April 2010 Sports Business Intl[1]


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Sports Business International Interview w/Ron Scott

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April 2010 Sports Business Intl[1]

  1. 1. AgendaUK BASKETBALL READY FOR TAKE-OFFUS and UK investors are poised to make a vibrant British basketball league a reality, reports Matthew Glendinning. For those who have followed the on and American expertise and investment. The US Under this model, anyone who wants to invest in off fortunes of British basketball over the last 25 connection runs throughout the project. the sport now has the opportunity to get involved years, the push to launch a new professional UK The league’s strategy of an owner/partner without going in ‘naked’.” league in November 2011 may well be greeted model, which will provide central funding The fund-raising kicks off in March with with some scepticism. to partner clubs, was reportedly chosen in an initial target of $25million, which, Scott After all, images of drafty sports halls, consultation with co-founder and BBA director suggests, is likely to come primarily from US echoing with a softcore of fans cheering on the Ed Tapscott, the former CEO of the Charlotte investors even though UK football’s financial Jets, Heat and Thunder from the likes of Chester, Bobcats NBA franchise. Mr Fix it, Keith Harris [chairman of investment Guildford and Worthing are hard to dismiss. Scott himself is based in New York, but claims bank Seymour Pierce], has come on board as a There is also the fact that those representing that the ownership model that the BBA has set financial advisor. the proposed new league have been waiting up is tailored to the needs of the UK market. “In Harris’ involvement was highlighted by the in the wings since 2007, a sign perhaps that terms of the ownership model, we have looked at UK’s Financial Times newspaper when the league basketball has trouble convincing serious what’s working and what wouldn’t work,” Scott launched its concept last year, but Scott rebuts investors of its role in the UK sports market. tells SportBusiness International. the obvious conclusions. But the man charged with getting this mini- “We are not the Indian Premier League - “[Harris] is the king of football finance and the NBA off the ground in the UK is confident he cricket in India is very different from basketball Financial Times said we would approach football has the right formula. in UK - so we could not simply sell off the clubs, but I don’t think that accurately portrays British Basketball Association (BBA) CEO franchise rights. For us, the danger point comes what we are doing,” he explains. Ron Scott, a veteran of Wall Street, is looking for if there is no central control. For this reason, “We have selected Seymour Pierce as our eight teams from eight major cities, each with an we have chosen an ownership/partner model. finance partners, but US investors are our annual budget of $2.5 million to $3.5 million, to Investors in the BBA will own and fund all the cornerstone. This has to be a joint UK/US commit to the new league for next season. teams in partnership with the local venue owners. initiative and you need guys who have built He intends to go head-to-head with “The central model provides the stability, successful businesses, launched leagues and the long-established British Basketball and once we’ve established the league after built franchises.” League, converting it, he says, into a type of around five years, we would consider selling Scott, moreover, is content to have the support“development league” and he aims to do it with them [individual franchises] to private investors. of the NBA on the project. “We’ve been talking constantly to the NBA for the last few years,” he says. “We didn’t go to them with our hands out looking for things, but they want basketball to fact of the month: succeed in the UK just as much as we do. They support us just as they’d support anyone trying Cycling Classics season kicks off with Milano - San Remo to build a successful basketball organisation.” The NBA’s David Stern himself mentioned The Cycling Classics season begins on Saturday, 20 March with the 101st edition of Milano - the BBA more than once during his NBA San Remo. Last year’s 100th edition of the race was won by Mark CAVENDISH (GBR). Europe Live press conference at London’s O2 in September last year. Three of the other Cycling Classics have held more editions than Milano - San Remo with But this doesn’t mean that the NBA will have Paris - Roubaix topping the list with its 108th race this year. a stake in the league or ask to brand the league as an NBA UK. “We have a robust relationship Most editions held per Cycling Classic with the NBA,” adds Scott. “Their view is that there is a great opportunity in the UK and we # 2010 edition Race First edition Winner first race continue to enjoy an open relationship with 108 Paris - Roubaix 1896 Josef Fischer (GER) them. They’ve given us valuable suggestions and 106 Paris - Tours 1896 Eugène Prévost (FRA) large amounts expertise, but that’s the extent of 104 Giro di Lombardia 1905 Giovanni Gerbi (ITA) the involvement.” Scott, however, does have he support of a 101 Milano - San Remo 1907 Lucien Petit-Breton (FRA) number of ex-NBA executives and has learnt 98 Scheldeprijs 1907 Maurice Leturgie (FRA) from the successful US model that teams have 96 Liège - Bastogne - Liège 1892 Léon Houa (BEL) to be located in the major urban markets for the league to pay.“You have to have teams in major 94 Ronde van Vlaanderen 1913 Paul Deman (BEL) population centres,” Scott explains. 93* Meisterschaft von Zürich 1910 Paul Suter (SUI) “Getting the right venues is also a priority - 90 Paris - Bruxelles 1893 André Henry (BEL) you can’t have a professional league playing in facilities with a capacity of 1,200. But, you have to 85* Bordeaux - Paris 1891 George Mills (GBR) start with something practical. You can’t just start * Note: Meisterschaft von Zürich and Bordeaux - Paris are not held anymore. with the O2, because you’re not going to fill it. “But something like Birmingham’s NIA or the Sheffield Arena would be ideal…(and) what we will offer is value for money. It’ll cost around £1012 SportBusiness International • No. 154 • 03.10
  2. 2. February 2010, COMMUNIQUE syracuse US College Sport is becoming bigger and bigger business and, increasingLY, a disguised version of professional sport. At the American university I World Series or the NBA Finals in teach at, Syracuse University (SU), fan avidity and economic value to the sport is big business … particularly host city. the business of college basketball The NCAA is also thinking about where the Orangemen (the school’s terminating its contract with long- nickname) are ranked second or third time partner CBS early (it has an in the US by various media polls. 11-year US$6-billion contract until For Europeans, Africans, 2013) in order to snare a bigger and Australians and people from more lucrative deal (spread over 14 the Middle East or Far East, this years) with parties like ESPN, Fox or collegiate distinction might not sound Comcast/NBC. like much. The decision must be made by But as many SportBusiness August 31, 2010 if the NCAA is to opt International readers know, the out of the existing contract. National Collegiate Athletic Mixed into this complex process Association (NCAA), the US governing is the challenge the NCAA faces body for men’s and women’s in replacing its recently departed university athletics is a massive and president due to the death of Miles supremely monetised Brand in September. machine. Brand had served No greater proof in his position for of that may exist six years and had than here in been attempting Syracuse, a gritty to address the snow-covered financial dynamics city of 150,000. of collegiate sports That’s because where a college on Saturday night, gridiron coach like February 27, SU the University of filled its venerable Texas’ Mack Brown Carrier Dome, placing could be paid $5-million nearly 35,000 in one to supervise approximately building for an ESPN-televised 13 football games per year. game involving Big East conference Interestingly, the University of Texas, rival Villanova. This regular-season a public education institution, has contest, sold out for weeks in increased Brown’s salary more by advance, immediately set the NCAA than 500 per cent since he signed record for basketball attendance for his first deal for $750,000 in 1997. an “on-campus” game and student Since then, the Longhorns (the Texas fervor for the #2 Orange proceeded school nickname) have reportedly Nick George of Great Britain at the O2 Arena - Getty Images Sport to dominate broadcast, website and restructured Brown’s contract six digital platforms around the US. times giving him raises in 1999, 2000,or £12 to go to a BBA game. How much do you Unsurprisingly, the concept of 2002, 2005, 2007 and 2009.have to pay to go see Chelsea play?” media saturation is critical to any When the coach earns far more With the Olympics coming to London in American sports property and than the president of the university2012 and Great Britain developing a competitive the NCAA is particularly adept at and the governor of the stateteam, basketball’s potential in the UK has not leveraging media, fan and alumni combined, it leads to a commonexactly been a secret for some time. So why has interest in NCAA sports. water-cooler (or tea room) discussionthe BBA waited three years to get the project In fact, as this story goes to press, of whether collegiate sports inoff the ground. “What happened? There was a the NCAA is debating a decision to America is simply a disguised versioncredit crunch,” says Scott. “But remember, this is expand the season-ending collegiate of professional sports. It is, of course.the first time we’ve actually gone out to market. basketball tournament - known toRight now, it’s the cold investor push, and we sponsors and fans as March Madness Rick Burton is the David B. Falkhave confidence in raising the finance. - from 65 to 96 US universities. Professor of Sport Management at “Everyone in global basketball, not just us, is This event, which culminates with Syracuse University and the formerlooking at London 2012 and UK basketball and the historic NCAA Final Four weekend, chief marketing officer of the UScollectively we’ll crack it. We believe the whole rivals the Super Bowl, baseball’s Olympic Committee.game in the UK will fall in to line if there issomething to aspire to.” SportBusiness International • No.154 • 03.10 13