The National Basketball Association has formed its Africa business operation, luring investors and former players, including Dikembe Mutombo, Grant Hill and Junior Bridgeman.
NBA Africa will oversee the league’s business throughout the continent, including operating Basketball Africa League, which launched on May 16. The entity will establish corporate partnerships, expand content and media rights and provide support for local governments seeking to build new basketball arenas. The NBA envisions basketball being a top sport throughout Africa in 10 years.
Specific terms of the investment in NBA Africa were not made available, but NBA Commissioner Adam Silver said in a press conference Monday that the enterprise value for NBA Africa is nearly $1 billion.
Nigeria-based industrial group Yinka Folawiyo Group and Helios Fairfax Partners Corporation, an investment holding company that trades on the Toronto Stock Exchange under the ticker symbol “HFPC,” are investors in NBA Africa. Former NBA players Luol Deng and Joakim Noah are also investors.
Silver and NBA Chief Operating Officer Mark Tatum will have NBA Africa board seats, joining Babatunde Folawiyo, CEO of Yinka Folawiyo, and Tope Lawani, co-CEO of Helios Fairfax. NBA Africa will be led by CEO Victor Williams.
On the call with reporters, Williams said part of NBA Africa’s strategy is to accelerate the “development of basketball’s eco-system” by creating more youth academies that will serve as a pathway for talent and growing the NBA’s brand.
“This growth will come to life by, amongst other things, increasing the NBA’s footprint in Africa and opening additional offices in priority markets across the continent starting in countries like Nigeria, where there is already a strong affinity for the game,” said Williams.
The NBA’s business operation in Africa is similar to its NBA China, which has grown to an over $5 billion business. NBA China launched in 2008, with a $253 million investment from partners including Disney. NBA China allowed the league to gain more access to the world’s top marketplace, as China has a population of about 1.4 billion, according to United Nations data.
“There are some structural similarities in that we’ve taken a geographical area and carved it into a distinct entity and added strategic partners because we recognize that was the best opportunity for growth,” Silver said when asked about NBA Africa’s comparison to its China business. “But I think the comparison probably ends there.”
Another significant difference is the NBA is now operating a league in Africa, whereas the Chinese Basketball Association is state-run. But the NBA’s business relationship with China remains strained after a 2019 tweet by then Houston Rockets General Manager Daryl Morey supporting pro-democracy protestors in Hong Kong.
CCTV, the state-run broadcast network, has yet to air games for the 2020-21 season after briefly returning NBA games to the air during the 2020 NBA Finals. Last year’s Finals featured the Los Angeles Lakers, a popular team in the country. NBA games are available for streaming due to Tencent’s $1.5 billion rights deal. And tensions between the U.S. and China aren’t making business in the country any easier to conduct.
Still, the NBA continues to eye more global markets, and Africa is one of the fastest-growing on the planet, with a sub-Saharan population of about 1.07 billion, according to the United Nations. The NBA opened its African headquarters in Johannesburg in 2010.
Again, a big part of this business will be growing the BAL. The league consists of two conferences and 12 teams, and the top six clubs will compete in a single-game elimination tournament following the season to determine the champion. Amadou Gallo Fall is president of the league.
Speaking to CNBC about the league, NBA team owner Robert Sarver said BAL can be used as a pipeline to grow basketball talent in hopes some players will end up playing in the NBA. And having teams play in selected areas will help with scouting, too. Currently, 55 players who are either from Africa or whose parents are native Africans play in the NBA.
“From a talent perspective, one of the things that’s been a challenge in Africa is the continent is very large, and it’s very spread out,” said Sarver, who owns the Phoenix Suns. “So unlike the United States, where the top young players, regardless of what state you live in, come together and compete against each other a lot, that’s hard to do in Africa.
“Getting them together to compete against each other really helps grow their game,” he added. “So I do think developing talent is one of the goals there but also just opening up a huge continent for more people to view the NBA.”
Source: Business - cnbc.com
