I was reading the transcript of the press conference that Commissioner Stern of the NBA and Jordi Bertomeu of the EuroLeague held in Barcelona this week.
I was just trying to keep up to speed on things, but somethings that Jordi Bertomeu said really got me thinking.
"We want to make our basketball visible around the world. The Euroleague is already seen in 120 countries, and thanks to this platform with the NBA and David, we have the opportunity
to reach more of our target."
and
Jordi Bertomeu on Europeans in the NBA
"I believe the main problem is not that players go away, because they go and come back, too. We have to grow and make Euroleague Basketball attractive enough that they don't go away. That's our job. "
I guess I never really followed the business aspirations of the Euroleague, but one thing becomes amazingly clear in reading his remarks. Mr Bertomeu doesnt want to be a minor league or feeder system to the NBA. He wants to compete with the NBA.
The guy sure seems smart. Its the brilliant, if someone allows you to do it to them, scorpion and frog approach to business. The scorpion professes his love for the frog. The frog puts the scorpion on his back and takes him across the pond that the scorpion would not otherwise be able to crosee. On the otherside the scorpion basically looks at the frog, says "thanks for the ride, but Im still a scorpion" and stings and kills the frog.
I, like I think a lot of my brethren in the NBA, thought that we were leveraging the EuroLeagues to develop talent that we brought over here to improve the level of play in our games. We at the NBA brag over and over how our support of development of basketball around the world, starting with the Dreamteam, has lead to international players progressing far enough to reach the NBA. Jordi wants to say thank you for all your work, from now on, they stay here.
After reading this, and Im only surmising here, Jordi may feel that he can use the NBA as a frog to get his league across the pond and prove his league is the NBA's equal
Smart guy.
Why not let the NBA spend tons of money around the world to develop the game of basketball. For the Euroleague its simply a marketing subsidy. Why not let the NBA pay their own way to come over and use their biggest stars to promote and brand Euroleague teams, league and players to his fans and customers. Why not let them play Euroleague teams. Euroleague can make some money from the games and if the Euroleague teams win, start defining to not just non American players how good the league is, but to American players as well. If players anywhere in the world, including the USA start understanding that Euroball is as good, and in the eyes of some purists, better basketball than the NBA, why wouldnt American players choose playing Euroleague instead of the NBA ? Why wouldnt non American players choose to stay here rather than go to the NBA ?
Maybe Im seeing something thats not there. But I would prefer not to underestimate possible competition. Jordi is absolutely right to keep NBA teams coming over there, and supporting his players going to the USA. NBA players can become global brands and the more international players that beome global brands, single name players like Dirk, Pau, Yao, Tony, the more credence to his argument that their basketball is as good as NBA basketball, and the brilliance of it all is that the NBA teams pay for it on both sides. We pay the players salaries. We pay to develop them into brands. We pay to come to Europe. We pay their teams to get players out of their contracts and help subsidize the teams. The money right now is on the American side, so why not let the Americans foot the bills. They do it for the Olympics, why not Euroleague ?
I'm reading a really good book, Behavioral Corporate Finance, and it discusses how executives approach business decisions and one of the recurring themes reflects arrogance in the decision making process.
Is the NBA showing arrogance by presuming that its our job to build basketball around the world and that we will be the primary beneficiary ? Is our arrogance blinding us to the possibility that we are subsidizing a world class competitor ? I think its something we in the NBA have to consider.
If basketball players around the world truly have become equal in skill to American players, could the number of international players in the NBA be more a function of our style of play than any superiority in quality of play ?
If you look at NBA rosters and estimate that there will be about international 75 players that make team rosters, in glancing at that list, fewer than 10 are under 6'5. Which means almost all of our guards are North American, and a disproportionate number of forwards and centers are international. Which makes perfect sense. How many professional sports are better suited for tall guys than basketball ? Which sport are the tallest guys in their class in any town in the world funnelled to ? Basketball.
Which all leads to the question that Jordi touched upon. Why would international players come to the NBA instead of staying in Europe ? Couldnt the Euroleagues dominate basketball quality by just keeping their best big men over there ?
The come because of money. Pure and simple. Does anyone really think that if the pay was higher in Europe that all these players would face the culture shock of coming over here to the NBA ? Heck, even if the pay is close in Europe, because of different tax rules and the tax free perks they can get , they might stay over there. There is no salary cap. No limits of practice. The games and season are shorter, so careers can be extended. You can make a lot of arguments about advantages of playing in the Euroleague.
Right now the edge is to the NBA because of the money. Which means the NBA has risk on multiple sides. If we continue to subsidize international basketball and they grow economically, they may be able to financially support salaries comparable to ours. If we continue to help Euroleague grow their brand., Euroleague could easily supercede the NBA (if they havent already) as the dominant league outside the USA and money that the NBA hopes will be available for NBA rights will go to Euroleague . Finally, if the NBA stumbles in the USA financially at all, our ability to pay higher salaries might decline or disappear, propelling the Euroleague to a dominant position.
I personally, and I know Im not alone in the NBA with this perspective, believe we face a risk of not getting the job done here in the USA. That rather than trying to help Euroleague dreams come true, we should focus on helping NBA dreams come true. Its great that we are building basketball fans around Europe and the Rest of the World. I would rather build basketball fans in the USA. Its great that in the future someone will come from Dnepreprost or Monte Carlo and say they became an NBA player because they saw Tony Parker play an exhibition in France, or Shaun Livingston in Moscow. I would rather hear stories about kids becoming NBA fans in Louisville, Lexington, Boise, Tampa, Cincinatti, Kansas City and other non NBA cities because they went to see an exhibition game in their city.
Believe it or not the financial future of theNBA depends on 500k viewers on average for an NBA game on our cable TV partners. If we add 500k viewers on average for an ESPN or TNT regular season game, we are heroes. If we lose 500k average viewers, we are zeroes, hoping the Euroleague buys contracts of our expensive players from us.
I know all of this reads like a prospectus for an IPO, outlining all the potential business risks, but these are business elements that we need to take a closer look at if the NBA is going to excel as a business going forward.
The NBA vs the Rest of the World
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Reader Comments
(Page 1)2. I completely agree with you regarding the rise of the Euroleague.
This is a serious business threat to the NBA and the NBA does not even realize.
I came back from a trip to Italy last year where I took time out to watch a Euroleague game in Milan. Barcelona against Milan. or FC Winterthur against Armani Jeans. Whatever the teams are called.
Point being, I later told my friend Coach Donewald (who coached in the NBA for 4 seasons with Paul Silas) that I thought Euroleague was a better brand of basketball than the NBA. He completely agreed.
The best business move now for the NBA is to establish a worldwide Champions League, as they have in Europe for the top club teams. It is "the" league championship to win in Europe, and its brand of soccer is the best in the world. Many soccer mad folks like myself enjoy it more than the World Cup, because the teamwork is better.
A Champions League of basketball would head off Euroleague's moves to prominence in the world. It would make the Dallas Mavericks a global brand as well, much like Chelsea FC and FC Barcelona.
Financially-speaking, it would be a windfall for the clubs such as yours. These would be big ticket events, not to mention the worldwide television/online audiences.
It has to be done this way. It is just a better idea than the NBA. The world has changed. The NBA needs to change. In the connected, global world of 2006, the NBA is a bad idea compared to an international, Champions League-styled event. Its a better idea for the NBA brand, the Dallas Mavericks brand and the various other brands that are tied in with basketball (Nike, Spalding, etc.)
As we saw today, CSKA dominated the Clippers. The playing field is almost level, if not level. Now the teams need to play each other.
As a basketball nut, I want to see CSKA Moscow play the Miami Heat. I would pay more money to see the Dallas Mavericks play the Maccabi Tel Aviv than I would to see the Mavs play against the Atlanta Hawks or any other bottom feeder in the NBA.
So there you have it.
Posted at 3:56PM on Oct 7th 2006 by Desmond
3. I don't always agree with you (actually, most of the time I don't) but I think you're hitting a cord on this one. A decade ago, I was working for Landmark Communications. When the web started to boom, I asked our leadership why we weren't keeping up. It was really frustrating to me that we weren't. Their answer? Let everyone else spend their money and then we'll buy in when things settle down. It was a brilliant move, they didn't lose a dime when the bust came.
Though they are still slow at adopting the web, newspapers are starting to reap the benefits of it.
4. Very interesting points. I never really understood your argument on the NBA subsidizing international basketball, footing the bill to promote it, but now I think I get it. My question is will the money ever be there in Europe? I thought I read somewhere that basketball is the 7th most popular sport in Germany? There was a story on the local news during the playoffs about three guys who get together to watch the Mavericks games at 4 in the morning. I just wonder how far away they are from truly competing for the best players....
Posted at 5:05PM on Oct 7th 2006 by Tim
5. Mark, money is the last reason international players want to play in NBA. They go for the competition, for the fame, for the magic. NBA is a magic world, the Mecca of basketball, not only in the four lines of the field, but all the atmosphere.
The problem is not Euroleague.In reverse, Euroleague maybe will wake the NBA and help it to recognise its position.
The problem is the NBA itself. NBA is in danger to lose the magic, to lose the brand that players like Magic Johnson, Larry Bird and Michael Jordan had built.NBA must search and find the solution why this is happening.
If NBA can't sustain the magic, then it is fair to rank it as Euroleague or another international championship.
Posted at 8:06PM on Oct 7th 2006 by kostas
6. Hey Mark, hope you read the comments (especialy this one)
Anyway
I think you've got a lot of things wrong in your post.
First of all I think you're wrong about your opinion about Bertomeu and his "Schemes"
I think his main goal is not competing the NBA but making the Basketball more popular across Europe and the world and being on the same level of popularity as soccer, handball and other types of sports. Thus making the teams earn more money of TV contrucrts and rights and maby even making rich man to invest in the basketball across Europe.
And I must say that he does quite a good job in the past few year, Tickets to Euroleague games are being sold out in Spain, Israel, Greece and Italy, The number of spectators in games is rising every year and the recent success of European teams and Euroleague players on the international level has added to the popularity of basketball. After Spain, where soccer is the most popular sport event, had won the basketball world championship, it was reported in the front pages of the newspapers there.
However, it is still not that popular in Europe so there's still much work to do, and by organizing his international tournaments and even wining NBA teams like Barcelona did against the Sixers and CSKA against the Clippers can only rise the popularity.
In my opinion in order to really compete the NBA and the rediculasely high salaries (Honestly, I don't see any logical explanation for players like Brian Scalabrine to make 2 millions a year), the Euroleague needs billionairs like yourself and other NBA owners.
DOn't know if what exactly the busget of your team or the average budget of other NBA teams but it's much higher than in Europe.
The "Richest" basketball players in Europe make approximatly 2,000,000 dollars a year, and top teams' budget in Europe is mostly between 10 to max of 20 million dollars, Kobe Bryant himself makes more money.
Therefore, I don't see players like LeBron and Kobe move to play in europe anytime soon.
And it brings me to my next point.
Even though it does happen, and those billionairs come, and the Euroleague will threaten the hegemony of the NBA I don't see anything bad in that, actually I think of the opposit.
I think the during past decade the basketball in the states has been corrupted. Suddenly the only thing that intrests the players is money.
Both players, fans and even coaches have forgotten the true essence of basketball which is team work and effort.
I see people across the net argue that the basketball in the NBA is the best because it has the best talents.
I think it's undoubtful that the NBA has the gratest talents, but only talents don't make a good team, but also coaches and a lot of team effort and hard work.
Therefore I truely hope that the main purpose of Stern is not only making the NBA more popular, but also make the Americans and the NBA players understand the way basketball played in the NBA is wrong. And start practicing on playing together and be better team players and coaches, because the coaches in Europe are much better, and the way the game played in Europe is much closer to it's true meaning. I hope it will teach you americans to be less arrogant and ignorent. I think that announcing the NBA champion as a WORLD champion is a good example. And thats why I think Stern is doing a great job and I hope it makes the fans enjoy a better basketball.
Don't agree with your saying about making the basketball more popular in the States, I think it's populistic because the basketball is already very popular in the states (and the reason European players want to go there is not only the money but the DREAM, not everything is money), in Europe however it's not that popular, and making it global can make the teams get more money, thats my opinion. I think as a capitalist you should think the same.
That's why I don't think thare's anything wrong with what Stern and Beromeu do, and I really hope they succeed with their doing.
That's probably it, I'd be quite surprised if you've got this far, and hope to read your opinion here, or by mail.
Yours Nathan.
P.S
Hope you win the NBA championship next year, you really deserve it :)
Posted at 8:59PM on Oct 7th 2006 by Nathan Alpern (From Israel)
7. I travel to Europe frequently, and I just don't see it happening. The only team sport the masses care about is soccer. The sports channels are dominated by soccer and individual sports that you would find in the Olympics.
Posted at 9:50PM on Oct 7th 2006 by fast eddie
8. Don't know what you're trying to prove, it is obvious the soccer is much more popular than basketball, didn't say the opposit.
But there is still a possibility rising the popularity of basketball much more than it's nowadays. Probably not higher than soccer, but we could try to narrow the gap :)
I now the situation in the present and also Bertomeu does, but I don't see whats wrong in trying to rise the popularity of basketball, and actually he's quite succeeding in the lastfew years.
Posted at 7:09AM on Oct 8th 2006 by Nathan Alpern (From Israel)
9. I love to read your blog because it makes me think. It always amazes me that people read their own thoughts into what you write. If I understand the piece,the Euroleague is more than willing to continue taking your (NBA) money to build THEIR brand, not yours. Those who claim soccer is king (which it may be right now) should ask themselves how many countries was Euroleague seen in five years ago? You can bet it wasn't the current 120. The Euroleague brand is growing and some day in the future it will flex it's muscles and tell sugar daddy to stay home. The NBA is not immune from suffering the same fate as the NHL. There may come a time when the $20 million salaries go the way of the Edsel. Things tend to be cyclical in this country and if I was in the NBA I would worry about my image at home and how to build a fan base that will stay loyal through the tough times that are sure to come some day.
Posted at 11:35AM on Oct 8th 2006 by Michael Genette
10. The best brazilian soccer players all play in Europe.
Why ?
Money 1st
Better structure 2nd
As long as the main targets of NBA-related marketing are in the US and players are also paid for this, it'll be hard to attract talent from the NBA.
If you consider that the NBA promotes the stars more than the teams, and people pay to see and emulate the stars, than the league is still getting the best deal - today.
But if the people in the US who pay to watch and consume basketball do not care about rooting for home teams and start caring about competitive basketball and teamplay - then Stern's model fails.
In my point of view, the US market is - still - much more relevant so the NBA won't change things much.
Posted at 3:36PM on Oct 8th 2006 by Marcos Carreira
11. I am a Dallas native who lived there off and on for 25 years and now live in London. I believe your "prospectus" is off the mark. We are in a global economy and your "let's just worry about our own turf" is going to put the NBA in a worse situation in the long term. I think one of the big problems is that NBA coverage is not accessible enough in other countries. Example: in order for me to watch the Mavs in the Finals last season I had to download some dodgy Chinese streaming app and watch the game on my laptop from a feed in China. Did I mention all the commentary was in Chinese. How difficult would it be for the NBA website to stream live coverage? Come on Mark... isn't that why you started Audionet???
Is it that difficult in other countries besides England to watch NBA games? I know there is an audience for it. I was in Istanbul last week and on some nights a particular TV station was airing old NBA playoff games. One night I watched the Western Conf Finals from 1998. This is in Turkey!!! You can't tell me there is not a global audience for NBA basketball. When I am in the States I can turn on Fox Soccer Channel and watch games all day from the best leagues in the world. Is it as easy to do that for the NBA in other countries? It should be.
Yes football, excuse me, soccer is the dominant sport worldwide but I believe that basketball is the one sport that can compete with it. Here's why... basketball, like soccer has simple equipment and can be played most anywhere (i.e. pickup games). American football, cricket, baseball, hockey, rugby all need lots of equipment, large fields or special conditions to play. Second, basketball like soccer (outside the US) is a popular inner-city or working-class sport mostly due to reason one. Most of the world-class soccer players grew up in poor, inner-city environments. Same as with many of the NBA basketball players. Third, basketball is associated with urban, hip-hop culture which makes it very appealing to teenagers and young adults. American hip-hop culture is extremely popular throughout the rest of the world. Teenagers see music videos of there favorite American rap artists wearing NBA jerseys. They want to wear them too.
When you say that the NBA is wasting money on overseas marketing, my response is that maybe you should rethink your overseas marketing strategies. I believe if you stick to just focusing on the US market you are missing out on a golden opportunity.
Posted at 5:47PM on Oct 8th 2006 by Brant
12. An interesting viewpoint Mark. But really, are you saying the NBA is not benefitting from making basketball a global game? The fact of the matter is American sports in general dont tend to have any following outside of the US thats worth talking about and the NBA is begining to change that. If and its certainly a big if you can ever have basketball become a truly global sport you will see a lot more money coming into the game.
In todays world you cant raise the shutters and say hey we arent paying to develop basketball in other countries cause someday they might be better than us. Because if you do that no one out side of America is going to care about basketball. Today when people talk of watching basketball its the NBA they want to see. Promoting basketball around the world increases visability for the NBA. You talk about the euroleague overtaking the NBA but there is no real evidence to suggest this is likely anytime soon. To pretend the NBA would not react and improve if their domination was challenged is absurd.
Desmond - A champions league for basketball ? you are having a laugh mate. there is no way it gets any following to speak of immediatly because the average viewer of basketball isnt exactly jumping at the chance of watching CSK Moscow play the Heat or Mavs. The logistical challenges would be considerable too. It works in soccer because the teams arent too far off and fans actually travel to opponent games. besides soccer is bigger than the NBA is in America in any of the countries where the champions league is avidly followed.
One big difference is that teams have a real history there. In America there seems to be a real concentration on either the individual or the league with most teams not really being promoted in the same way. I see dirk is ads and I see ads for the NBA but I dont see the Maverick brand being advertised or making real efforts to build a world of following. And the Mavs are one of the leaders in challenging how things are done. Exceptions like the Yankees, Sox, Packers, Niners exist.
Posted at 7:22PM on Oct 8th 2006 by Mihir Bhatia
13. Mark- It's time for you to think about your next investment opportunity; Jordi Bertomeu's thoughts are exactly my argument in reverse for the MSL. Why does Manchester United's worth dwarf that of the NY Yankees? How would your Mavericks payroll compare to say, Real Madrid? It's the ability to reach the global market.If the US developed the top soccer league in the world, something a few Malcolm Glazers could do, the advertising revenues would dwarf the NFL. Second opportuinity: become the new Jack Kent Cooke by putting a NFL team in LA and retaining your Mavericks.
Posted at 10:57PM on Oct 8th 2006 by Patrick Butler
14. hi...FanJam was the best!! tha teams awesome...GL this year!!
Posted at 12:46AM on Oct 9th 2006 by *Bballntara*
15. I love Mark, but sometimes you are an idiot.
If you think that Euroleague is your competitor shame on you, because now basketball as a sport has to make a choice. Do we protect out small pond full of fish called NBA or we share these fish with other ponds and grow grow grow!!!!!! Because you said it yourself “If we lose 500k average viewers, we are zeroes”. As I can see right now NBA is sitting between 2 humongous forces that both share the same name: football. At home in the U.S. American football represented proudly by NFL and college football kicks ass big time and I don’t see them slowing down and worldwide just football, more commonly known in U.S. as soccer kicked ass long time ago and has such domination in so many different sick ways, that it is just scary. Btw I spent this summer in Germany and I saw a lot of different ads with your truly Dirk. My favorite one:” Dirk sits in front of camera and says proudly and clear: I do only 3 things in Germany: practice, eat mother’s cooking and watch Fussball Aktuell.“ It is like Kobe Bryant saying that he does only 3 things in LA, practice, eats and watches NFL postgame show. (Fussball Aktuell is crazy soccer show, that runs every day and that even mighty NFL will be proud off. Basically they invite top people in German soccer from National coaches to club owners and have ridiculous discussions that sound like presidential debate. Some of topics are: Why did I play right footed defender last week at left back position and how it affected overall performance of my team) If Mark will sit and whine that we have to protect our market, increase barriers to entry, protect our product and all other monopolistic bullshit. He will find himself with same ratings as NHL or Arena Football 2 years ago. I see only one way for basketball. Unite, help each other to make money Euroleague plus any other league, Disband the players union. Yes Mark it is hard to believe, but in 10 years the World Championship will not played between winners of Western and Eastern Conferences, but between NBA Champ and Euroleague Champ. Also 10 years from now NBA might be just one of many leagues, but every sport executives most often then not looses the sight of one most important axiom. Protect the game and grow the game. Just finally to give an example of how low NBA is right now, consider case study of FC Barcelona. This one football club has 200k members and membership is not like supermarket membership. One has to pay from 50 euros and up depending on what football club decides to spent on the transfer market in a given season. I don’t see anytime soon someone paying 70 bucks just to be a “member” of Dallas Mavericks. Also I don’t see 200k doing it. So Mark stop whining and just think how Mavericks can become a global brand, so next time when Stern e-mails you informing that he would like your team to play a couple games next preseason in Europe. I hope you say: “Only two?? Screw you David, I want at least six”.
Posted at 2:50AM on Oct 9th 2006 by Tim A. (LA kid)
16. dang son - you should stick to bball - looks like you actually have something to say about it that's not complete nonsense - unlike your youtube hatin.
Posted at 5:30AM on Oct 9th 2006 by Peter
18. LA Kid is right. The NBA is a monopoly. If you want to increase it's exposure, add more teams in underserved cities like New York, Los Angeles, Chicago, Dallas etc... The EPL generates more revenue in a country of 50M than the NBA does in all of the United States. Maybe tickets would become affordable and real rivalries could be built instead of the league spewing this outplayed Kobe-Shaq garbage every season. Maybe then you'll get your ratings.
The first NA league to stop breaking anti-trust rules will blow the rest out of the water.
Posted at 3:21PM on Oct 9th 2006 by george
19. actually, the NBA's revenue last year was 3.75 billion USD compared to the EPL revenue of 2.44 billion USD, so the NBA still has english soccer's number.
Posted at 4:36PM on Oct 9th 2006 by M. Emrich
20. Mark,
Interesting comments as always - but for the first time, I saw you behave like some of the dinosaurs in Hollywood.....why should the NBA remain the "National" Basketball association, why should it not become the "Global" basketball association? - the ideas you suggest all reek of protectionism - pro basketball has a huge and growing population in China and India - and within your fav target segment - the kids and tweens and teens...they grow with basketball and remain fans - so if the NBA someday grew to be like FIFA - well why not - as the owner of a fantastic team, you should be thinking of the whole world as your audience not just dallas or texas or the US....the euroleague is not competition and will not be for the next several millenia - on the other hand, if used properly (by people like you) could effectively spread the good word about basketball to a HUGE audience overseas....I thin it is a great way to hedge your bets against the NFL, NHL, Nascar and MLB here in the U.S......
Posted at 8:01PM on Oct 9th 2006 by Anand Narayanan
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1. I agree with 90% of what you say...but players will leave their country to play against the best, that is the hallmark of a true competitor....why not buy the Euro league and have an NBA Europe, and initially it can function as a type of minor league but someday become the European Conference...then the Finals will be a true World Championship.
Posted at 3:36PM on Oct 7th 2006 by Anthony Perri