Name Recognition Not the Only Component of The BIG3’s Formula for Success

Big3

Sports history is littered with start-up leagues that failed to make it past (or in some cases through) their debut season, but The BIG3 basketball league managed to avoid that fate and then grew attendance +25% YoY (to 13,484) in their sophomore season. The league started its 3rd season last weekend armed with 25 hours of live network television coverage (CBS), a new 3-year strategic marketing partnership with Adidas and a deeper player pool – developments that should support its growth. The BIG3 has been successful where so many others have failed before because its players are household names (think: Joe Johnson, Josh Smith, Stephen Jackson, Rashard Lewis). Start-up leagues are introducing new team names, colors, logos and traditions – having rosters filled with players that have some brand equity gives fans a reason to invest their time and emotions into the games.

Howie Long-Short: League co-founder Jeff Kwatinetz insists that there’s more to the formula for success than simply having recognizable names (after all, the AAF had guys like Christian Hackenberg and Trent Richardson). A willingness to adapt the rules of the 3×3 game (as opposed to playing by FIBA rules) so that it appeals to the millennial/Gen-Z fan (think: 4-point circles, games to 50), has enabled the league to draw a “younger audience than all four of the major sports leagues.” It’s not just about adapting rules for the sake of change though. Kwatinetz said that The BIG3 “studied the FIBA game and thought that the game would have looked amateur no matter who was playing. Our rules are a function of trying to figure out why that is, testing our hypotheses and then correcting the mistakes on the fly.”

The BIG3’s ability to keep costs down has also given it an extended runway as revenues grow. Kwatinetz acknowledged that he and Ice Cube (his co-founder) were approached about making an investment in the AAF, but the “money needed to cover the overhead for that league was extraordinary” – the exact opposite of his current venture’s business model. Remember, the AAF was moving teams with 50 man rosters (+ several coaches, trainers and equipment) around the country each week. The BIG3 rosters have just 6 players (+ 1 coach). The AAF was also renting 4 football stadiums each week to host games, whereas The BIG3 requires just a single arena.

Most questioned The BIG3’s decision to hold their games in NBA arenas presuming the venue would be too large, but Kwatinetz said his experience booking upwards of 10,000 arena dates (remember, he ran The Firm) and Ice Cube’s experience as a performer gave the duo the knowledge needed to create the party-like environment that appeals to the younger demographic and ultimately sells seats. Drawing 13,500 fans in 9 different cities (i.e. no season tickets) is nothing to sneeze at. 7 NBA or NHL franchises drew less than 15,000 fans/game this year, including 2 that drew less than 13,500 (Panthers, Islanders).

CBS isn’t paying to acquire the broadcast rights to The BIG3, but Kwatinetz says that “if there was one takeaway from our research and modeling of the RSN business, it was that broad exposure is critical to a sport’s success; leagues needs to be in front of as many people as they can and CBS allows us to do that.” He’s right, but the league didn’t have an impressive debut on the network. As Bob Williams (SportBusiness) noted, it was “the least-watched primetime show on CBS since at least ’92.” On a positive note, it drew the lowest median age on the network since ’09.

To be clear, The BIG3 didn’t figure into Kwatinetz and Ice Cube’s bid for the 21 Fox RSNs. While the upstart basketball league might be worth $300 million, the cable networks sold for upwards of $10.5 billion. Kwatinetz said “you don’t take a $200 million or $300 million asset and roll it into a $10 billion asset. That just doesn’t make sense.

Fan Marino: I understand that the league carries a level of nostalgia that makes it attractive to fans, but I’ve had a hard time grasping why anyone would want to watch guys that are presumably over the hill play sports. Kwatinetz makes a compelling argument though. He said that “the problem players run into as they get older is that while their ability to shoot remains high and their basketball IQ is rising, their physical abilities decline; they can no longer run the floor with 22 year olds or play on the 2nd night of a back-to-back. The 3×3 game eliminates a lot of those problems and what you’re left with is high quality basketball.”

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Author: John Wall Street

At the intersection of sports & finance.

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