NBA – Creating a Closed Ecosystem

We’re just at the beginning of the conversation” Adam Silver said. “With FIBA, we already work together for the program ‘Basketball without borders’ and for the African league that we started, which will develop in the coming years“. According to Silver “European and world basketball is about to experience an unprecedented earthquake in the history of its competitions“.

As reported by the Spanish newspaper Marca in October of 2021), NBA and FIBA have already begun to negotiate the formation of NBA Europe, which could then likely become the foremost basketball league on the continent.

The negotiations are reportedly already in an advanced phase, and the project would appear to be off to a promising start. In practice, this does not imply that European basketball teams would face the Lakers, but it does mean that the NBA would expand and further establish its brand in Europe, whereas the European division would be the NBA’s fifth competition after the NBA, WNBA, G-League, and BAL (Basketball Africa League).

The concept of NBA Europe would be modelled after what the NBA has previously accomplished in Africa with the formation of the BAL (Basketball Africa League). As a result, the new-born entity would not involve present American franchises, but rather have its own life, with the participants being the most prominent teams from the old continent, competing in a new competition of which the brand and organisation would be controlled directly by the NBA.

According to various sources quoted by the Spanish newspaper, the new league would have the support of several top-tier companies, founders, and an indefinite number of license holders, who have been vocal about their dissatisfaction with the Euroleague, Europe’s current highest basketball competition, for several years. The objections would be economic rather than technical in nature: many stakeholders indeed believe that the high level of play and the presence of top players are not rewarded by adequate earnings for the for the teams, which are considered to be below the potential of Europe’s best basketball teams. This issue has only been exacerbated by the ongoing pandemic.

The main European continental basketball competition faces an unclear near future following discussions in Barcelona, when certain teams, including those leading the charge to NBA Europe, expressed their desire to bring their positions closer to the FIBA to settle a long-running conflict. The teams have utilized these talks in Barcelona to express their concern about the competition’s economic status following the pandemic-related problems. Another aspect that has generated a divide between the 13 teams who own the tournament is a decline in income and distribution

As a result, the President and CEO of Euroleague, has found himself in a difficult and increasingly precarious position. The NBA has shown to be an unrivalled model, but also rival, in terms of marketing, image control, and money generation over the years, in addition to hosting some of the best players on the planet. According to Marca, the parties’ talks are taking place under the surface to avoid the chaos that has erupted following the football European Super League’s announcement.

According to the Iberian newspaper, the most significant obstruction to the fulfilment of this proposal is the agreement struck in 2015 by Euroleague clubs with IMG (International Management Group) with a long-term validity and Euro 630 million in value. The mentioned pact, which contains a significant and onerous departure provision, grants the firm’s 60 percent of the television and marketing rights.

It isn’t the first time that the NBA has discussed the formation of a European division. During the 2003 All-Star Game, then-commissioner David Stern proposed the formation of a conference comprising European clubs which would compete against NBA teams. Eighteen years later, a revised project, which differs from the original, appears to have a better chance of succeeding, also in light of NBA Europe’s already fully-functioning headquarters in London.

When compared to the level of expenditure in NBA America, an NBA Europe operation would be inexpensive. In the 2019-2020 NBA season, the average NBA franchise paid their players more than USD 123 million in salary. For the current season, the average player spending for each franchise in the league will amount to USD 123,456,972. This figure is however only a fraction of the global revenue of the NBA.As the NBA generates more revenue than ever before, about $8 billion in 2019, the players are also earning more than ever before. On the other hand, even Europe’s top teams operate at a wholly different level of both revenue and expenditures. By way of example, in 2019, Barcelona , had a budget of Euro 41 million . The only two other teams in Europe that spent more than 40 million within one season in recent years are CSKA Moscow and Real Madrid, while Khimki Moscow Region, AX Armani Exchange Milan, and Fenerbahce Beko exceeded the 30-million-euro mark.

The Euroleague would suffer a significant setback if the NBA indeed created a European division. The seven clubs currently leading the exit from the Euroleague will have to persuade the remaining teams (among which Real Madrid, Barcelona, and Baskonia) to join the NBA Europe project, as well as begin negotiations with IMG, which has set a penalty of Euro 10 million for any team that terminates its contract early. This would not only leave the league with the less appealing clubs, but it would also exert a great financial strain on the league.



Riccardo Giacomin

Patrizia Diacci