$5bn Int’l Basketball League Concept Flawed, Stars Not Primary Driver of Fandom

$5bn Int’l Basketball League Concept Flawed, Stars Not Primary Driver of Fandom

Maverick Carter is reportedly advising a group of investors piecing together $5bn to launch a new international basketball league. Galaxy Entertainment, (a Hong-Kong listed hotel and casino group), the government of Singapore, and Sela (a Saudi PIF owned events company) are all said to be backing the endeavor.

There is seemingly a belief that a well-funded startup league could attract top players with compensation packages that include ‘enticements beyond pay’ and rival the National Basketball Association.

“I sold my ownership in the Warriors last year, in part, because I was pretty sure competition for the NBA was coming a la LIV Golf vs PGA,” venture capitalist and All-In podcast co-host Chamath Palihapitiya recently wrote on X. “The (speculated) antics [related to the Luke Doncic trade] only reinforce the likelihood that a group of well heeled investors with $5-10B could quickly stand up a competitor to the NBA.”

But that logic is fundamentally flawed. It fails to understand why passion for the Association and its teams exists, or why fans engage with the product.

“It’s not the stars on the court that incentivize fans to engage,” Ben Valenta (co-author, Fans Have More Friends) said. “It’s the people sitting next to them in the stands, [in their house, or in the local community].” 

Sport facilitates social connection and enables fans to build and maintain meaningful relationships that make their lives better. 

If one simply views sport as another form of entertainment, then it is easy to conclude, as Palihapitiya did, that the top players are the ones driving engagement; like a lead actor or actress does in a movie.

And if you see sport through that lens, it may look as if there is no real moat around the established leagues. A challenger property with enough money could entice many of the best players to participate and create a more entertaining alternative. The additional entertainment value derived would, in theory, draw fans in and enable it to upend the establishment.

To be fair, sport does resemble other entertainment products from the outside (at least downstream). Fans purchase tickets to games, no different than a Broadway show or Hollywood flick, and watch their favorite teams/leagues on the same broadcast platforms that they consume sitcoms and movies.

But that framework is wrong!

While sports are entertaining, the players are not the primary reason why fans are willing to invest so heavily in a given team or league. They are motivated by the social connections that sports facilitate and the cohesion it spurs within their life.

“Without the active social network that sports and fandom can enliven, there would be no engagement,” Valenta said.

Fans Have More Friends profiled a New York Knicks fan from Orange County, NY, who has been going to ~35 games/year for the last 30+ years. He cites the hour-plus long commute to and from Madison Square Garden on game nights as a feature, not a bug, of being a season ticket holder; it gives him uninterrupted one-on-one time with his son. 

When this Knicks fan gets off the train and walks into The World’s Most Famous Arena, he shakes hands with the ushers and staff who have come to know him over the years. When he enters the barber shop, the conversation immediately turns to the previous night’s game. His entire existence is enhanced by being a fan of the NBA club.

Engagement is defined as any action tied to revenue generation. It can be a direct purchase (think: ticket or merchandise sales) or an indirect activity (think: consuming media).

And “fandom is passion plus [engagement],” Valenta said.

Don’t get me wrong. The stars, stakes, and drama all play a role in driving fan engagement. 

They’re just not the primary catalysts. There are a TON of boring and/or non-competitive matchups between bad teams without star power across sports, and yet, fans continue to support those franchises and tune in to watch or attend their games. 

Sure, some people are just loyal. Others simply want to be able to say during the good times that they stuck with the organization during the hard times.

But for most, the team or league is a commonality in an increasingly fragmented world.  

Sports are “the thing we talk about with other people. It anchors many of our closest relationships,” Valenta said.

If you understand that, you come to a far different conclusion than the one Palihapitiya arrived at.

True success for challenger leagues isn’t about selling tickets or making headlines. It’s about beginning to cultivate social connections and being able to regularly create moments that facilitate family bonding and/or strong emotional resonance. 

Remember, fandom is a learned behavior that requires repetition. 

And “when those repetitions are shared among close friends and family, they are stickier,” Valenta said. “That’s why [the most] engaged fans tend to inherit their fandom from their family.”

It also takes time to become a passionate fan. The WNBA’s recent spike in popularity comes almost 30 years after its inaugural season.

That isn’t necessarily how long it would take for a new international basketball league to compete with the NBA for some fans. But one must assume they will need at least a generation to unseat the established giant.

They’ll need their first-gen fan base to grow up and have kids to indoctrinate into fandom before the flywheel can truly take over.

Perhaps it takes less time in an individual sport, like golf, since there are no team affiliations to break amongst fans. But it is still going to take years, if not decades, for a challenger property’s events to truly feel ‘special’.

Just look at professional golf. While fans of the sport will tune in to watch golfers they like compete in a LIV event, or attend if the property comes to town, they go out of their way to watch the Masters, regardless of who is competing; and then they discuss the event with their social network. 

Challenger properties can get there. It just requires realistic short-term expectations and a financial commitment to stick it out for the long-haul. 

Anyone thinking they are going to start a new league from scratch and challenge the establishment overnight are going to be disappointed. The best they’re going to do is impair it on the edges in the short-term (think: viewership decline).

All the star power in the world can’t spur passion.

Only time and social connections can do that.

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