity and capability to members of the basketball community and to the sport, that is available when and where it is needed. Therefore, they contribute very, very significantly to administering, managing, protecting and growing of both the game as a whole and of the many member associations that together make up our basketball community. 7