The NBA’s Global Plan
The first in a series of stories looking at the NBA’s globalization efforts.
by Kyle Stack / @NYsportswriter
No U.S. sports league has established an international presence quite like the NBA. Before the NFL began playing regular season games in London and before a slew of MLB teams were setting up baseball academies in Latin American countries, the NBA was already immersed in its globalization efforts.
Mark Barak, the league’s VP of International Development, was brought aboard in 2009 to continue the NBA’s branding internationally. With 16 offices across the world, including in New York City, and 442 events in 191 cities in 30 countries in 2009, Barak has a sizable responsibility to ensure the NBA is recognized world-wide.
This will be the first in a series of stories through the ensuing months that discovers how the NBA develops its international presence, with future stories taking in-depth looks at the regions around the world in which the NBA has developed its brand.
SLAM: What are your day-to-day responsibilities?
MB: As Vice President of International Development, I am responsible for our international strategy and corporate development. I also have responsibility for new arena development world-wide and also our involvement in rolling out NBA-branded destinations in certain markets.
SLAM: How does the NBA identify a country in which to market its brand?
MB: I think that we first look at the underlying popularity of the sport. There are clearly countries where basketball has more of a history of being participated in and being watched. We really see ourselves as a global brand. In most markets, it’s a second choice to soccer. Then we look for media partners, marketing partners and fans.
SLAM: How do you compete with soccer in Europe? Do you hope basketball becomes a replaceable sport for soccer?
MB: There is fan demand for more than one sport across the world. Soccer clearly is a very popular sport in Europe and many parts of the world. In some of our key markets like China and Spain, basketball is almost as popular, particularly in China.
What we’re really looking to do is create platforms for fans to experience the NBA either through watching it on television, consuming highlights and other content online and through mobile means. They also participate in events, whether they are clinics, camps or more entertainment-focused events like NBA Jam Van. Or buying our merchandise, apparel and non-apparel, and going to arenas in markets where we have preseason games so that they can experience the NBA product in-person. That’s really our business internationally.
SLAM: You mentioned China, so let’s talk about the NBA’s efforts there. When was the turning point in NBA popularity there? Did it occur when Yao Ming was drafted?
MB: There’s no question that Yao Ming had a very positive effect on the attention that the NBA got in China. But bear in mind that basketball has been played in China for 100 years. So China is a very basketball-centric country. The NBA has been present since the late ’70s when we played an exhibition game there. (That exhibition game took place in 1979 when the Washington Bullets traveled there on their own accord.)
Commissioner Stern and the entire NBA had a vision for the NBA’s potential in China for many years. In 2008, we actually did something that no other league has ever done. We formed a separate company in China, called NBA China, and sold off about 11 percent to outside investors and raised $253 million. (There were five partners in that deal — ESPN, Bank of China Group Investment, Legend Holdings Limited, Li Ka Shing Foundation and China Merchants Investments.) That created a local independent company that is majority-controlled by the NBA. That took our business in China to the next level.
SLAM: Does the NBA devote more development efforts in China than in any other country?
MB: We focus globally across our international markets. We have a large business in Europe. We just announced we’re opening an office in South Africa. We have NBA Latin America, NBA Asia, so we are focused globally. Our different regions are at different stages of their development. On some metrics, China is our most developed international region and in some areas like India and the Middle East, a lot of the initial growth of setting up operations is still to come.
SLAM: Which countries are most receptive to mobile-based marketing?
MB: We see mobile as a huge opportunity everywhere. The stage of roll-out of 3G is different in certain markets. China is in the stage of rolling out 3G; that process obviously happened in Europe and in the U.S. China, for example, has the largest base of mobile subscribers. In China, a lot of mobile usage happens in Internet cafes. Internet is going to be a really important platform for us to reach our fans. There are more mobile users (780 million) than broadband users in China.
We see mobile as a huge growth platform for our digital business internationally, whether it’s through applications or mobile gaming or social gaming. What we’re about is developing compelling digital content across video, gaming, community social marketing and e-commerce and distributing that across all platforms. Because the platforms are all converging. Five years from now, whether you’re on a Mac or on a mobile platform will matter less because what you’ll be accessing on your phone is the Internet. It’s really about developing products digitally that are compelling to fans and then distributing them to them across all platforms.
SLAM: When you enter a country that might not be as exposed to mobile devices, do you try to connect with them more through physical events?
MB: We definitely plan our marketing programs based on the local dynamics of the market. Mobile happens to be an area which is pretty pervasive and advanced in almost all our markets. There may be slightly different stages of 2G, 3G and when is 4G coming and the penetration of the iPhone and more sophisticated applications in different markets, but we’ve got a broad range of content that is relevant on 2G, 3G and 4G. We have a broad range of content that is relevant irrespective of where the country is on its mobile life cycle evolution.
SLAM: What are some growth areas you’re focused on right now?
MB: We’ve got main business lines. We have our Media business, which is distributing our content across television, Internet and mobile. We’ve got our Events business, which is doing grassroots events up to what we call marquee events, which are preseason games internationally. The third line of business is our Sponsorship business. Our fourth line of business is our Merchandising business. Lastly, we have New Business lines, which would be our involvement in new international leagues or arena development or the roll-out of an NBA-branded destination. That’s our business model.
Different regions are in different stages of development. We see three broad phases of growth for a given market. The first phase is establishing a local presence by doing a TV deal or doing grassroots events. For example, that’s where we are in [South] Africa, where we just announced we’re going to open an office in Johannesburg.
The next phase would be coming up with a localized content platform and a localized offering. That would be establishing a local-language website, building a base of local sponsors or perhaps opening a retail store locally. In China, we have a local-language website, we have eight stores and a number of local sponsors.
The third phase is launching those new business lines, such as getting involved in the development of arenas. We’ve got a joint venture with AEG to help participate in the development of the arena market in China. We also developed reality shows in China, rolling out an NBA-branded destination in the market. So those are new business lines that can drive our growth once we’ve achieved steps one and two, if you will.
So when you say where the growth is going to come from, that depends on the market. In China, we’ve got tremendous opportunities to grow the business in digital and in some of these new business lines.
In the Middle East and India, we will grow by first establishing that core presence. It depends on the market.