Businessweek Archives

The Nba's Fast Break Overseas


Sports Business

THE NBA'S FAST BREAK OVERSEAS

Clyde Drexler, the Portland Trail Blazers' talented guard, drives d owncourt. The arena erupts with the familiar chant: "DE-fense! DE-fense." With a graceful layup, Drexler scores two points against the Los Angeles Clippers. The capacity crowd of 14,239 cheers the score--and Clyde.

Are these fans rooting for both teams? In a way. Almost all are Japanese, and this game is the first nonexhibition, regular-season contest ever played in Japan by the National Basketball Assn. Drexler is a big star here: Tokyo chef Kazua Koidabashi has even shaved the sides of his skull and written "Go Drexler" in red and black marking pen. His courtside seat for this Nov. 5 event in the Yokohama Arena cost $350.

Call 'em the NBA Globetrotters. With revenues topping the $1 billion mark that NBA Commissioner David Stern predicted five years ago and with U.S. arenas filled to an average 92% of capacity all season, basketball is a mature business in the land of its birth. Yes, Toronto's Raptors and the Grizzlies of Vancouver will provide some growth beginning in 1995--as will the expected expansion team in Mexico City a bit later. But Stern is looking farther afield for major revenue increases: to Europe, Latin America, and especially to Asia. So the NBA increasingly is hitting the road to solidify its rep as the only major U.S. sport that so far is truly global. In two years, Stern hopes to have all the nba's business opportunities--in tv, merchandise, and events--staffed and running at full speed on six continents. In startup markets, he's looking at potential growth of 20% to 35% a year in the short term. But "we're in growth businesses overseas," says Stern. "So, we're not setting dollar targets."

The 1992 Olympic Games were a watershed for the nba. By sending the Dream Team to Barcelona, the league "moved our international effort ahead 10 years," says Rick Welts, president of NBA Properties Inc., the league's merchandising unit. To Welts, Barcelona was "the most important event in the history of the sport." Drexler's popularity in Japan, for example, comes from having played on the Dream Team.

From Rotterdam to Jakarta, fans crave American hoops. The hottest markets: Australia, Israel, and Japan--with Germany and Britain surging dramatically since 1992. D&F Group Ltd., an event-sponsorship agency in Washington, D.C., whose clients include Bausch & Lomb and Chrysler, gets calls from local promoters as far away as Manila begging to be hooked up with the nba. Says Allen Furst, the "F" in d&f: "Of U.S. pro sports, the NBA is No.1 in international expansion and awareness."

RESTLESS NIGHTS. Stern's overarching global strategy involves barter-syndication tv deals that bring basketball into 140 countries at last tally. The league is turning the NBA Game of the Week and NBA Action into worldwide boob-tube staples, holding in reserve commercial time on each overseas channel that it can sell--or trade--to big-deal marketers, especially such "global partners" as Coca-Cola, ibm, McDonald's, and Nike.

For a few weeks before the Japanese season opener, Stern spent some restless nights. With baseball shut down and hockey stalled by a lockout, speculation by the sports booboisie was that basketball, whose players and owners lack a current collective-bargaining agreement, would also become mired in a labor-management dispute. McDonald's Japan was counting on a "Be the Best nba" promotion in Japan with a Yokohama opening-games backdrop. But on Oct. 27, Stern and National Basketball Players Assn. honcho Charles Grantham announced a "no-strike, no-lockout" accord that guarantees the 1994-95 NBA season will be played in its entirety. Meanwhile, the NBA and its players will haggle over shares of the league's "undefined revenues"--now about $105 million to $115 million--which include all the overseas dough but don't figure in the current division of the spoils. While Stern and Grantham say league sponsors don't influence their talks, sources acknowledge that the likes of Coke and Nike would be more than miffed at a cave-in at the NBA gold mine.

Everyone talks--or moans--about how pro sports has become Big Business. But these days, it seems that the NBA is the only league to unabashedly acknowledge that truth--and act on it accordingly.Carl Desens in New York, with Eileen Drage O'Reilly in Yokohama


Burger King's Young Buns
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus