The American sporting giant sees us as a lucrative market
The people who run football’s Premier League are prone to boasting of its international appeal. The numbers are undeniably impressive. The competition is watched in almost every country, and attracted a cumulative television audience of 4.8 billion viewers last season.
However, league officials received nothing but opprobrium when they came up with a plan to create an extra round of matches to be played in key overseas markets, from New York to Beijing and Sydney.
The hostile reaction in England to the Premier League’s plan was in stark contrast to the reception British fans have given to American sports that are attempting to go global by staging fixtures in Britain.
The irony is not lost on David Stern, head of America’s National Basketball Association (NBA) and one of the most powerful executives in world sport.
Next month the NBA will try to increase the appeal of its game in Britain when two of its teams, the Miami Heat and the New Jersey Nets, play a preseason friendly in a sold-out match at London’s O2 Arena. The NBA hopes it will kickstart a wave of interest in a sport that is popular all over the world except, curiously, in Britain.
“Of all the markets we have visited, the one with the greatest potential is the UK,” said Stern. “Basketball does not have the tradition here that it has in other European markets.”
The NBA generates revenues of $4 billion (£2.1 billion) a year, with about 15% of that, $600m, coming from outside North America. Its income is derived from television rights, merchandise sales and, increasingly, from its internet presence.
Only a fraction of that $600m is made in Britain, where basketball has little exposure on television and has failed to capture the public’s imagination.
It is not through lack of trying. Over the years business-men such as Harvey Goldsmith, the impresario, and Chris Wright, the founder of Chrysalis music, have owned British basketball clubs, only to find the sport struggled to compete against football.
Such is the power of Britain’s most popular spectator sport, that many domestic events struggle to challenge its hegemony, never mind imports from America. That hasn’t prevented them from trying, with professional ice hockey and American football launching strong efforts to make an impact here.
Steve Martin, chief executive of M&C Saatchi Sport & Entertainment, said the NBA’s structure and its “increasing determination” would help it edge out its compatriot sports in the bid for wider appeal.
There have been several false dawns in Stern’s attempts to nurture a love affair between the British and the sport he governs. The NBA first staged a match on these shores in 1993; the experience was not an altogether happy one. “We had to bring in the flooring, the sound system, the lighting,” said Stern. “We made a decision that we would come back to an arena that was more suited to displaying our game.”
The league made its O2 debut last year and the experience was positive enough for it to decide to return. Beyond that, it is not clear what may lie ahead, but Stern believes that the 2012 Olympics may be the NBA’s best hope of gaining serious traction in Britain.
Experts believe that basketball could take off over here, but it may require more work.
M&C Saatchi’s Martin said: “No question, there is an appetite for the NBA but it’s whether that can be sustained by one-off matches.”
A sign of its commitment to growing in Britain is that the NBA has moved its European headquarters from Paris to London, where it now has 30 staff.
Stern admits that expansion is even more important given the state of the American economy, and that sports cannot afford to be complacent.
“It is inconceivable that [the downturn in the economy] will not have some impact on the sport,” he said. “As families are required to cut back on spending, they are more likely to consume their sport on television than in person.”
He said that attendances last season were unaffected, but sea-son-ticket renewal rates “are not quite as robust as last year”.
Stern knows a thing or two about tough times. When he took over as commissioner in 1984, the NBA was on the brink of collapse, with five of its teams on the verge of bankruptcy. He is widely credited with having turned the business around, making icons of its most prominent stars, including the likes of Michael Jordan, by putting them on lunchboxes and video games, and transforming the NBA into the cash cow it is today.
An obvious sign of the NBA’s health is its latest deal on broadcasting rights. Stern recently locked in a new television contract that begins with the impending season, starting on October 28, and runs until the end of the 2015-16 season. The eight-year agreement is understood to be worth about $7.5 billion, a 20% increase on the previous six-year arrangement.
“I was a young lawyer when I signed the first deal for the NBA with cable television and we got $400,000 a year in 1979. If someone had asked me then what the figure would be in 2008, and I had said about $800m per annum, they would have put me away.”
That sentiment could also be expressed about the growing popularity of the NBA in China, which represents the biggest opportunity for the sport outside America.
It’s the numbers that do it. “There are 300m people in America. There are 300m basketball players in China,” said Stern. Such is the scale of the country, the league has carved out more than 50 separate television deals there to make sure it can be seen by as many fans as possible. The league has set up an affiliate, NBA China, and in January sold a minority stake to outside investors, including ESPN, the Walt Dis-ney-owned sports broadcaster, and Bank of China.
It is unlikely that Britain is ever going to be as nuts about basketball as the Chinese – who, Stern points out, had a team competing in the sport at the 1936 Olympics – but if he could finally persuade Britain to truly embrace the sport, he would be very happy.
Filed under: Updates | Tagged: American, arena, billion, David, fixtures, giant, jersey, league, London, lucrative, market, O2, opprobrium, premier, Scores, Sporting, stern, UK
I would like to thank you for a thoughtful and provocative post regarding the changing dynamics of the NBA, specifically regarding its attempts to increase its popularity in new markets. You have clearly researched the subject, providing pertinent examples of the way in which Commissioner Stern and the NBA are trying to implement their product overseas. I was impressed with the way in which you approached the subject, by first contrasting the international expansion of the English Premier League with the international expansion of the NBA. I find it interesting that of the NBA’s annual $600 million revenue overseas, the UK provides such a small proportion. I understand that most/all of the sports attention is focused on the Premier League, but I am surprised that basketball “has failed to capture the public’s imagination,” when it seems to be quickly increasing in popularity in other parts of Europe, including places where soccer is prominent as well. I wonder if you have any further thoughts on the subject? In any case, I certainly agree with you, then, that the upcoming 2012 Olympic Games in London will be the greatest opportunity for Commissioner Stern to attract a following for the sport. It undoubtedly seemed to be effective during the Beijing Games, although China has certainly had an NBA following for quite some time, including a marketable star of their own in Yao Ming. I was actually surprised to learn that there had been prior attempts to implement basketball into Britain’s consciousness, although I suppose such attempts were not well publicized because of their failures.
What really piqued my interest in this post, however, was the latter portion, in which you cite Stern’s concerns regarding the current economic crisis, which, as I’m sure you know, has taken a turn for the worse today, with the House’s rejection of the bailout plan. Clearly, sports are not the primary area of concern with regards to the crisis, but it is interesting to consider that if/when ticket sales are adversely affected; expanding television markets will become more of a necessity than a desire. Obviously, Britain would provide a very large market, both for television and for merchandise sales, depending on whether or not the upcoming Heat-Nets game has some success in stirring interest. I wonder, however, if you have considered that while the economic crisis will force Stern to expand markets, it will likely also have a negative effect in the British economy, consequently making it difficult for basketball, a new form of “luxury spending,” to gain any traction.