June 7, 2013 | Bloomberg
NBA Bets on Billionaire Bounce in Russia With Prokhorov Push
The National Basketball Association is betting billionaire Brooklyn Nets owner Mikhail Prokhorov can give it an advantage as the league seeks to replicate in Russia its success in China.
The NBA hired David Watts, a former executive at sports and entertainment agency IMG Worldwide Inc., as London-based vice president for Russia and former Soviet states, NBA International President Heidi Ueberroth said. The position had been vacant since Egor Borisov, who was hired to run the Moscow office opened by the NBA in 2010, left more than a year ago.
“We would actually love to see some regular-season games played in Russia, as we have currently in London,” Prokhorov said by e-mail May 25. “That would be my dream.” The native Muscovite has pledged to spread the team’s fan base globally.
Commissioner David Stern in October identified overseas operations and digital content as the investment priorities for the league. China has become the NBA’s biggest foreign market, with $150 million a year in revenue and annual growth of 10 percent as far into the future as “we can see,” Stern said at the time. “NBA” is among the 10 most-searched terms on Baidu Inc (BAIDUZ).’s search engine, helping push page views on NBA.com’s Chinese site to 4.5 billion last year, according to the league.
“There’s enthusiasm for big global events, from the FIFA World Cup to the Sochi Olympics,” Ueberroth said by phone from New York on May 31. “Russia is a top priority market for us,” she said. Watts declined to comment via mobile phone.
The Nets were eliminated from the NBA playoffs in the first round by the Chicago Bulls on May 4, saying the following day that P.J. Carlesimo wouldn’t return as coach next season.
The Miami Heat, led by LeBron James, beat the Indiana Pacers 99-76 yesterday in a decisive Game 7 to win the NBA’s Eastern Conference title for a third-straight year and advance to the NBA Finals, where they will face the San Antonio Spurs.
The NBA has held exhibition and regular-season games in Europe and Asia as part of its global marketing campaign. Prokhorov brought the Nets to Moscow in 2010 to introduce himself to his new team on the court of his former club CSKA Moscow, which won the Euroleague championship in 2008. The Los Angeles Clippers are the most recent NBA team to play in Moscow, in an exhibition tournament in 2006.
Russia’s premier basketball association is the VTB United League, which has 20 teams throughout eastern Europe. Nine of them are based in Russia and two, CSKA and BC Khimki, also played in the Europe-wide Euroleague last season.
The NBA needs to start its push with a national television contract to increase its relevance in the Russian market, where basketball’s popularity ranks behind soccer, ice hockey and biathlon, said Natalia Furaeva, a vice president at CSKA Moscow. NBA games are only broadcast in Russia via satellite.
“Any cooperation is more successful when it is a two-way street,” Furaeva said. “Exhibition games are definitely interesting for Russian teams and fans.”
President Vladimir Putin has promoted sports throughout his 13 years in power. Russia will spend a record $50 billion to hold the 2014 Winter Olympics and has been awarded the 2018 soccer World Cup, which will cost about $20 billion, according to government estimates. The Soviet Union men’s team won medals in basketball in eight straight Olympics from 1952 to 1980, including a controversial gold over the U.S. in 1972.
“Several top members of the government who love basketball” are willing to help promote the game in Russia, said Prokhorov, the country’s seventh-richest man, with a $13.2 billion fortune, according to the Bloomberg Billionaire’s Index. Prokhorov lost to Putin in last year’s presidential vote.
Prokhorov said last June after his defeat that he wants to run for mayor of Moscow. The city’s first direct ballot in a decade may be held in 2013 after Moscow Mayor Sergei Sobyanin today announced he will step down two years before his term ends to run in early elections.
Prokhorov would garner 9 percent of the vote if elections were held this spring, according to an April poll of 3,600 Muscovites surveyed by the Public Opinion Foundation.
Prokhorov bought 80 percent of the Nets and a 45 percent stake in the Barclays Center in Brooklyn from developer Bruce Ratner for $200 million in 2010. The team relocated there from New Jersey this season.
Russia has the highest per capita income and smallest population of the BRIC group of emerging economies, which includes Brazil, India and China.
“Basketball in Russia needs to develop from the grass roots because a few very wealthy people are not enough to create a market,” Marshall Glickman, a former president of the Portland Trail Blazers who advises Euroleague teams including CSKA at the G2 Strategic LLC consulting group, said by phone from his office in Bend, Oregon. “The NBA needs a presence, to show up and play games, and to get the product in the streets and the merchandise on the shelves.”
The NBA hopes the three Russian-born players currently in the league will help boost basketball’s popularity in their home country, Ueberroth said. Former Houston Rockets star Yao Ming helped drive the sport’s success in China, fueling viewership and apparel sales.
Former All-Star Andrei Kirilenko and Alexey Shved are both Minnesota Timberwolves, while Timofey Mozgov plays for the Denver Nuggets.
The Clippers had to play in a decrepit Soviet-era arena in Moscow in 2006 because of a lack of modern facilities. State-owned VTB Group, Russia’s second-largest lender, is building a 54 billion ruble ($1.7 billion) multi-use complex in Moscow that will include a 12,500-seat basketball stadium, said Andrei Peregoudov, who heads the project.
“There are plenty of ways to promote the league in Russia and there is certainly an enthusiastic audience to be won over here,” Prokhorov said. “The league will need to invest time and money if it expects results, but I fully believe it will be worth it.”