The Future of the NBA lies in Asia
Updated: Feb 12, 2019
Due to the fact that the majority of the teams in the American professional sports industry are primarily located within one nation, with the exception of a few franchises in Canada, the major leagues as a whole run on a drastically different system than many of those across the globe. In contrast, most European and Asian leagues span several countries.
This huge geographical disconnect between American major league sports and the rest of the world has historically generated viewership primarily from North America, but along with the rise of the information era, the traditional barriers preventing global viewership from flourishing are beginning to break down.
North America’s Saturated Market
In 1998, the NBA finals averaged 29.04 million viewers whereas twenty years later, in 2018, the number has dropped significantly to 17.7 million. This statistic however does not necessarily mean that the market as a whole has shrunk since a large portion of the decrease can be attributed to the fact that the way through which society follows NBA games has shifted. The rapid rise in fans who consume condensed highlights through their phones rather than traditional cable television has certainly grown in popularity and negatively affected the conventional viewership numbers many providers often follow.
If we look at the adjusted viewership numbers in the current era of social media from 2010 to 2018, the average viewership of the NBA finals has fluctuated between 15.5 million and 20.4 million people. This suggests that the NBA market has essentially capped off as every potential sports media consumer in North America has already been reached.
On a macro level the NBA as a whole can realistically only muster up more domestic fans within its borders by poaching fans from other major league sports, but this has proven to be a rather difficult and ineffective task. Similarly, on a micro level, individual NBA franchises have also essentially reached full fan capacity with their only hope being stealing fans from other teams (perhaps through free agent acquisitions or large overhauls in rosters), but again such changes often result in insignificant fluctuations of fan support since many followers have had the team they support passed down to them from their family or simply cheer for their hometown.
Untapped Resource in Asia
Twenty years ago, access to quick and reliable NBA related media in Asia was greatly limited. However, with uber-fast communication mediums such as Twitter, Instagram, and high-speed HD streaming, it is evident that anyone who wishes to follow the league can do so with ease in today’s online climate.
In fact, the NBA has come to a $700 million agreement with the Chinese investment conglomerate Tencent Holdings over the next 5 years, providing the rights to 600 games each season. Each of these games pulls in over 2 million views, which is a large sum, but minuscule in comparison to the country’s population. This leaves a lot of room for improvement.
Asia simply has more raw volume potential consumers than anywhere else in the world. With countries such as China and India controlling over a third of the world’s population, the reason why NBA teams have been pushing for growth in Asia recently is that it is still considered by many NBA executives to be an untapped market base that can return dividends. The NBA currently has 6 offices on the continent – Beijing, Hong Kong, Mumbai, Shanghai, and Taipei – and that number will likely continue to grow over the next decade.
The most appealing aspect of the market in Asia is that no one has any familial or home town affiliations to a team and so the market is essentially up for grabs. Although a team like the Los Angeles Lakers could be at the bottom of their conference for years and this will not affect their market base in America, the team will surely have to deal with maintaining their image overseas, a market in which support transcends familial or geographical connections.
Ultimately, the expansion of the NBA into Asia will be great for the league as teams will be allotted more freedom to focus on play-styles and winning games and championships rather than concentrating on branding and selling tickets in their often small market hometown to maximize their earnings and keep their fans.
Players Personal Branding
The expansion into the Asian market is not only good for the organization and franchises, but it is also a massive opportunity for the players. As NBA Deputy Commissioner and Chief Operating Officer Mark Tatum says:
“Our players want to go to Asia… They understand their personal brands and how impactful they can be over there.”
It is no secret that in the modern NBA a player’s popularity is largely correlated to their success and income. If a player is constantly in the media eye and is being talked about, their market value increases. Consider the cases of Tracy McGrady or even Stephon Marbury, two players whose resurrected careers in the markets of Asia netted them more popularity and brand recognition than they ever received in the United States.
On the other hand, NBA teams also want to make money. If a player can, simply by association, net their team more headlines and media space this can be seen as a huge plus for marketing and outreach. Many executive decisions are no longer being determined strictly by management, but to an extent by the demands of the fans. As a result, appealing to supporters continues to grow increasingly more and more important for the modern NBA franchise.
The average NBA career ends quite early, with only 28 players ever retiring after the age 40, so planning for the future is undoubtedly an important factor during many of the players’ careers. With that being said, not every player is lucky enough to have their own brand, one on which they can rely on for income long after their playing days are over. However, if their name can get big enough globally, a player can have hopes of maintaining relevance overseas post retirement.
The NBA landscape has changed dramatically over the last few decades in a way many could not predict and in order for the league to maintain its status and relevance, it must continue to innovate and expand. The Pacific and Atlantic oceans are no longer valid excuses for a lack of promotion and advertising of basketball on the other side of the globe. From the individual players, to the franchises, to the league as a whole, the future of NBA basketball lies in Asia.
Petar Basta is a columnist at The Bench. He can be reached on Twitter at @rastabastamon