A $3 billion Opportunity

That is the number that the Raine Group the investment partner working with the NBA believes the basketball market in Europe and the Middle East can be worth in annual revenue.

But is that number really achievable and if so why is the current incumbent at the top of the basketball tree: Euroleague not generating anywhere near that figure.

In the words of NBA Commissioner, Adam Silver at the NBA Global Games in Paris in January: “We are looking very closely to see if there’s an opportunity to professionalize the game to another level here (in Europe), to create a larger commercial opportunity.” NBA still talking about expanding its footprint in Europe, Adam Silver says | NBA.com

“Professionalize the game to another level” – ouch – that is quite a damning verdict on Euroleague and their CEO Paulius Motiejūnas was not impressed, saying that he didn’t like the NBA’s mentality of: “Oh, we’ll come in and teach everyone how it’s done.” “It makes no sense”—EuroLeague responds to NBA-Europe plans | Dailysports

But is Euroleague underperforming commercially and what can the NBA bring to the table to address this with their new league if that is the case.

Euroleague signed a 10 year partnership deal with sports media agency IMG in 2015. Under the terms IMG agreed to pay a minimum of $391 million over the decade up to 2026, in return for a 45 per cent stake in Euroleague’s commercial arm. EuroLeague v NBA: What comes next in the battle for European basketball supremacy – SportsPro

In January, the partnership was extended for another 11 years through to 2036 but the new deal was less restrictive than the original, allowing clubs with the ability to opt-out – so opening a window for NBA Europe to approach Euroleague teams. What EuroLeague and IMG’s new deal means for the NBA and future of basketball in Europe – The Athletic

So how has the Euroleague performed commercially since the IMG partnership. According to reports the clubs shared revenues from broadcast rights and prize money of €42.5 million in 2023 EuroLeague TV rights money: 5 teams contribute 62%, some give nothing – Basketnews.com with the biggest contributions coming from Spanish, Greek & Israeli television deals.

Those revenues, once divided across the eighteen Euroleague clubs though, fall far short of player budgets and the view is that most clubs are losing money: The questions for the future of the EuroLeague remain no matter the CEO – Eurohoops

But there have been signs that Euroleague is starting to see an upturn in commercial growth, with new Chief Commercial Officer Gawain Davies signing contracts with major partners such as Visa & Motorola replacing “regional deals with single-market brands in the south east of Europe”. Has Euroleague Basketball timed its sponsorship push to perfection? | SportBusiness

The Euroleague Final Four is also heading to Abu Dhabi in 2025 netting the competition a significant fee of €50 million. Abu Dhabi pays €50M for the 2025 Final Four and the IMG joint-venture set to be extended – Eurohoops

For the NBA though these deals are small fry when compared with their latest US media rights deal with ESPN, ABC, NBCU & Amazon Prime coming in at £76 billion over 11 years. NBA New Media Rights Agreements Reflect The Growth Of Streaming.

Whilst sponsorship revenue across the league, teams and arenas came in at $1.66 billion for the 2022/23 season. NBA Sponsorship Revenue Hits Record $1.66 Billion

Will the NBA Europe be as marketable, with what is likely to be a lesser product in terms of playing talent on the court (compared to the actual NBA), in a continent where “soccer” dominates?

The NBA brand will surely help the new league to open doors that are closed for Euroleague and if a sprinkling of older superstars can be persuaded to finish their careers in Europe, then what FIBA Secretary General Andreas Zagklis describes as the “untapped potential in European club basketball” could be realised. NBA, FIBA move forward on exploration of new professional men’s basketball league in Europe | NBA.com

Or is it case that as Motiejunas says that NBA Europe could undermine business growth for all of European basketball. “This big noise about it [NBA Europe] is not helping,” and it is “disturbing the product we have”. EuroLeague CEO on NBA Europe: “We don’t need another league, we don’t need a savior” – Eurohoops