Marketing financial strategies and concepts

Marketing, Financial

What is the NBA?

The National Basketball Association comprises thirty NBA franchises in the United States and Canada. The three oldest franchises are the Boston Celtics, New York Knicks, and the Golden State Warriors ("Category: NBA Teams," Hoopedia: NBA, 2009). Basketball was still struggling to establish its popularity in America when the skeleton of what became the NBA was founded in 1946. Then the organization was called the BAA (Basketball Association of America). The league, later renamed the National Basketball Association only gained real popularity after a point-fixing scandal caused fans to turn against an increasingly professionalized college basketball league in the 1960s. The scandal improved the NBA's reputation by comparison and allowed its league teams to make inroads into major cities as college teams retreated to campus venues (Koppett 2009). Even then, its popularity was not assured, as it had to compete with the 'hipper' American Basketball Association (ABA) and its major star 'Dr. J' as well as a reconfigured NCAA (National College Athletics Association).

Today, as well as a sports league, "the NBA is also an established leader in sports marketing, currently maintaining its longest list of fully integrated domestic and global marketing partnerships with the most recognizable brands in the world, including the leading Internet content and technology providers that bring the game even closer to fans around the world" ("NBA," Hoopedia: NBA, 2009). As part of its marketing efforts, NBA Entertainment, the league's official media division, has produced a 24-hour television cable sports news network called NBA TV, as well as maintained the organization's affiliated websites: NBA.com, WNBA.com and its 'Development League' site NBADLEAGUE.com. International fans can thus participate in the NBA community as well as cheer on their own national teams every four years in the Olympics when noted American basketball players compete for gold.

How to market the teams? How to market the players?

The NBA's popularity has waxed and waned since its creation. Many basketball fans' primary allegiance is to their schools, rather than their cities. However, some teams have garnered near-fanatical followings, such as the Boston Celtics, the New York Knicks, and the Lakers on the West Coast. But even today, 'March Madness' often eclipses the NBA, particularly when the NBA's most dominant teams are not faring very well. During the 1970s, the ABA (American Basketball Association) also posed a powerful and brief rivalry to the NBA because its teams exhibited a showier, athletic style of offensive play. The ABA also had a 'three point shot' incorporated into its rules, which the NBA would later adopt. The ability of superstars to draw fans with dramatic play often forms a cornerstone of fans' NBA's allegiance, sometimes even more so than the teams themselves. People who never would have cheered on the Chicago Bulls did so when Michael Jordan wore their colors.

A new kinesthetic style of playing, more dramatic 'buzzer' closing shots at the end of the game, and dramatic rivalries between players such as Larry Bird and Erwin 'Magic' Johnson increased the popularity of the NBA during the 1970s. One common criticism of the present-day NBA is that it has not done enough to market its top talent, in stark contrast to the era when Michael Jordan reigned supreme. There is a great deal of 'buzz' as to what will occur when rising superstar LeBron James becomes a free agent. Fans of the ailing Knicks franchise hope that LeBron will be attracted to the marketing possibilities offered by New York City. However, many think that LeBron will remain near his home state and continue to play for the Cleveland Cavaliers rather than seek a better team or seek to become the dominant player on a famous team. This would be not simply a disappointment to many Knicks fans but also for many fans of the game in general, given that a driving East vs. West Coast rivalry can increase fan interest (Abrams 2009). The Lakers have fared better amongst the once-great teams, although there will always be a tension between marketing 'players' and marketing 'teams' in the NBA given the large egos the team has boasted over the years.

To expand its brand's outreach, the NBA launched "the Development League (or D-League), the minor league of the NBA. The D-League serves as both a brand extension for the NBA and an R&D department -- developing the next generation of talent for the NBA while also serving as a testing ground for new concepts. For example, the D-League has allowed top teams to choose their first-round opponents in the playoffs, tested different balls, hosted a HORSE tournament at its All-Star Weekend, and mandated that one spot on each team be saved for a selected player from local tryouts, to increase fan affiliation" (Poe 2009). This latter policy is a way to generate team loyalty and loyalty to a player at the same time. It also capitalizes upon some of the youthful excitement of college 'hoops' in the context of the NBA.

A critical feature in motivating the development of the D-League was one aspect of LeBron's marketing that proved successful, namely the 'buzz' generated about his career at a young age. The aim of the D-League is to create such interest amongst young players as early in their career as possible. The League also allows for more 'fun' and idiosyncratic types of tournaments, to attract a younger audience. Variety is a vital aspect of keeping fans entertained in this era of 24-7 sports.

As with many sports organizations, the NBA has also been actively promoting its charity and community service efforts to improve its image: "This past year, the league launched its most ambitious community outreach endeavor, NBA Cares. Over a five-year span, players and teams will raise and contribute $100 million for charity, donate more than one million hours of volunteer service to communities worldwide, and build more than 100 educational and athletic facilities where children can learn and play" ("NBA," Hoopedia: NBA, 2009). Since many famous members of the NBA have come from less-than-privileged circumstances, community service is a vital element of bolstering its reputation as an organization that gives back to others. Service also creates a connection between both individual players and the community.

Globalization

The NBA has been expanding its outreach into Europe. "Since the NBA first played in Europe in 1993 -- at Wembley Arena -- London has hosted four games and seven teams" (Greenberg 2009). The Chicago Bulls will play the Utah Jazz at London's O2 Arena in fall of 2009. "The NBA says basketball has grown in the U.K., and that club membership doubled over the last four years ahead of the 2012 Olympics. The NBA will also support the London Youth Games, which tips off in May" (Greenberg 2009). The televising of NBA games in the UK and France, combined with the spread of its appeal worldwide, from China and beyond has also been solidified through international recruitment. China's nurturing of top talent became evident upon the drafting of Wang Zhizhi by the Dallas Mavericks. Today, this season, 75 international players from 32 countries will be on NBA rosters. Fans can watch games televised live on the Internet, and live events such as the Olympics, London Youth Games, Basketball without Borders in China, India and South Africa, as well as the increasingly international composition of the NBA's fan base all work (NBA Global Official Website, 2009). Because of its relative lack of expense and accessibility, basketball is becoming one of the most popular recreational sports worldwide, and interest in the NBA will grow exponentially, as more people enjoy playing the game.

Financial scarcity

Given the contracting pool of resources in the current market environment, the NBA is trying to target its efforts in terms of getting the biggest 'bang' for its marketing 'buck.' In one attempt to draw more of the youth market, which will form its fan base for many years to come, the NBA created an arrangement with Mars to develop team-branded M&M's (Greenberg 2009). This is one way to 'connect' with very young children, and encourage them to identify with their team by consuming something even a small child can buy with pocket money. Lest chocolate seem too unhealthy, however, the NBA has also partnered with milk on its mustache campaign to encourage teens to engage in a healthy lifestyle -- simultaneously improving its image and also establishing an emerging market for its 'brand' (Lukovitz 2009).

Further inroads into the hyperconnected teen market are manifest in NBA Digital which is launching a T-Mobile Close Up: NBA Eastern Conference Finals live streaming sports application available via the T-Mobile G1 with Google. It will provide fans with access to four different video channels on which they can watch 2009 NBA Eastern Conference Finals at different camera angles (Greenberg 2009). The NBA has always tried to keep abreast of teen trends, as it did during the 1980s and the 1990s during the Nike Air Jordan craze and connecting fans to new ways of watching games and following players through the Internet is a youth-friendly, future-forward, and relatively inexpensive method of marketing.