NBA “Thinking Like Other Business Enterprises”, Plans African Expansion

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The NBA has announced the seven African cities – Cairo (Egypt), Dakar (Senegal), Lagos (Nigeria), Luanda (Angola), Rabat (Morocco) and either Monastir or Tunis (Tunisia) – that will play host to the Basketball Africa League’s (BAL) 30-game regular season schedule; the BAL Final Four and BAL Final will be held in Kigali, Rwanda. Twelve teams will participate in the league’s inaugural season, which is set to tip-off in March of 2020. Each team is scheduled to play five games. The three teams in each conference with the best records (aka the “Super Six”) at the completion of those games will move on to a round robin playoff to determine the Final Four participants.

Howie Long-Short: The NBA has long tried to grow the game of basketball abroad, so the formation of the BAL furthers that mission. The timing is also right to introduce a pro hoops league on the continent. Bryant McBride, who sits on the board of Ubumwe (a grassroots basketball initiative operating in Rwanda), said “the dollars being spent in Africa aren’t commensurate with eyeballs over there, but people want – and need – ways to spend their increasing disposable incomes.

Partnering with FIBA on the venture was a wise decision. The international basketball federation has experience working with national governing bodies and has proven deft at facilitating competition between teams from multiple countries – each of which present unique political challenges. McBride asserts that “corruption is [also] a problem in many of these markets.” Theoretically, FIBA should be able help the NBA navigate some of these issues; Obama’s involvement certainly won’t hurt.

The NBA has been investing in African grassroots programs for +/- 10 years. To this point, participants never had more than a long-shot chance at being discovered and earning an NBA tryout. That changes with the formation of a viable pro league on the continent, so expect more African-born players on NBA rosters over the next decade (13 made opening night rosters last season). Ken Shropshire, CEO of Global Sport Institute at Arizona State University, said that theories suggest “there should always be a tip to the pyramid. People aren’t [willing to invest the time into being great at something] if there’s no real chance at success. The BAL will give young players something to aspire for.

McBride agreed. He said, “look at Pascal Siakam (plays for Raptors). There’s 50 or 100 other guys like him over there that just haven’t had the opportunity. When professional opportunities are provided regularly, when there is training available on a regular basis, when people can be sure that they are going to get paid – participation rises.

While the BAL provides the NBA with an opportunity to discover talent, Shropshire reminds that the league has Basketball without Borders and camps in francophone Africa and South Africa for that purpose; it doesn’t need to invest in another pro league to find guys who can play. He says that the league’s African expansion is simply a case of the NBA “thinking like other business enterprises. The first-place big business looks to for international growth is China, the next is India and then third is Africa. There’s been all sorts of speculation about Africa’s economic potential and how much is going to be spent there.

It’s unclear exactly what the NBA’s financial upside is on the continent, as Shropshire noted “all of the projections are based on forecasted revenues, not current numbers.” But it’s reasonable to assume that the ceiling is lower than it is in China; the population is smaller and much of the continent remains under-developed.

Speaking of China, the NBA’s investment in the country has yet to really pay off in terms of on-court production, but a 5-year media rights extension with Tencent – worth +/- 3x the value of the expiring deal (up to $1.5 billion) – means the league’s Chinese investment is starting to pay off financially.

Fan Marino: Last season, 108 foreign born players (22% of the league) made an NBA team’s opening night roster. Those players came from 42 unique countries showing how diverse the league truly is. For comparison purposes, MLB – the second most diverse of the big four sports leagues – has players from just 20 unique countries.

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Author: John Wall Street

At the intersection of sports & finance.

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