CNN Sports/SI report: NBA Again Eyeing Euro Expansion

According to Ian Thomsen of Sports Illustrated, the NBA is again considering some sort of expansion for Europe. Thomsen, who recently toured Italy and Russia (Moscow) wrote the story on Wednesday and noted that it would be the topic of discussion when NBA Commissioner David Stern meets the press this weekend in New Orleans.

Thomsen cited league sources in his story, but did not elaborate on if the source was from within the league office or from the teams or European basketball side. (I have not spoken with Thomsen or anyone at the NBA about this story and will follow it as a fan, rather than as 'an insider.')

I look forward to watching it play out.

Here is his story:

NBA mulling idea of five-team expansion in Europe
Posted: Wednesday February 13, 2008 10:07AM; Updated: Wednesday February 13, 2008 11:18AM

The NBA's on-and-off approach to expansion into Europe is back on again. Commissioner David Stern is considering new plans to create five full-fledged NBA franchises in Europe over the next decade, a league source told SI.com.

The initiative promises to be the big news of All-Star weekend in New Orleans, where international basketball officials are arriving this week for their annual meetings with the NBA. Stern is expected to reveal the league's new stance at a news conference Saturday, according to a league source.

The current idea would be to create five new teams in major markets to form a "European'' division within the NBA. The teams would play the full 82-game schedule and compete for the NBA championship. But the proposal is new and many factors will influence the eventual outcome, the league source said.

This will not be the first time Stern has proposed expansion overseas. In 2003, he said the league would investigate planting teams in Europe within a decade, but then shelved the proposal as the NBA focused on developing profitable relationships with China and other emerging markets.

Those relationships have helped Stern formulate a new two-pronged approach to growing the business of the NBA and world basketball in general.

Stern's preference has been to develop international partnerships with local federations and business interests, as in the formal announcement last month of NBA China. ESPN and four Chinese investors have already pledged $253 million to the nascent project.

According to the league source, Stern has realized that it's much easier to do business in emerging basketball markets than in Western Europe, where government regulation as well as the basketball organizing bodies -- the complex network of old-world federations that run the sport in each country and throughout Europe -- have choked off attempts to turn European basketball into a profitable enterprise since the opening of the Berlin Wall almost 20 years ago.

"Say you put five teams there in NBA buildings and see what happens,'' the NBA source said of plans to expand to Europe. "Because then it's out of the hands of the governments; it's an American company with American divisions operating in Europe.''

Pro basketball remains a minor sport throughout Western Europe, with a low-scale popularity not unlike that of soccer in the United States. In an interview with Sports Illustrated two years ago, former NBA player Sarunas Marciulionis, a Lithuanian who founded the Northern European Basketball League, outlined the problems in Europe while calling on Stern to preside over a summit to overhaul basketball on the continent.

"There are no big brands -- none -- connected with high-scale basketball in Europe because it's a mess,'' Marciulionis said while attending the 2006 All-Star Game in Houston. "We need one structure, one clean pyramid. I think David could unite Europe. I think they would listen to him.''

Nothing came of Marciulionis's proposal: The Europeans declined to ask for Stern's leadership, and at that time Stern told SI that he was neither interested in expanding the NBA to Europe, nor was he willing "to intrude'' in the affairs of the European leagues.

But the landscape has changed with the emergence of NBA-styled arenas in Europe. The 02 Arena in London and the soon-to-be-opened 02 Arena in Berlin (both named after a mobile phone sponsor in Europe) are NBA-ready venues outfitted with the necessary suites and amenities. In addition, Rome has broken ground on a new arena, and Real Madrid is expected to begin construction soon on a new building in Spain. Those four cities would be among the leading candidates to receive NBA franchises in the next decade, if Stern pursues his vision. But the expansion is predicated on more arenas being built in Europe in coming years.

Stern has long said that the absence of NBA-sized buildings had been the biggest obstacle to putting franchises in Europe. Now that a marketplace is developing for large arenas capable of providing revenue streams to support NBA franchises, the league can seriously begin to consider expansion overseas.

There is a sense that the clock is ticking down on the league's long-term plan to grow basketball in Western Europe. With NBA-ready buildings sprouting up, the source suggested that Stern feels the need to move before a competing entity seizes the opportunity of moving into those arenas and starting up a new European league from scratch.

Of course, there would be many issues. Would European audiences buy expensive season tickets to 41 home games per year? Would they adapt to the American dynamic of sport as entertainment, equivalent to attending a concert or the cinema? Could the NBA sustain expansion to as many as 35 teams? Would American players be willing to play overseas? And how would teams adapt to the transatlantic road trips?

European basketball officials have been skeptical that the NBA could succeed in the Old World. But others view the success of European soccer's Champions League -- in which huge numbers of fans have watched the best players in the world without necessarily having a rooting interest in the teams -- as an indication that the NBA model could succeed in Europe.

There is little room for the NBA to expand its business domestically. If Stern decides to move overseas, he will do so based on the availability of new venues and the perspective that there are no better options for growing the game in Europe.

"We need to do more market research, of course,'' the league source said. "But in the end there's only one way to find out, and that's by going there and doing it.''

***

A view from across the pond- written Feb. 8, 2008:

Big interview: David Stern
Mr Basketball eager to conquer the lost frontier of Britain


Donald McRae in New York
Thursday February 7, 2008
The Guardian

Twenty-four years ago this week David Stern, a tough but urbane lawyer who grew up working in his father's New York deli, became the commissioner of a near-bankrupt sports organisation. Today, while noting that anniversary in his swanky office on Fifth Avenue with a crumpled frown at the passing of time, the 65-year-old Stern stands supreme at the head of the National Basketball Association as, arguably, the world's smartest sports administrator.
"Am I really that old?" Stern murmurs dryly as he surveys the rise of a sport that struggled, even in America, before he marketed some extraordinary basketball players so shrewdly that he led the global expansion which provides a blueprint for the Premier League. Stern was also lucky that 1984, the year he became commissioner, marked Michael Jordan's debut season. On the back of Jordan's genius he engineered a 500% increase in profits.

As the NBA has just moved its European office from Paris to London, in order to take another crack at an unimpressed British public, Stern can afford to be laconic about a rare failure. "I actually opened an office in London in the early 1990s. I got free space from Hard Rock and we had a basement office. But when the free rent ran out we moved on. We once had a game on BBC2. A really nice guy was head of sport and he probably lost his job by putting on an NBA game instead of an English football match."

The contrast between interviewing Stern and Richard Scudamore, his counterpart at the Premier League, is underlined by the way in which the NBA's head honcho appears to relish the stumbling moments in his otherwise inexorable free-marketeering. Soon after Stern became commissioner, "CBS could only sell internationally what it televised domestically. And one year they cut us down from 18 to four regular season games. So there was a knock on the door from these Italian television guys who said they'd like to buy some games from us. I said, 'Oh, that's nice. Sure, you can buy some games.' They said, 'How much?' I asked, 'Well, how much does CBS charge?' and he said $5,000 a game. I said, 'That's our rate as well.' And that started it all.

"We would go to these trade fairs in Europe and have no idea what we were doing. But, gradually, from that little acorn grew an oak of distribution that now takes our games to 200-plus countries in 43 languages. We're the largest distributor of reality programming in the world - we produce 1,200 episodes a year."

Stern is sharply aware of the Premier League's own soap opera and its irresistible international success. When, in polite deference to our American setting, I ask him what he thinks of English "soccer", he even pats my arm. "You can call it football. We worldly people understand."

He pauses when asked if the NBA considers the Premier League as a rival. "I don't think so. There is competition between the two in terms of sponsorship but they also demonstrate that sport is a unique property for sponsors, television, digital outlets and the fans."

They might share an insatiable appetite for profit but, unlike Scudamore, Stern talks of the need for his superstars to adhere to "a code of social responsibility". Apart from the good deeds he reels off when describing the NBA's work off-court, Stern points out that "we're far past this but three years ago we pledged to donate $100m [for global charities] and construct at least 100 places where kids can read. And we're donating a million hours of public service from our players over five years. But it's actually selfish of us to do it - because it's great for our players."

English football could learn additional lessons from the NBA. Eight out of 20 Premier League clubs are currently owned by foreign billionaires of varying repute. Their nationality is less important than the fact that most new owners see football primarily as an opportunity for personal profit. "They do not have any concern about the local community," Stern says with a grim smile. "Welcome to our world!"

Stern has turned away billionaires who have sought to buy into the NBA. "The question is not whether they are foreign but what person are they likely to be as an owner? We make them jump through certain hoops that might discourage them."

It is hard to imagine Stern allowing Thaksin Shinawatra or even Roman Abramovich to seize control of an NBA team. "I know Messrs Glazer and Hicks and Gillett and Lerner and Kroenke," he says of the high-profile Americans who have moved into English football. "I've not met Mr Abramovich but I think it's going to shake itself out in England. And that's not a play on words because I mean 'shake' rather than 'sheikh'."

That reference to the dented bid from Dubai to buy Liverpool leads to Stern's admission that, for George Gillett and Tom Hicks, "it's a financial transaction. I happen to know [Aston Villa's owner] Randy Lerner and he's a terrific human being who would only operate a club as a community asset. But I also think Hicks and Gillett are very smart. They're not going to do anything to harm the asset."

Most Liverpool supporters bitterly dispute that claim. Even more than Gillett's and Hicks' treatment of Rafa Benítez, and their attempted transformation of a proud football club into a business "asset" for their own gain, the debt with which they have saddled Liverpool bodes ill for the future. "I understand. But you need to step back. It's either that or the clubs can operate themselves into oblivion because they won't be able to carry the load and finance the new stadium."

That same dubious principle, of landing a club with a massive debt which works as a loan for American businessmen to buy up any Premier League team they fancy, was laid out during the Glazer family's takeover of Manchester United. The Glazers dumped a debt in excess of £500m on to United. Gillett and Hicks have just finalised a £350m loan to strengthen their hold on the club - and a large chunk of that sum is now Liverpool's responsibility.

Stern would not allow such a situation in his own organisation. "Well, we have certain rules in the NBA. We have a limit to the amount of debt that can be placed on a club at purchase. Right now that's $150m [£75m]. Our franchises don't have the valuations of the highest Premier clubs but I think the core issue in the UK is the gulf between the haves and the have-nots."

Stern stonewalls a query as to whether the Glazers are well regarded in America. "I don't really know. I don't follow them." He is more supportive of Kroenke - who holds a 9.9% stake in Arsenal - and suggests that the club's English shareholders should not dismiss him. "He's a good guy. He's a friend and an NBA owner who has operated the Denver Nuggets and made investments and made it part of the community. He's improved the arena, brought soccer to the community and he's involved in other sports projects."

With regard to English football, however, "the motivating factor for Lerner and Kroenke and all these guys is that this is an investment opportunity that seems smart. But the smartest way is to know you can do well and do good at the same time." Stern's focus remains clear. "Every business should be saying China, in terms of sheer growth and bulk, is our No1 aim. India is No2. But Europe is a great market - especially with the Olympics coming to London. Basketball has moved up as an Olympic sport and it's going to be the No1 ticket in Beijing. It'll also be a very important ticket in 2012 with Luol Deng and maybe Ben Gordon [both of the Chicago Bulls] playing for GB."

Deng, the 22-year-old former Sudanese refugee whose family fled to London in the early 1990s, discovered basketball in Brixton. Despite now being an NBA star, Deng's fierce desire to play basketball for this country was finally realised last summer after he received his British passport. "No one person can transform the sport but Luol Deng is an extraordinary player and a unique individual with an understanding of his role. My guess is that there are far more young Brits bouncing the ball than even the government or the Olympic authority understand - and there are far more elite players travelling on British passports than anyone understands. I see 2012 as a real opportunity - as the beginning of something new for basketball."