EuroleagueVsNBA

M04SEM Sport Organisation and Governance
Coursework prepared by Efstratios Chiotis (6614067) and
Alexandros Efthymiou (6718767)
Date: 13 March 2016

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Euroleague Basketball - NBA

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ABSTRACT
The aim of this report is to critically analyse the organisations of NBA and
Euroleague Basketball, focusing on their respective professionalization and
commercialisation over the course of the years. A short description of their history
and their creation is also presented. The report concludes with the comparison
between the above mentioned organisations which at the moment consist the two
most important stakeholders of basketball worldwide.

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TABLE OF CONTENTS
Abstract……………………………………………………………………………………….2
Introduction…………………………………………………………………………………4
1. Euroleague Basketball………………………………………………………………5
1.1 History of European Basketball Club’s Competitions…………5
1.2 The creation of Euroleague Basketball……………………………...6
1.3 The evolution of Euroleague Basketball…………………………….7
2. NBA…………………………………………………………………………………………..10
2.1 History of NBA………………………………………………………………...10
2.2 Professionalization of NBA……………………………………………….11
2.3.1 Commercialisation of NBA………………………………………...12
2.3.2 Sport Spectating trend………………………………………………14
2.3.3 Fast Growing Technologies………………………………………..14
3. Comparison Euroleague Basketball – NBA …………………………………..15
4. Conclusion………………………………………………………………………………….17
5. References………………………………………………………………………………….19

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Introduction
In the last twenty years, sport has shifted from being a pastime to a business
because of the commercialisation process, which has led sports organisations and
managers to become focused on business principles. This process of
commercialisation has also led sports organisations to be labelled as ‘business-like’
because they become market orientated, pursue operational strategies that increase
the volume of revenue, and become responsive to the customers’ needs. Two
aspects of sport commercialisation have been found. The first one has been an
upsurge in the truly commercial operational activities of sport. Increasingly more
sports organisations across the world have become focused on maximising their
revenue and profit, employing this principle as the fundamental basis for decision
making and strategy development. Consequently, expenditure associated with
sponsorship, rights of television, players’ payments and sports betting have
escalated noticeably in the last few decades as more and more sports organisations
have looked for enhancing their opportunities to generate revenue by implementing a
business approach to the sport management (Tsuji, 2015. Another aspect of
commercialisation has occurred within those sports organisations that are not-for-
profit or owned by the state. These organisations have experienced considerable
cultural and operational transformation within the past ten years, because their
managements have adopted a business-oriented approach in the organisations’
management. So, it indicates that decision making in these organisations reveals
that of commercial organisations, and has led to the constitution of systems including
strategic planning, performance management and quality management.

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1. Euroleague
1.1 History of European Basketball Club’s Competitions
The idea of creating a European Basketball competition for clubs was first discussed
during a FIBA’s conference held in Budapest, in 1957 where the organisation of a
European Cup of Champion Clubs was proposed, mainly in a form trying to copy
what had already happened in football some years before (Velasco n.a.). Indeed the
French newspaper L’Equipe had an important role in its creation (like in football) and
donated the trophy for the first FIBA European Champions Cup, which started in
1958 and ended with ASK Riga as the first European Champion team (Velasco n.a.).
The competition remained under FIBA’s jurisdiction from 1957-58 until 1999-2000.
During these years, there were some changes in the format (i.e. introduction of the
Final Four, formation of groups), entering criteria (not only domestic champions) and
name of the competition (European League since 1991-92, Euroleague since 1996-
97). In essence despite of the increasing popularity of basketball and the
commercialisation of sports in Europe, FIBA was unable to capitalize on this in order
to secure more revenues, attract sponsors or even promote the sport and structure it
in a more professional manner. Thus, the competition itself was far more behind
UEFA’s Champions League as well as NBA in all aspects including marketing,
sponsorship, and financial just to name a few.
Basketball differentiates itself from the majority of other team sports as its governing
body (FIBA) holds a minor role and is less more powerful that the NBA, which
despite being a privately owned organisation and its presence is limited to North
America, is dominant and in many cases sets the rules of the game (Forster 2006).

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1.2 The creation of Euroleague Basketball
At some point, the various stakeholders of European Basketball (mainly ULEB;
European Basketball Leagues Union and the top basketball clubs) realised that the
administrative-governance model of FIBA was not sufficient and a radical change
towards a commercial-enterprise model for the top-tier competition should prevail in
order to make it more attractive and secure higher revenues. Consequently during
the summer of 2000 Euroleague Basketball (EB), a privately owned company
created its own competition with the participation of some of the best basketball
teams who wanted a more professional management of their stakes. During the
2000-01 season two parallel competitions were organised, one by FIBA
(Suproleague) and the other from Euroleague Basketball (Euroleague), and
subsequently two European Champions were crowned at the end of this season.
After discussions for a potential merge were abandoned, FIBA stepped back and left
Euroleague as the only top European competition (Velasco n.a.)
From the very beginning Euroleague Basketball was aware of the commercial
deepening that the competition wanted in order to be successful in the long term.
According to Gomez et al. (2007) categorisation of sport organisations Euroleague
Basketball is one whose main activity is associated to the production of sport
spectacles; in this case Euroleague. Indeed Euroleague was created as an event
that could present a major source for developing commercial activity and could
capitalize the inherent popularity of basketball in Europe through ticketing,
broadcasting rights, merchandising, sponsorship and so on (Gomez et al. 2007:7).
Furthermore Euroleague was based from the start in the institutional logics of
entrepreneurialism and managerialism (Gammelsaeter 2010) as it was managed by
salaried managers and aimed at profit-maximisation. According to Jordi Bertomeu,
who has been the CEO of Euroleague Basketball since 2000 and one of the key
factors for the creation of Euroleague, the main challenge was to persuade clubs
from around Europe, with distinct cultures and mentalities, to work together under
the same concept (Uddin 2013). Apparently these clubs had never worked
collectively and their individual interests as well as their local position within their
respective countries were still of high importance for them. Thus the professionalised
and commercialised approach that Euroleague wanted to bring did not eliminate their

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past interests and logics rather than supplemented them with a new more pan-
European vision towards a common goal.
Euroleague was formed as a breakaway league sensing the powerless role of FIBA
and as a new organisation had to look at what other successful organisations do and
adjust their policies into the needs of European Basketball. As mentioned above, it is
a private league co-owned by the clubs and the national leagues which is a scheme
already practiced successfully before as the case of the English Premier League has
showed. The introduction of entry criteria excluded from the very beginning teams
from smaller media market places and as in the case of UEFA’s Champions League,
being a domestic champion did not always offer qualification for Euroleague. Indeed,
10 clubs were guaranteed their participation in Euroleague from the first season with
a potential expansion after three years, a movement which can only be compared
with the closed league models of North America. Undeniably, NBA was the role
model as the dominant organisation in the world of basketball and Euroleague
throughout its short existence was trying to take the right steps in order to close the
gap with NBA.
1.3 The evolution of Euroleague Basketball
One of the most critical steps concerning the commercialisation of the organisation
was the decision to recover all its commercial properties from a third company that
was in control for the first five years. After this acquisition Euroleague Properties S.A.
(EP) was created which is the sole responsible for the development of the business
from a sporting and commercial perspective as shown in Figure 1. The structure
shown in this figure gives an insight of the importance that commercialisation has for
EB as the Euroleague Commercial Assets S.A. (ECA) is the top-decision making
institution of the company.

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Figure 1 (www.sportando.com)
According to Jordi Bertomeu this strategic decision brought a significant increase in
TV sales and sponsorships as it enabled EB to look after its own interests without
the interference of a third party (Uddin 2013). Indeed the income from sponsors
increased from 5% to about 30% in the next 10 years, and consists nowadays one of
the biggest proportion of income alongside ticket sales and third party contributions
as shown in Figure 2.

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Figure 2 (www.sportando.com)
Another fact of EB’s success is that the popularity of the competition has steadily
grown since EB took over and this can be seen in the average attendance at
matches which more than doubled from around 3,500 in the first season to almost
8,500 in 2015 (West 2015) and as Figure 2 states, ticket sales consist 10.5% of the
total revenue. This is mainly due the continuous efforts by EB to increase the quality
of both the competition and the participating teams. By introducing the system of
licensing for teams, firstly it managed to set high standards in those willing to
participate and secondly gave them the possibility to plan in the long-term without
the fear of losing an important source of revenue from their participation in
Euroleague. Throughout the years EB has also tried to change the actual format of
the competition in order to make it more appealing for the fans. The current format
which exists from 2012 has been quite successful as it enables the best teams
qualifying from the first stage to play more games between each other, thus
increasing competitiveness and quality in the later stages of the competition
(Mantovani 2014). According to Jordi Bertomeu TV ratings had also increased a lot
during these years and the decision to move games on Fridays, thus avoiding the
dominant UEFA’s Champions League on Wednesdays proved critical (Budraitis
2013).
Recently EB is trying to use high-tech technology in order to create unique content
for the fans and increase their engagement with the game. The testing of Google
Glass from players in practices and the referees wearing jersey cameras during
games are both ways to commercialise even more the game and attract new
audiences (Ryan 2014).
Another element of EB’s commercialisation is its ongoing efforts to expand to other
markets in a worldwide level. This has been proved by staging several Final Fours
(the last stage of the competition where the champion is crowned) to large European
cities with no basketball culture (i.e. London 2012) and by sending teams to
exhibition games in China or USA. Internationalisation as part of commercialisation
is key factor for EB’s growth as the market in Europe is quite small and saturated as
well as conquered by football.

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The most recent policy that EB has implemented in order to help the clubs and the
league build consistent and sustainable growth in the long-term is the introduction of
Financial Fair Play regulations, in a similar manner with the one that already exists in
football (Radnedge 2015).
2. NBA
2.1 History of NBA
Its first game is officially recognised by the NBA as having been played in 1946,
ironically, in Toronto Canada. Such a match was between the New York
Knickerbockers and the Toronto Huskies. The league was called the BAA
(Basketball Association of America) at that time, it amalgamated with some other
leagues to establish the NBA which finally merged with the ABA and constituted the
NBA. (Chiba, 2015)
So as to compare the NBA and Euroleague, comprehending the changes that
European basketball have experienced during the last twenty years. With crucial
figures of basketball, such as David Stern, NBA commissioner, discussing the notion
of a prospect international league that will make a bloc of teams from US and
Europe, it is essential to compare the play style and the success of both NBA and
Euroleague (Chiba, 2015).
NBA scouts, on the other hand, were developing and taking interest in successful
players belonging to Europe. On annual basis, the NBA draft started to showcase
European players and the virtual explosion of player traffic was brought by the
achievement of some of them in the NBA between the two continents. (Alvarez et al.,
2011) The interest level developed by the US players and experts of basketball in
the Final four and the Euroleague enhanced even more when national basketball
teams of Europe were fully capable of partaking in international competitions to beat
the US team (Alvarez et al., 2011). It was an indication of a changed time and that
the supremacy of US basketball was not inviolable.

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In the 19th and 20th century, both the US and the European formations and cultural
patterns associated with sports established along quite diverse paths. At first, there
were many sports that became very popular in America than Europe, like baseball,
hockey and basketball versus tennis, gymnastics. The second is that all these sports
were established, structure and practiced in many diverse contexts: that of
educational institutions in the US.
The sports (specifically NBA) in US commercialised and professionalized earlier and
much more comprehensively than in Europe. Also, US professional sports were
planned and organised in closed leagues of rival franchises.
Closed professional leagues in America remained national in scope and meaning for
a long time, and were formed under profit-oriented administrative control devoid of
any regulatory body working at the international level. This frequently led to the
establishment of competing leagues in the same sport branch. In this regard, the
NBA is one of the outstanding professional basketball league formed in North
America. NBA is extensively considered to be the leading professional basketball
league for men across the world.
Lastly, the NBA developed market-driven and independent of the state. Because the
formation and culture of sporting in America appears to be the anomaly in this
respect, many authors have emerged to speak of “America’s sports exceptionalism”
(Brown, 2005; Dyreson and Mangan, 2013).
2.2 Professionalization of NBA
Increasing professionalization of professionals involving in managing sports
organisations is one of the major effects of the commercialisation that has occurred
during the past few decades. In sports organisations all over the world, the presence
of comprehensive strategic planning, strategies related to human resource and
marketing plans have led to enhancements in professional practice (Ratten, 2011).
This professionalization of sport management has been made possible by two key
aspects (Thomas, 2006). The first one is that there has been a fast growing training
and education programme for people who want to be the sport managers. There are

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almost 200 higher education institutes only in North America that offer many degree
programmes in the discipline of sports management and it is one of the fastest-
emerging study domains in US high institutes (Thomas, 2006). Among many others,
USA has one of the top leading sports organisation called the NBA. Similarly, UK,
Japan, Australia, New Zealand and others have sport organisations catering for
professionals and academics. All of these organisations have played a vital role to
the increasing professionalism of people involved in sports management.
The second aspect is that the academic study of sports management has started
and conducted research with the aim to analyse and examine the sports
organisations and their managements so as to establish best practice. In this
domain, research has taken every single aspect of management, like organisational
design, promotion and marketing, sponsorship, the human resource management,
quality management, ethics and equity. Numerous scholarly and trade journals have
been found that disseminate the research findings to an international audience. The
major effects of these two major aspects have been the development of a
management culture on the basis of the belief that effective management practice is
the only best solution for the survival of an organisation. A belief is inherent in this
culture effective management demonstrates business-like management through
which commercialisation of sport management has been driven, and hence sport, in
all industry sectors.
2.3.1 Commercialisation of NBA
Commercialisation has been the leading factor behind the sport development as a
business, leading to an industry that generates revenue for both national and local
economies by means of event revenue, tourism, employment, sponsorship, taxes,
etc. (Puchan, 2005). This commercialisation has been caused to happen mostly by
the actions and interactions of the sport spectating trend; fast changing technologies;
and the professionalization of sports management (Larsen, 2002). Nowadays,

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commercialisation has fundamentally change all of the popular and professional
sports. NBA and media have a “win-win” situation and they both depend on each
other.
As an instance, the National Basketball Association (NBA) and its related sponsors
moved towards the global economy with the core objective of maintaining the levels
of profit (Weichao, 2010). The ‘NBA International’ as an overseas division was
established, deals to broadcast sports were contracted with national networks in
many individual countries, and deals at the regional levels were struck with satellite
channels, like Sky Sports, Star Sports and ESPN International (Weichao, 2010)
NBA League/Team Sponsorship Revenue
“Sponsorship spending on the National Basketball Association and its 30 teams
totalled $739 million in the 2014-2015 season, up 8.9 percent from the previous year,
according to IEG research. Anheuser-Busch is the most active sponsor of the NBA.
Eighty-one percent of properties with a sponsor in the malt beverage category report
a partnership with the company.”(Long, 2015).

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2.3.2 Sport Spectating trend
A growing trend towards sport spectating has been evidenced. By the start of the
1994-95 in the USA, the NBA was being transmitted on in either one or two-hour or
live game packages in more than 135 countries to a projected spectators of over
5550 million (Lee and Pedersen, 2009). In 2001, the NBA had extended to over 200
countries across 42 languages (Lee and Pedersen, 2009). The NBA is the only
mega sports event that has set an amazing attendance record.
Two ways have been found through which this spectator sport trend has
commercialised sport. The first one is that, due to the cash money involved in
sponsorship, gate receipts and television rights, it is necessary to manage sport as a
business venture. The second way is that in return for revenue, there is high level of
expectations of audiences and sponsors about the occasion provided by sport.
Just playing the game is not enough; there needs to be early and half-time
entertainment, extra commentary, match analysis, catering amenities and
merchandising. Spectator sport is indeed an entertainment that needs to be
managed accordingly.
2.3.3Fast Growing Technologies
In the past few decades, fast growing changes in the technological world has
drastically changed the face of sport and the television has been the most
noteworthy of these technologies. According to Owen-Pugh (2007), television has
changed the lives of all of those who are involved in playing, organising and
promoting sport, because greater income has been provided by the television for
established sports and an opportunity for exposure for many minority sports. As far
as the NBA’s success is concerned, fast growing advancement of technology, mainly
the technologies of radio, television and the World Wide Web have had immense
impact. Besides traditional game broadcasts, a variety of diverse programmes is
produced by the NBA. NBA Action and NBA Jams are two programmes that target

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children and teens (Fortunato, 2000). The Internet has greatly opened up new worlds
for the NBA. In past, people had to wait for tomorrow’s newspaper to read the news
of sports. Now, there are many websites, like NBA.com, make people up-to-date all
the time.
In fact, the impact of television on all the sports and their organisations has been
substantial and has coerced the sport commercialisation by requiring sports
organisations to establish the business practices essential to manage and fulfil their
spectators’ demands (Dick and Sack, 2003). Nevertheless, it is a reciprocal
relationship, even though sport has transformed to suit the television needs, this has
been recognised by the television and it has served the spectating trend by
increasing televised sport (Johnston, 2003). The potential this offers for more
viewing rights, sponsorship and therefore more revenue for sport is vast. The market
of television market is extremely competitive. The beginning of satellite, cable and
digital TV; together with increases in the number of terrestrial channels, has had the
effect of more enhancing the sports’ value, as main organisations of broadcasting
compete to broadcast popular mega events of sport. This is evident in the deal made
by NBA.
3. Comparison Euroleague Basketball – NBA
Considering the fact that EB is a relatively new organisation and the NBA is already
established as the most successful basketball league worldwide, it is apparent that in
many cases the former has tried to implement already successful policies by the
latter. If we consider the field of basketball worldwide and the role of NBA as the
predominant body it is quite obvious that EB has adopted similar organisation and
management practices due to the effect of isomorphism (Gammelsaeter, 2010).
First and foremost EB is a joint venture owned by its participating clubs and is
structured in a similar manner like the NBA, emphasising on profit-maximisation and
extensive commercialisation. However NBA is an organisation with a long history

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which grew steadily over the years and passed all phases of development, from
foundation through professionalization and stands at the moment in the phase of
post-commercialisation among other few sports organisations (Beech and Chadwick
2004). EB on the other hand entered in the field of European Basketball, which was
already played in a professional level, committed to commercialise the game and
improve its quality.
The creation of Euroleague Properties and the direct ownership of its commercial
rights was something that NBA Entertainment has done years before and resulted in
the growth in TV and broadcasting revenues for the league. Euroleague TV was
another step towards commercialisation as well as NBA TV and programmes like
NBA Action were for the NBA. Furthermore the partnership with lucrative sponsors,
such as NIKE was something that EB strategically aimed. In fact, EB went a step
further and even named the league ‘Turkish Airlines Euroleague’ after an agreement
with this company which indicates the importance of sponsorships. Sponsorships as
mentioned above consist the second largest stream of revenue for EB, which highly
depends on them for its viability. On the contrary NBA has a lot more sources of
revenue (TV rights, merchandising, gate receipts, etc.) as it operates in a larger
market and has already expand worldwide. Just to get a glimpse of their respective
sizes, the recently announced deal with IMG will offer about 40 million euros for each
Euroleague club per year for the next 10 years (Long, 2015). This partnership will
generate a total of 900 million euros in revenues in a 10 year period whereas only for
the 2014/2015 season, NBA made a revenue of 5.18 billion dollars. Moreover
Euroleague’s clubs minimum budget of 17 million euros is far behind NBA’s
equivalent, which is nearly 100 million dollars per year!
NBA International has successfully managed to promote the game worldwide and
generate fans outside USA. The schedule of games in times that are considered
prime time in other countries (i.e. China) as well as the host of exhibition games
abroad has grown interest and revenues from these countries significantly over the
years. Even the increasing amount of foreign players in the league indicates the
intention of NBA to expand its market worldwide. EB has also tried to promote itself
both in a European level as well as internationally but in a lesser extend as it still
lacks behind in terms of popularity and knowledge.

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A difference can be entailed on the notion of the game itself in both sides of the
Atlantic. For the NBA the aspect of entertainment is the core of the game and fans
require a lot more than attending/watching the actual game. Half-time entertainment,
TV breaks, live commentary from inside the court just to name a few are part of the
game in the NBA. EB on the other hand is still trying to introduce this aspect in the
game as fans in Europe mainly care about results and the idea of win-maximisation
is dominant to many of the participating clubs as well. Thus EB has to adapt and
supplement this existing logics with this perspective of the game that wants to
promote.
Another significant difference is apparent on the major role that the NBA players
have in the affairs of the league. The National Basketball Players Association
(NBPA) is considered one of the key stakeholders and has the power to affect the
decisions made by the league (i.e. lockout) (Bohlig 2014). Moreover star players are
essential for the NBA as the revenues generated from jersey sales are quite
significant. On the contrary, there is no union representing the athletes playing in
Euroleague neither merchandising of kits is the main focus of Euroleague clubs.
Last but not least, the superiority of NBA in terms of commercialisation is manifested
in its most glamorous event, the All-Star Game which is a three days event where
everything is about entertainment (Moutis 2015). The event takes place in a different
city each year with the participation from the best players in the league voted by the
fans and gathers the attention of local fans as well as worldwide. The last one held in
Toronto gathered 7.6 million viewers on average and generated approximately 195
million dollars (Davidson 2015). EB has not yet decided to host such an event but it
might have to consider it as the potential revenues could be quite significant.
4. Conclusion
This report has critically analysed both Euroleague Basketball and NBA and how this
sports organisations have transformed over time due to the process of
commercialisation and professionalization. Further, according to Nafziger (2004),

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trends of commercialisation, professionalization and globalisation continue on both
sides that ultimately accelerate a convergence of the sports model followed by North
America and Europe in more than a few respects and on all competition levels
(Nafziger, 2004). At present NBA remains the dominant organisation in the field of
basketball despite the continuous efforts from EB to close the gap, both in terms of
professionalization and commercialisation. However, EB has managed to grow
substantially in its short history and successfully implement several strategies
already tested by the NBA.

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