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For the past 2 years, a sizable portion of my time has been spent on financial, market and data reports and talking to relevant people regarding eurobball economy. I have reasons why but that's not the subject today.
I hold back everything I absorb. But I'll say some today.
I hold back everything I absorb. But I'll say some today.
Today should be a seismic shift for European basketball like 1996 Euroleague Final was. And it is such a seismic shift, but if it is left unrealised, then death of high level european basketball as we know it, will be realised imminently. More explicitly, precisely in 2024.
IMG and Euroleague Basketball signed an initial 10 year joint venture agreement in 2015. That has an extension option for another 10 years (otherwise it's not logical for IMG to take this risk) and as Mr. Bertomeu has expressed it himself, that extension will be exercised.
IMG's investment was announced to be €630m for the initial 10 years and revenue split would be 54/46 in favour of Euroleague Basketball if revenues surpass that amount over the decade.
So on average, IMG's investment into EL is annually €63m.
So on average, IMG's investment into EL is annually €63m.
IMG isn't merely getting a revenue sharing agreement in conjunction with agreed revenue targets in this joint venture. They also undertake the marketing, commercial and media rights operations of EuroLeague and EuroCup in every corner of the globe. That's what sports agencies do.
Now, IMG isn't supposed to pay €63m in cash on average every single year. That €630m investment is most likely including non-monetary investments. IMG's parent company Endeavor bought Neulion, the provider for ELTV, and renewed the OTT service for instance.
IMG also is securing other partnerships for Euroleague Basketball on a business level and is conducting business related interviews and reports together with EB management.
They also realise centralisation's role in sports economy and pushed for new EL format realised in 2016.
They also realise centralisation's role in sports economy and pushed for new EL format realised in 2016.
One of such reports immediately exposed EL's financial regression in 16 years when virtually every other sporting product had been vastly increasing revenues in that time span.
EB got a 35m USD commitment from Telefonica in 2000. EL revenue was €28m for the 2015-16 season.
EB got a 35m USD commitment from Telefonica in 2000. EL revenue was €28m for the 2015-16 season.
Such ludicrous financial regression over such a long time alone should be enough for clubs to keep Jordi Bertomeu and Andrea Bassani away from the sport forever.
It's 2020 now. They held their exact seats in EB management for two decades.
It's 2020 now. They held their exact seats in EB management for two decades.
With IMG's supposed €63m annual investment, EL revenue should have skyrocketed immediately. And it did to a degree, doubling as soon as new format was applied. But that's also explained by improved TV deals because of a more centralised, certain EL in various financial reports.
EL revenue for the past 2018-19 season is €62m-€64m depending on whether you apply whether what financial reporting says or what Mr. Bertomeu says.
Year 4 into the IMG joint venture and entire EL revenue is about their annual average reported investment.
Year 4 into the IMG joint venture and entire EL revenue is about their annual average reported investment.
It should be noted that EuroLeague TV payments from France, Spain, Greece, Israel, Turkey, Italy, Germany amount to €31,8m based on existing TV contracts for that season of 2018-19.
This begs the question, was IMG's supposed €63m annual average investment bloated for PR?
This begs the question, was IMG's supposed €63m annual average investment bloated for PR?
Because that was year 4 into the joint venture and however "non-capital injection" category of IMG investments you calculate, the math doesn't add up. Unless IMG and EB were boasting a €630m investment calculating the TV rights negotiated by IMG themselves.
Because of dire financial management of Euroleague Basketball, it doesn't come with any surprise to me that IMG took this risk without actually investing a lot of capital. The problem is, that doesn't help the clubs much. Of course TV rights would go up with a centralised league.
And by the way Euroleague Basketball is practically "stuck" with this joint venture until the 2035-36 season.
What does dire financial management by Mr. Bertomeu and Mr. Bassani look like? Let's have a look at Serbia for an example as a core market.
What does dire financial management by Mr. Bertomeu and Mr. Bassani look like? Let's have a look at Serbia for an example as a core market.
In November 2019, Crvena Zvezda president gave an interview to the club website saying they get €200k from TV for EuroLeague: https://sportando.basketball/en/crvena-zvezda-president-covic-no-meaning-in-playing-aba-league-if-not-connected-to-euroleague/
Typically by market standards it should be expected that the whole deal is a grand total of €300-350k then.
Typically by market standards it should be expected that the whole deal is a grand total of €300-350k then.
What does that mean? It means Crvena Zvezda or any other Serbian and likely any other ABA Liga club, would earn from a *single* EuroLeague matchday income at their arena, more than they earn whole year from TV income.
That is beyond unprecedented in sports rights industry.
That is beyond unprecedented in sports rights industry.
You just cannot earn equivalent of your annual TV money from a single match at home court in your arena with matchday income. Any sport, at any level, amateur or pro, that would be unthinkable.
Is it because Serbian TV industry is that messy?
Is it because Serbian TV industry is that messy?
Well, no. Serbian TV contracts for UCL in 2018-2021 cycle was a combined €7m. 2021-2024 cycle is already finalised and Telekom Srbija will pay more than twice of that €7m.
UCL is UCL but Serbia is arguably the eurobball market that basketball popularity is closest to football.
UCL is UCL but Serbia is arguably the eurobball market that basketball popularity is closest to football.
If we go through every single commercial contract Euroleague Basketball has signed, %90 would be severely underutilised like this. I won't go through all.
But marketing efforts are also this disastrously scandalous. I'll exemplify the Chinese market there.
But marketing efforts are also this disastrously scandalous. I'll exemplify the Chinese market there.
In 2016 with some effort into Chinese market, EB published a press release saying Chinese TV audience increased %25 as programming tripled. And 2016 SF of Fenerbahçe vs Baskonia was the most watched averaging 3,16 million viewers on CCTV5: https://www.euroleaguebasketball.net/euroleague-basketball/news/i/6yybputchtijsop8/euroleague-s-television-audience-in-china-jumps-by-25
Perhaps that's a small figure for China. But it is a significant figure for European basketball. The major hurdle for EL in China is that EL matches are mostly played past midnight by Chinese time. And I believe that SF was relatively early but still started around midnight.
But pay attention to wording on above press release. Some effort went into Chinese market because Beijing based media company HBN wanted to explore EuroLeague as a market, not the other way around.
I guess the ultimate proof of this is what happened to EB's Weibo account.
I guess the ultimate proof of this is what happened to EB's Weibo account.
Couple years ago an inactive Euroleague Basketball account on Chinese based social media platform Weibo had around 440k followers. Key word is inactive. The account was not updated, never posted much content anyway. That account has been deleted for a while now.
If you don't market your product, it won't be recognised. All EL, eurobball and any sports viewers start to consume their favourite sporting products because it's available on some sort of media that's exposed to them at some age. That is how popularity of sports are determined.
What happens in Chinese market is euroleague not trying to gain traction but Chinese businesses being curious and wishing to explore EL. However EL as an idiosyncratic product is not marketed, told, processed there. So it never gains consistent traction.
But as @liwenhe1 tweeted out, Chinese state broadcaster CCTV5 started to cover EL in news again in 2019-20 season. That is another attempt *by them* to explore EL.
To sum up, EL is being utterly lazy about a lucrative market when that market is intrigued despite no effort.
To sum up, EL is being utterly lazy about a lucrative market when that market is intrigued despite no effort.
That's another unseen situation in sports economy that you cannot possibly see something similar in another part of the industry.
I have disdain for FIBA era and Borislav Stankovic and hence clubs taking control is something I view favourably.
I have disdain for FIBA era and Borislav Stankovic and hence clubs taking control is something I view favourably.
But to the degree that clubs have continued to stick with this management for two decades, preventing their own growth, is appalling to me.
EL management being cruficied out of jingoism, inferiority complex and glory hunting instead of disastrous finances is appalling to me.
EL management being cruficied out of jingoism, inferiority complex and glory hunting instead of disastrous finances is appalling to me.
I get that nobody likes commercialisation. I get that eurobball isn't a players' medium, it belongs to coaches.
But 2015 NBA cap spike exposed players still matter a ton and there will be a certain point eurobball's unique ethos will be erased with a certain player quality lost.
But 2015 NBA cap spike exposed players still matter a ton and there will be a certain point eurobball's unique ethos will be erased with a certain player quality lost.
They have to compete with the NBA because US is a market where NBA ad revenue is 1,2 billion USD but Disney & AT&T don't pay say, 1 billion, for that ad revenue, they pay 2,7 billion. Because US is that kind of a consumer market for pay-TV industry where they can overpay.
And NBA's recent ratings drops aren't suited for such a cap increase again in 2025 but still, you never know because theoretically all big US markets could have competitive teams by then and if so eurobball would be toast under NBA's utter hegemony in such conditions.
