EuroLeague plays catch-up in its marketing

May 23, 2005 | Sports Business Journal

At the EuroLeague Final Four in Moscow earlier this month, the presence of NBA head coaches such as Mike Dunleavy and Kevin Pritchard, along with dozens of scouts, player personnel directors and general managers, confirmed that interest in international basketball has never been higher — at least as far as the NBA’s talent evaluators are concerned.

From a business perspective, though, the EuroLeague, widely regarded as the top professional basketball league in Europe, has some catching up to do with its product on the court.

While Moscow’s Olympisky Arena featured its share of banners and rotational signs from companies such as Hewlett-Packard, And 1, Molten and Russian sponsors Rosbank and Norilsk Nickel, the league admittedly needs to package and sell more strategic, leaguewide sponsorships to ensure its long-term success and propel interest in the game.

“Our competition has more value than what we are getting,” EuroLeague CEO Jordi Bertomeu said before the tournament, ultimately won by Maccabi Tel Aviv. “The business aspect of the clubs and the league must improve.”

To do that, the league plans to take back ownership of its branding and television rights and will revamp its sponsorship, marketing and licensing strategy. Sogecable, Spain’s leading satellite television group and Europe’s third-largest, owns all commercial rights to the league until June 1 thanks to a five-year deal worth 20 million euros a year (roughly $25 million a year). League officials said Sogecable focused most of its activity on television distribution, which it outsourced to Media Pro, also a Spanish company. EuroLeague games are broadcast in more than 40 European countries and on NBA TV in the United States.

Sponsorship deals for the Final Four, for example, primarily included such basics as signs and hospitality, and were sold ad hoc leading up to the event, in some cases for less than six figures. In the future, the league will not allow sponsors to “cherry pick” the Final Four; instead, it wants partners committed to the growth and success of the league and hopes to package and sell long-term deals for more “official providers” who will invest as much as 1.5 million to 4 million euros a year at the top level ($1.9 million to $5 million a year, based on current exchange rates).

The league would not specify current sponsorship costs or total revenue, all of which goes to Sogecable.

“You are seeing the transition from the old way to the new,” said Marshall Glickman, an American sports marketing consultant and former president of the Portland Trail Blazers who has worked with the league since 2002. “Media Pro and Sogecable are not in the business of selling sponsorships, so there’s been no real selling effort for the past five years. Going forward, we can think about companies that are compatible with our objectives; we can think about companies that have a pan-European footprint, especially in emerging markets where we have teams and where we’re strong.”

The EuroLeague began play in 2000 and brings together 24 teams from 13 countries. Teams typically play one game in their home country leagues during the weekend and one game against other EuroLeague teams during the week. The season spans six months, beginning in November and culminating with the Final Four, which alternates host cities each year. (Next year’s Final Four is scheduled for 18,000-seat Sazka Arena in Prague, a modern venue with luxury suites and club seats.)

Average EuroLeague attendance this season was 5,839 a game, up 23 percent from last season’s average of 4,742 and an increase of 79 percent since its first season.

The EuroLeague plans to require Final Four sponsors to commit to the league’s success.

In recent years, NBA scouts have selected more and more players with EuroLeague experience in the draft, such as San Antonio’s Manu Ginobili, formerly of Virtus Bologna, and Memphis’ Pau Gasol, formerly of FC Barcelona.

While the league’s outstanding players and “pan-European footprint,” as Glickman calls it, stand out as strengths, the cultural and economic disparities between clubs remain significant challenges.

“You can’t talk about an average ticket price in the EuroLeague because in Serbia, 5 euros is a lot of money, but in Leone, 20 euros is not,” Bertomeu said.

Champion, the U.S. apparel company, outfits three EuroLeague teams and is in talks to become a leaguewide provider of uniforms and licensed apparel. Champion only provides product to the teams, and there is no leaguewide apparel partner. League officials would not reveal a figure they’re shooting for out of the category but did say it was “in the top tier” of their sponsorship realm.

“We think we can develop commercially viable merchandising for the EuroLeague teams, which is something that is nonexistent right now,” said Joseph Monahan, general manager of licensed apparel for Champion Products Europe, which manufactures and markets product across 35 countries in Europe, Africa and the Middle East. “From a positioning point of view, basketball is not only representative of our American roots, but it’s also something that’s commercially viable in Europe.”

The league believes it should be able to attract major corporate sponsors interested in its youthful demographic and presence in major European cities as well as emerging markets in Eastern Europe, including Poland, the Czech Republic, Croatia, Serbia-Montenegro and Turkey.

“These countries are now being targeted by big, multinational corporations, and we can help them get there,” said EuroLeague sales director Pedro Galvan Peris.

Molten, the Japanese company that provides the official ball of the EuroLeague, has signed through 2008.

“Basketball in Europe looks to grow more and more in general because of good results in the Olympics and world championships,” said Kiyoaki Nishihara, general manager of international sales and marketing for Molten. “We’d like to pursue joint promotional activities to market products in countries where the EuroLeague has the biggest influence, such as Spain, Russia or Italy. We think basketball is booming.”

So much so that NBA Commissioner David Stern recently announced preliminary plans for four NBA teams to hold preseason training camp in Europe prior to the 2006-07 season, noting that sponsorship and logistical issues still need to be worked out. The next step, some believe, would be placing a team or teams in European cities, perhaps in the next decade.

If that happens, Bertomeu wants to make certain that the EuroLeague is on solid financial and organizational ground.

“Today, everything is global,” he said. “If the NBA wants to come, they have to know that the EuroLeague has a culture of strong clubs. With or without the NBA, the EuroLeague has to grow.”

Greg Abel is a writer in Maryland.