Your first call before starting a league should be to a trusted tax or legal advisor. If the league qualifies as a nonprofit, you'll be exempt from paying taxes. If you intend to make money, you must register as a business and be taxed as such. However, forming a business protects your personal assets if you're sued for debts or damages.
Speaking of protection, insurance is essential. Basic plans cover property theft and embezzlement, plus accident, injury or discrimination involving athletes and spectators. Some insurance agencies specialize in such policies. The Amateur Athletic Union offers them, too. You should also have players sign waivers releasing you from liability in some situations -- accidentally breaking a spectator's rib while performing the Heimlich maneuver, for example.
Next, identify the key personnel that your organization will need. Besides a secretary, treasurer and other basic staff, you might need directors of ticket sales, promotions, recruiting, merchandising and equipment. A management software package or Internet-based management service can simplify administrative tasks, from generating mailing lists to performing background checks.
Choose the set of rules that best meet your league's purpose and players' abilities. For example, who is eligible to play? How long will games be? What types of team names are permitted? A local school coach can offer guidance (and possibly a rulebook). You should also establish by-laws to address off-court procedural issues like filing a complaint against a referee. Make both sets of regulations readily available to all involved parties.
The final piece of the picture is money. Team or player fees usually provide the bulk of funding for basketball leagues. What you charge -- and whether you offer anything besides the chance to play, such as a jersey -- should reflect the nature of the league. A city youth league with a six-game season might charge one-tenth the fees of a tri-state league of aspiring pros with a 30-game schedule. You or your players might be qualified to apply for a sports or fitness grant to help cover costs.
Sponsorships can be another lucrative source of income. Choose sponsors that promote the image you want for your league. A company might pay to have its logo on a program or its name mentioned during a time-out. Sporting goods makers might provide equipment at a discount in exchange for being named the league's "official" supplier.
And that's just an overview of things to consider. For more information, check out the sources listed on the next page.