Nilsson became a player-manager for the Brisbane Bandits for the 1996–97 ABL season. Although knee surgery cut his season short, he guided the team to the finals with a batting average of .420 which, had he played enough games, would have led the ABL that year. He returned to the US where he batted .278 for the season with 20 home runs playing first base, left field and DH. That off season he did not return to the ABL for the first time due to injuries. In the 1998 season he batted at a discouraging .269 mark for the Brewers.