The Southern Huskies Basketball club have withdrawn from the New Zealand NBL and local NBL1 competitions, effective immediately — with a parting shot for the sport's local governing body.

Key points: The team, under owner Justin Hickey and chief operating officer Mike Sutton, made their debut in this year's New Zealand competition

The team, under owner Justin Hickey and chief operating officer Mike Sutton, made their debut in this year's New Zealand competition The team said the relationship with Basketball Tasmania had become "untenable"

The team said the relationship with Basketball Tasmania had become "untenable" The Tasmanian Government provided the team with a $200,000 grant; it is unclear whether that will be repaid

The Tasmanian club, run by co-founders Justin Hickey and Mike Sutton, announced it was breaking its five-year license agreement with the New Zealand competition and would not be renewing their license for both the men's and women's programs in Tasmania.

In a statement, the Huskies said its relationship with Basketball Tasmania had become "untenable", but offered little explanation as to why.

"After investing over $1.7 million in the Tasmanian Basketball market since 2017, we have made the difficult decision to remove ourselves," the statement read.

The Huskies entered the New Zealand NBL this season, with the intention of pushing for Australian NBL inclusion in future years.

The club was the recipient of a $200,000 grant from the Tasmanian Government.

New Zealand NBL's manager said his league had been "caught in the crossfire". ( Facebook: Southern Huskies Basketball )

But middling crowds and ticket sales saw the club struggle financially.

"We're proud to have provided significant investment to keep the pathway program running for NBL1 after the previous incumbent went into administration and to have completed a very difficult first season across all three of our teams," the club statement reads.

"We believe there's a lot to be proud of in what we have achieved since the start of this journey but circumstances over the past month have made it impossible to remain a part of the basketball program in Tasmania."

The Huskies thanked their supporters and all sponsors, volunteers and partners and said "arrangements will be made with all remaining creditors to be paid".

The team said a detailed report will be prepared for Premier Will Hodgman explaining the circumstances of their withdrawal.

"We hope the inclusions in the report will have a positive impact on change for the betterment of basketball in Tasmania," the statement read.

In a statement, New Zealand NBL general manager Justin Nelson said it was "unfortunate our league seems to have been caught in the crossfire".

"Clearly there is a lot going on between the two parties and that situation is rapidly unfolding, but it's not our problem and we'll focus on the strong and viable teams we already have in our league."

"New Zealand basketball is strong, this is an issue off our shores and we feel disappointed for the Tasmanian fans who enjoyed following their team in our league."

Basketball boss queries 'untenable' claim

Basketball Tasmania chief executive Chris McCoy thanked the Huskies for their investment in the state in the first year, labelling the club "pioneers."

But Mr McCoy disagreed that the relationship had become "untenable."

"By the Huskies' own admissions, there were some shortcomings in year one and we're quite within our right to ask to ensure those areas will be improved in year two, if that's 'untenable' then that's disappointing," he said.

"We were certainly asking some questions around some issues they were having … we wanted to see a more professional operation in year two," he said.

Mr McCoy said Basketball Tasmania will do "everything possible" to ensure there are two teams on the floor in NBL1 next year.