May 2, 2025 • 12 mins
As the Indian Panthers saga draws to a sad close, questions are being raised as to who should be held accountable for this failure.
Henry Moore is the head of the Sports Law practice at law firm Tavendale and Partners, and he joined Piney to discuss what potential legal ramifications for the Panters and the NZNBL.
He told Piney that realistically, the consequences are more likely to be reputational as opposed to legal.
“The leagues credibility is obviously now under question, and that’s one of the biggest challenges for the sport, I think.”
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:06):
You're listening to the Weekend Sport podcast with Jason Vine
from Newstalk ZB.
Speaker 2 (00:12):
And assess, among other things, the potential reputational damage to
New Zealand Basketball and to the National Basketball League from this.
Henry Moore heads up the sports law practice at leading
New Zealand law firm Taverndale and Partners. He joins us now. Henry,
first of all, in terms of liability for what's played
out here, does the New Zealand Basketball League run by
(00:35):
New Zealand Basketball have any liability in this situation?
Speaker 3 (00:41):
From a legal standpoint, the league itself, obviously run under
the umbrella of b and ZED generally wouldn't be automatically
liable for these types of things just because the team
it's admitted into the competition has failed. However, if it
can be shown that the league acted negligently and allowing
(01:04):
the Panthers to come in to the competition, for example,
if they if they failed to do reasonable due diligence
and there were red flags but they weren't they weren't
picked up at the time, then in theory there's probably
a risk of liability. The key question is is where
(01:25):
they own a duty of care to their stakeholders, players, sponsors, fans, others.
Speaker 4 (01:30):
They've breached that duty.
Speaker 5 (01:32):
But I think more realistically, the consequence is probably more
reputational on governance based, not the legal aspect of it.
The league's credibility is obviously now under question. That's one
of the biggest challenges for the sport.
Speaker 4 (01:47):
I think how.
Speaker 2 (01:48):
Much reputational damage could this do? Has this already done
to the New Zealand National Basketball League and the attractedness
of the competition for overseas players for example, You.
Speaker 3 (02:01):
Know, I think the NBL's swift response has really helped.
It is usually how you respond in situations like this
that will actually enhance the reputation of the.
Speaker 4 (02:16):
Sport domestically and globally. There's always going to be some
reputational risk.
Speaker 3 (02:21):
I understand that there can be up to three overseas
players for each franchise twelve teams, so up to thirty
six overseas players.
Speaker 4 (02:33):
That's that's that's that's.
Speaker 3 (02:35):
A big number in the scheme of things and domestic
competitions in New Zealand. I understand there's there's ten or
so agents that work in this space that that that
send overseas players into our competitions. Obviously, eleven of the
franchises are really strong.
Speaker 4 (02:53):
It's a it's a good competition.
Speaker 3 (02:56):
So I think depending on how things play out from here,
the fact that the NBA has responded so swiftly, there
there is that that reputation as a good competition I
think will be will be retained, and as long as
things are handled appropriately from here on in, I don't
(03:20):
think there'll be too much of a risk. There's obviously
the commercial the commercial risk domestically too, not just the
overseas players, but for the competition itself. But again, in
my view of the NBL continues to respond on the
way it is doing now and responds appropriately, then they
(03:42):
can do all they can to enhance or to at
least retain their reputation.
Speaker 2 (03:46):
The phrase that you used before is one we've heard
a lot, and that's due diligence. Whenever you invite somebody
new into your competition and you said they are reasonable
due diligence, what does reasonable due diligence look like?
Speaker 3 (04:05):
Reasonable due diligence would be looking at, you know, the financials,
the ownership structures, the ability to comply with the league rules,
the operational.
Speaker 4 (04:18):
Capabilities, those types of things.
Speaker 3 (04:21):
Uh, And and when an overseas team is coming into
a domestic competition, you'd expect the due diligence would be
a lot more comprehensive than it might otherwise be, you know,
and there also might be you know, financial guarantees and
things like that that that that might be conditions placed
(04:43):
on on on those.
Speaker 4 (04:46):
That are that are provided a license.
Speaker 3 (04:50):
So it's not it's not necessarily just checking all the
paperwork and and.
Speaker 4 (04:55):
Those types of things.
Speaker 3 (04:56):
It's actually really understanding who's behind the team and whether
they can deliver what they need to sustainably and in
a way that will and will won't compromise the reputation
of the of the competition. So I imagine the NBL
here would have done a lot of due diligence.
Speaker 4 (05:15):
This is quite an innovative.
Speaker 3 (05:17):
Mode from the MBL to get exposure for their competition
and for basketball around the world, and so it was
an exciting opportunity for the sport. So I imagine it
would have required significant due diligence to ensure it worked.
Speaker 2 (05:35):
Is it possible? And I guess that's probably a silly
question because it's happened in this case. Is it possible
that even if you do a substantial, more than reasonable
amount of due diligence, that things can still go wrong.
Speaker 4 (05:48):
Good question.
Speaker 3 (05:50):
Absolutely you can. You can check everything in advance, you
and do as much as possible. Bank accounts, check business plans,
do all the background checks. But all it's you see
this not only in sport, but in the commercial world generally.
(06:12):
I mean, all it takes is disputes between the owners
of businesses, cashtrow problems, internal dysfunction, you know, all those types.
Speaker 4 (06:22):
Of things can put a business at risk.
Speaker 3 (06:25):
So doing as much due diligence upfront is really important.
But really due diligence is just trying to mitigate that risk.
You're never ever going to be able to eliminate it.
And that's always the problem. And that would have been
the risk that the NBL would have balanced and on
balance made the decision that this is the right thing
(06:48):
for the competition, and everyone assumed it would be.
Speaker 2 (06:51):
Yeah, I think you're right, and there's absolutely no issue
with the innovation here, and I think you know, news
on Basketball and the NBL should be applauded for innovation.
But you're right. They've quickly come in and said, hey,
we haven't got this one right. And here's the steps
we're taking as far as the players are concerned, Henry,
they will presumably have signed contracts with the Panthers. What
(07:12):
recourse do they have of those contracts aren't on it?
Speaker 3 (07:17):
Yes, I'm not sure if they're they're employment agreements or contracts.
I'd probably I'd assume, I'd assume their contracts. But if
if they are employment agreements, then like any other employee,
that have the right the employment rights that we would have,
which is being able to bring a personal agreements, those
(07:41):
types of things, the fact that their employer hasn't acted
in good faith, they'll be remedies.
Speaker 4 (07:47):
Remedies for that.
Speaker 3 (07:50):
In terms of contract, it would be standard things like
breach of breach of contract, misrepresentation, those types of things.
But I think the problem here is enforcement, right, It
depends on the Panther's financial position and legal structure.
Speaker 4 (08:13):
Are they even in a position to be able to.
Speaker 3 (08:18):
Pay these players or even meet these remedies laid down
the track if these breaches continue, And that's always one
of one of the challenges. I'm not sure whether the NBL,
I'm not across it, but whether the NBL is a
party to any of those employment agreements or contracts, whether
(08:38):
there are any indemnities there from the NBA.
Speaker 4 (08:40):
To cover those costs.
Speaker 3 (08:42):
The NBA might choose to do that anyway, but from
an employment law perspective, there are some protections and hopefully
those will.
Speaker 4 (08:56):
Be available for the players if they do remain out
of pocket.
Speaker 2 (09:00):
Would it be common for a governing body like New
Zealand Basketball to of a cost like those Would that
be a common thing to happen.
Speaker 4 (09:11):
No, it wouldn't be.
Speaker 3 (09:12):
I mean in in environments where there are collective agreements,
then use the governing body would be party to those agreements,
but it would it would be uncommon in this type
of structure for the n b L to be responsible
for any of those payments.
Speaker 4 (09:32):
They they provide the.
Speaker 3 (09:38):
License, the twelve licenses to each franchise, so the relationship
with that the NBO has with is primarily with that franchise.
It's the franchise that contracts with contracts with players and
takes on those those liabilities.
Speaker 4 (09:55):
So it would be uncommon.
Speaker 3 (09:58):
But the NBL, from a reputational perspective, might take certain
steps to man the impact that this this incident could
have on its competition and therefore do what's what's reasonably
(10:18):
expected of them to remedy at as best they can.
Speaker 2 (10:23):
And they often say in sport, you win or you learn.
Clearly there are some lessons to be learned here. Do
you think that the National Basketball League will be overly
cautious now about future innovation of this type? It would
be a shame if they didn't continue to innovate. But
do you think this will will make them a lot
more reticent in the future to do a similar sort
(10:44):
of thing.
Speaker 4 (10:47):
I think yeah.
Speaker 3 (10:48):
I think you're right that they've The steps that I've
taken to add this type of innovation into the competition
is really impressive, and you know, New Zealand's sport needs
to do more of it because.
Speaker 4 (11:02):
Of where we are in the world and time zones,
et cetera.
Speaker 3 (11:05):
To get that international exposure. So I do applaud them
for taking the steps they have to try something different.
I hope it doesn't put them or any other domestic
competition off from doing something like this again. I think
there was always going to be or any business decision
(11:26):
like this is always going to.
Speaker 4 (11:27):
Be some risk.
Speaker 3 (11:29):
I think everyone involved in this situation would I hope
that this was never going to be a possibility. The
fact that we are where we are will everyone involved
will do what it can to remedy it as quickly
as possible. But I hope it doesn't put the likes
(11:49):
of MBL off from doing it again. It might be
just some further questions asked in more comprehensive due diligence
potentially for the next time around. But if it's not
the Panther playing in next year's NBL, I presume there
(12:11):
will still be a license available And you'd hope that
whether it's a New Zealand team or an overseas team,
that the competition continues to liver like it is and
continues to grow and you know, and retains its fan base,
which I'm sure it.
Speaker 2 (12:27):
Will indeed, one hundred percent. You've provided this really interesting
available insight, Henry. Thanks so much for your.
Speaker 4 (12:32):
Time, mate, pleasure anytime.
Speaker 2 (12:34):
No thanks for joining us. Henry more there. He heads
up the sports law practice at leading New Zealand law
firm Taverndale and partners.
Speaker 1 (12:42):
For more from Weekend Sport with Jason Fine. Listen live
to news Talk ZEDB weekends from midday or follow the
podcast on iHeartRadio,
You're listening to the Weekend Sport podcast with Jason Vine
from Newstalk ZB.
Speaker 2 (00:12):
And assess, among other things, the potential reputational damage to
New Zealand Basketball and to the National Basketball League from this.
Henry Moore heads up the sports law practice at leading
New Zealand law firm Taverndale and Partners. He joins us now. Henry,
first of all, in terms of liability for what's played
out here, does the New Zealand Basketball League run by
(00:35):
New Zealand Basketball have any liability in this situation?
Speaker 3 (00:41):
From a legal standpoint, the league itself, obviously run under
the umbrella of b and ZED generally wouldn't be automatically
liable for these types of things just because the team
it's admitted into the competition has failed. However, if it
can be shown that the league acted negligently and allowing
(01:04):
the Panthers to come in to the competition, for example,
if they if they failed to do reasonable due diligence
and there were red flags but they weren't they weren't
picked up at the time, then in theory there's probably
a risk of liability. The key question is is where
(01:25):
they own a duty of care to their stakeholders, players, sponsors, fans, others.
Speaker 4 (01:30):
They've breached that duty.
Speaker 5 (01:32):
But I think more realistically, the consequence is probably more
reputational on governance based, not the legal aspect of it.
The league's credibility is obviously now under question. That's one
of the biggest challenges for the sport.
Speaker 4 (01:47):
I think how.
Speaker 2 (01:48):
Much reputational damage could this do? Has this already done
to the New Zealand National Basketball League and the attractedness
of the competition for overseas players for example, You.
Speaker 3 (02:01):
Know, I think the NBL's swift response has really helped.
It is usually how you respond in situations like this
that will actually enhance the reputation of the.
Speaker 4 (02:16):
Sport domestically and globally. There's always going to be some
reputational risk.
Speaker 3 (02:21):
I understand that there can be up to three overseas
players for each franchise twelve teams, so up to thirty
six overseas players.
Speaker 4 (02:33):
That's that's that's that's.
Speaker 3 (02:35):
A big number in the scheme of things and domestic
competitions in New Zealand. I understand there's there's ten or
so agents that work in this space that that that
send overseas players into our competitions. Obviously, eleven of the
franchises are really strong.
Speaker 4 (02:53):
It's a it's a good competition.
Speaker 3 (02:56):
So I think depending on how things play out from here,
the fact that the NBA has responded so swiftly, there
there is that that reputation as a good competition I
think will be will be retained, and as long as
things are handled appropriately from here on in, I don't
(03:20):
think there'll be too much of a risk. There's obviously
the commercial the commercial risk domestically too, not just the
overseas players, but for the competition itself. But again, in
my view of the NBL continues to respond on the
way it is doing now and responds appropriately, then they
(03:42):
can do all they can to enhance or to at
least retain their reputation.
Speaker 2 (03:46):
The phrase that you used before is one we've heard
a lot, and that's due diligence. Whenever you invite somebody
new into your competition and you said they are reasonable
due diligence, what does reasonable due diligence look like?
Speaker 3 (04:05):
Reasonable due diligence would be looking at, you know, the financials,
the ownership structures, the ability to comply with the league rules,
the operational.
Speaker 4 (04:18):
Capabilities, those types of things.
Speaker 3 (04:21):
Uh, And and when an overseas team is coming into
a domestic competition, you'd expect the due diligence would be
a lot more comprehensive than it might otherwise be, you know,
and there also might be you know, financial guarantees and
things like that that that that might be conditions placed
(04:43):
on on on those.
Speaker 4 (04:46):
That are that are provided a license.
Speaker 3 (04:50):
So it's not it's not necessarily just checking all the
paperwork and and.
Speaker 4 (04:55):
Those types of things.
Speaker 3 (04:56):
It's actually really understanding who's behind the team and whether
they can deliver what they need to sustainably and in
a way that will and will won't compromise the reputation
of the of the competition. So I imagine the NBL
here would have done a lot of due diligence.
Speaker 4 (05:15):
This is quite an innovative.
Speaker 3 (05:17):
Mode from the MBL to get exposure for their competition
and for basketball around the world, and so it was
an exciting opportunity for the sport. So I imagine it
would have required significant due diligence to ensure it worked.
Speaker 2 (05:35):
Is it possible? And I guess that's probably a silly
question because it's happened in this case. Is it possible
that even if you do a substantial, more than reasonable
amount of due diligence, that things can still go wrong.
Speaker 4 (05:48):
Good question.
Speaker 3 (05:50):
Absolutely you can. You can check everything in advance, you
and do as much as possible. Bank accounts, check business plans,
do all the background checks. But all it's you see
this not only in sport, but in the commercial world generally.
(06:12):
I mean, all it takes is disputes between the owners
of businesses, cashtrow problems, internal dysfunction, you know, all those types.
Speaker 4 (06:22):
Of things can put a business at risk.
Speaker 3 (06:25):
So doing as much due diligence upfront is really important.
But really due diligence is just trying to mitigate that risk.
You're never ever going to be able to eliminate it.
And that's always the problem. And that would have been
the risk that the NBL would have balanced and on
balance made the decision that this is the right thing
(06:48):
for the competition, and everyone assumed it would be.
Speaker 2 (06:51):
Yeah, I think you're right, and there's absolutely no issue
with the innovation here, and I think you know, news
on Basketball and the NBL should be applauded for innovation.
But you're right. They've quickly come in and said, hey,
we haven't got this one right. And here's the steps
we're taking as far as the players are concerned, Henry,
they will presumably have signed contracts with the Panthers. What
(07:12):
recourse do they have of those contracts aren't on it?
Speaker 3 (07:17):
Yes, I'm not sure if they're they're employment agreements or contracts.
I'd probably I'd assume, I'd assume their contracts. But if
if they are employment agreements, then like any other employee,
that have the right the employment rights that we would have,
which is being able to bring a personal agreements, those
(07:41):
types of things, the fact that their employer hasn't acted
in good faith, they'll be remedies.
Speaker 4 (07:47):
Remedies for that.
Speaker 3 (07:50):
In terms of contract, it would be standard things like
breach of breach of contract, misrepresentation, those types of things.
But I think the problem here is enforcement, right, It
depends on the Panther's financial position and legal structure.
Speaker 4 (08:13):
Are they even in a position to be able to.
Speaker 3 (08:18):
Pay these players or even meet these remedies laid down
the track if these breaches continue, And that's always one
of one of the challenges. I'm not sure whether the NBL,
I'm not across it, but whether the NBL is a
party to any of those employment agreements or contracts, whether
(08:38):
there are any indemnities there from the NBA.
Speaker 4 (08:40):
To cover those costs.
Speaker 3 (08:42):
The NBA might choose to do that anyway, but from
an employment law perspective, there are some protections and hopefully
those will.
Speaker 4 (08:56):
Be available for the players if they do remain out
of pocket.
Speaker 2 (09:00):
Would it be common for a governing body like New
Zealand Basketball to of a cost like those Would that
be a common thing to happen.
Speaker 4 (09:11):
No, it wouldn't be.
Speaker 3 (09:12):
I mean in in environments where there are collective agreements,
then use the governing body would be party to those agreements,
but it would it would be uncommon in this type
of structure for the n b L to be responsible
for any of those payments.
Speaker 4 (09:32):
They they provide the.
Speaker 3 (09:38):
License, the twelve licenses to each franchise, so the relationship
with that the NBO has with is primarily with that franchise.
It's the franchise that contracts with contracts with players and
takes on those those liabilities.
Speaker 4 (09:55):
So it would be uncommon.
Speaker 3 (09:58):
But the NBL, from a reputational perspective, might take certain
steps to man the impact that this this incident could
have on its competition and therefore do what's what's reasonably
(10:18):
expected of them to remedy at as best they can.
Speaker 2 (10:23):
And they often say in sport, you win or you learn.
Clearly there are some lessons to be learned here. Do
you think that the National Basketball League will be overly
cautious now about future innovation of this type? It would
be a shame if they didn't continue to innovate. But
do you think this will will make them a lot
more reticent in the future to do a similar sort
(10:44):
of thing.
Speaker 4 (10:47):
I think yeah.
Speaker 3 (10:48):
I think you're right that they've The steps that I've
taken to add this type of innovation into the competition
is really impressive, and you know, New Zealand's sport needs
to do more of it because.
Speaker 4 (11:02):
Of where we are in the world and time zones,
et cetera.
Speaker 3 (11:05):
To get that international exposure. So I do applaud them
for taking the steps they have to try something different.
I hope it doesn't put them or any other domestic
competition off from doing something like this again. I think
there was always going to be or any business decision
(11:26):
like this is always going to.
Speaker 4 (11:27):
Be some risk.
Speaker 3 (11:29):
I think everyone involved in this situation would I hope
that this was never going to be a possibility. The
fact that we are where we are will everyone involved
will do what it can to remedy it as quickly
as possible. But I hope it doesn't put the likes
(11:49):
of MBL off from doing it again. It might be
just some further questions asked in more comprehensive due diligence
potentially for the next time around. But if it's not
the Panther playing in next year's NBL, I presume there
(12:11):
will still be a license available And you'd hope that
whether it's a New Zealand team or an overseas team,
that the competition continues to liver like it is and
continues to grow and you know, and retains its fan base,
which I'm sure it.
Speaker 2 (12:27):
Will indeed, one hundred percent. You've provided this really interesting
available insight, Henry. Thanks so much for your.
Speaker 4 (12:32):
Time, mate, pleasure anytime.
Speaker 2 (12:34):
No thanks for joining us. Henry more there. He heads
up the sports law practice at leading New Zealand law
firm Taverndale and partners.
Speaker 1 (12:42):
For more from Weekend Sport with Jason Fine. Listen live
to news Talk ZEDB weekends from midday or follow the
podcast on iHeartRadio,
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