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Saturday, October 23, 2010

NBA Outlook is Dismal

Read here and see what I mean.

Either there are too many teams or the players are making too much money or there is a little bit of both. The owners are gearing up for a lockout for next season or a complete shutdown of the entire season. The players' union is telling its players to save their pennies (and hundreds of thousands of dollars) so that they can ride out the armageddon that the next collective bargaining agreement could be.

Commissioner David Stern hasn't been fully clear on the league's strategy. At the same time he boasts of 600,000 basketball hoops going up in China, he laments the current economic structure of the league. And, no, he's not "outsourcing" NBA jobs to China; he wants demand for basketball to grow so much as to eclipse the popularity of soccer as the world's favorite sport. It's an interesting thought -- to expand all over the world -- but that's hard to do when your core is weak.

So, what's the strategy? Have a core which is the NBA and all sorts of hubs, or have the core be not the entire NBA (including players and teams) but the NBA's front office, which then would have many hubs, including the NBA USA. The latter seems to make more sense and seems to be where the NBA is going, or, where it should be going. The owners might see more revenue in 20 years from NBA's all over the world than from residuals from leagues all over the world and the NBA in the USA. Consider the huge populations in India and China, not to mention Russia and Brazil, and you'll understand why.

But that strategy will require a pivot, because right now the NBA is almost totally the U.S. market and the league that plays in the U.S. And those players who play in the U.S. create the worldwide demand for merchandise, so while the NBA fathers might want a bigger international footprint, their golden goose is the image that's projected with guys named Bryant, James, Nash, Stoudemire, Paul, Durrant, Pierce, Noah, Howard, Duncan and the like. Wreck the uneasy relationship between ownership and players and you'll damage your brand and create a credibility problem for any international strategy. (Apparently the relationship between the players and owners is so toxic that the league has advised vendors about potential demand for merchandise for next season -- and that outlook is dreary).

If you're an NBA fan, you should be very concerned. Your league's current economic model isn't sustainable.

Or so it seems.


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