On a protracted war.
Editor’s note: This article is from the WeChat public account “Internet refers to the north” (ID: Hlwzhibei), the author refers to Beijun.
The first day of the holiday is to resume the update, let’s talk about the NBA. Since yesterday (October 7th) NBA President Xiao Hua stated that he “supports Morey”, it is not difficult to find that the discussion direction of this controversy has undergone subtle changes.
Before this, the attitude of most people is “You can’t earn our money and pay us”. Unless Morley officially apologizes and is punished, the Chinese market will no longer have the Rocket’s body. At the office.
After this, although our attitude is still firm and even more determined, but gradually began to appear a part of the “self-reflection” voice, “from the NBA’s official attitude, is not the Chinese market is not our imagination So important?”
This is indeed a question worthy of deliberation.
NBAWhat do you earn now?
In all fairness, Xiao Hua has a reason to “be emboldened.” For example, the high-priced broadcast contract signed in 2014 and effective in 2016-17, the total amount reached 9 billion US dollars for 9 years. It was once regarded as a timely rain to narrow the gap between the rich and the poor of the alliance teams and promote the overall prosperity of the NBA. It did get results very quickly:
2016-17
After the end of the season, a total of 14 NBA teams were in a state of net income loss, and the number of losing teams fell to 9 after the league’s dividends.
In addition, the NBA also has a copy from Nike. The long-term contract, worth 8 billion US dollars for 8 years, compared with the contract executed by Adidas before June 2015, the annual sponsorship amount increased by 245% – plus Anheuser-Busch (the one that produces Budweiser beer) The company’s sponsorship of other companies, the NBA’s single-season income has been close to $1 billion.
But this is not the place where Xiao Hua is the most emboldened. In the NBA’s business model, the core part comes from basketball-related income (BRI), including the TV broadcast revenue mentioned above, NBA peripheral goods business (such as jerseys), ticket sales and so on.
In this respect, the performance of the NBA in recent years is still very good. For example, starting from the 2017-2018 season, the NBA began to allow sponsors’ advertisements to appear on the jerseys. On average, it can increase the income of the team by nearly 10 million US dollars per year, which is obviously much more moisturized than the pure sales jerseys in the past.
The ticket income is relatively stable and strong. The current average fare for the NBA regular season is about $100. According to the 15,000 fans on the field and 41 home games per season, each team can get about 61.5 million dollars per season. Teams with higher attendance, such as the Chicago Bulls (20,776 players per game in 2017-18), can jump $80 million.
So what is the income situation from overseas markets, especially the Chinese market? The NBA’s official financial report did not disclose relevant data. According to Forbes, the NBA’s China market completed $150 million in revenue in 2012 and is in a state of rapid growth, such as the five-year online media rights contract signed by the NBA and Tencent in 2016. At $700 million a year, the amount after the renewal of this year rose to $1.5 billion.
Remember the nine-year, $24 billion contract offered by the US media TNT and ESPN mentioned at the beginning? To a certain extent, it can be understood that the Chinese market can contribute about 10% of the annual revenue in the revenue-generating broadcasting business.
So Xiao Hua’s mentality might look like this: Strong>The Chinese market can indeed bring considerable income, but the overall weight does not threaten the main framework of the NBA business model, except for the rocket, which is visible to the Chinese market, and loses support from the Chinese market for the NBA. The damage is not too big.
So our counter-products are useless?
It is actually useful.
One of the simplest logics is that sponsors and broadcasters are willing to sign high-profile contracts with a sports league for years (not limited to NBAs, including Premier League, La Liga, Champions League, F1, etc.), in fact It was a gamble with the sports league:
The sponsor evaluates the existing market size of the sports league and its future growth curve, and then buys out their recognized “growth curve” with sufficient amount
.
This is also the main reason why many long-term sponsorship/relay contracts look very premium.because. For example, the Premier League giants Manchester United and Adidas 10 years 750 million pounds jersey contract, which is equivalent to three times the price of competing Nike, the adidas CEO Herbert Heiner explained that he believes that “the next 10 years Sales of related products will reach 1 billion”.
It is also worth noting that the sponsors and broadcasters are based on the existing market size when evaluating the growth curve of the sports league.
In other words, when TNT and ESPN offer 9-year, $24 billion in sky-high price contracts, they not only consider the current influence of the NBA, but also bet on the growing market size of the NBA. It includes the Chinese market that contributes about 10% of revenue.
And according to Xiao Hua’s previous statement, the NBA may even help basketball outweigh football in terms of influence. The reason is “our game is indoors, the light is sufficient, the time is up to 2 hours and 15 minutes”, “very suitable for watching the game on the mobile phone”, “also suitable for participation in social media, online games, I don’t know what limit”.
So although due to the validity of the contract and the spirit of the contract of the American people, the NBA, which has just signed a long-term, will not be affected too much in income in recent years, but when they return At the negotiating table, after losing the fast-growing Chinese market, especially on the Internet, whether there are enough chips to continue to let the gold lords continue to gamble, is full of variables.
You can’t expect Xiao Hua to really lead basketball, counterattack the European market in the five major leagues, and the Indian market for cricket.
Of course, some people say that like the Clippers boss Ballmer, the pioneer of the pioneers Paul Allen, or the boss of Cuban, the purpose of holding the NBA team is not just for Realizing it, so it will not have much impact. This has to be said twice.
On the one hand, the intuitiveness of the market is shrinking, obviously not the head club in the NBA ecosystem – as I said in the first paragraph, mature business models can help them make up as much as possible Sun Shu – but small and medium-sized teams and downstream practitioners (including players, coaches, team teams, etc.) attached to the entire ecological survival.
In normal times, the head team as a board can help the sports leagues to let the capital go in. The small and medium-sized teams can get the rain and the dew through the coordination of the alliance; after the market shrinks, the share of the rain and dew will not only be relatively reduced. Relative to the capital side, the advantage of the head team has been infinitely magnified, becoming the first choice or even the only choice for “capital is willing to walk in” (CBA has also had similar things, interested friends can search for Li Ning 5 years 2 billion And Yi Jianlian throwing sneakers incident).
Don’t forget the ABA that Beijing Olympics fought in the United States that year, was nicknamed by many fans as”Lost the Sun Yat-sen’s Jungle League”, no longer rely on the big ecological NBDL, WNBA ability to escape the birth day?
On the other hand, the ills of the American professional manager model This is actually more prominent in the football field, such as Arsenal boss Kroenke, Manchester United boss Glazer family. Simply put, when sports are quite mature, become a serious industry, a serious business, professional managers may not be responsible for the results, but it is certainly responsible for the financial statements.
It is conceivable that after a few quarters, when the financial statements began to show a downward arc under the linearity of time, the club’s people would naturally take Xiao Hua’s explanation.
Of course this will be a long-lasting battle, but a protracted battle that can have positive results and meaningful results. If you abandon the common ground while reserving differences, then we can only act according to economic laws.