By Aris Barkas/ barkas@eurohoops.net
In a new analysis, posted on the 13th of May, the Spanish “Instituto Coordenadas – Governance and applied economics”, a think tank and research institution focused on the interaction between governance and applied economics, continues to poses questions about the impact of the NBA Europe model to European sports.
With the title “Sport as a Strategic Asset of the European Union: Lessons from the NBA Europe Case” the paper sums up the public information about the NBA Europe project.
It has to be noted however, that the analysis includes also outdated information. According to the paper “the details known so far — entry fees for clubs ranging between €500 million and €1 billion, strategic control shifted outside Europe, distribution of approximately 50% of operating profits to the NBA and its owners, and a semi-closed format with reserved spots — have sparked a debate that goes far beyond sports and enters directly into European economic and industrial policy”.
As Eurohoops reported a few days ago, this is not the case anymore. Neither the NBA nor its owners will take distributions during NBA Europe’s ramp-up period, which is expected to take years. On the other hand, the participating teams will have guaranteed revenues.
On the other hand, while the NBA and FIBA would at first own 52% of this new structure, the participating teams would eventually have a majority equity stake following expansion in future years.
What doesn’t change is the following part of the analysis: “The NBA has acknowledged that NBA Europe would be built around the best players available after the roughly 450 players already competing in the NBA, suggesting a developmental platform rather than a final destination for elite talent. A strict salary cap would reinforce that perception. The EuroLeague — with established clubs, historic cities, and loyal fan bases — would not appear to start from a clear competitive disadvantage. The risk that NBA Europe positions itself as a premium league while still being perceived as second-tier introduces direct tension with its audiovisual and commercial monetization potential… Historical precedents suggest caution: the Basketball Africa League, the G-League, and the WNBA have all required long investment periods and, in the most comparable case, NFL Europe ultimately shut down”.
According to the paper, the conclusion is simple: “The decisive question is not whether the project can be launched, but what would happen if it fails, because in that scenario the economic, sporting, and institutional costs would fall primarily on European basketball and, by extension, on the European sports model itself”.
So it’s more than obvious that the ideal scenario is the one mentioned already both by NBA commissioner Adam Silver and EuroLeague CEO Chus Bueno, a honest collaboration between all involving part, something that FIBA secretary general Andreas Zagklis also mentioned last December in his end of the year press conference as a goal.