2019 is coming to an end. And it is likely that it will be remembered for some key milestones in European basketball which have a direct impact on national leagues and a vast majority of the clubs that are not competing at the highest level in Europe. For the first time in the history of European basketball, participation to the continent’s top-tier competition was detached from the sporting performance in any of the domestic leagues in Europe. Number of participants in that competition was increased to 18 (from 16 last year) which added additional pressure to the overall competition calendar in an Olympic season. And also for the first time, a major team like Olympiacos is playing only in Euroleague after being relegated to the second division in Greece. All these developments are deemed to have (intentionally or not) an adverse impact on the local leagues and teams that are not a Euroleague-participant.
While this might hold true in certain aspects, the main reaction to these developments should not only be criticism and doing nothing else. In the contrary, domestic leagues and teams should act strategically and start developing a playbook which should be aiming at finding alternative ways of sustainable growth and increasing popularity in local competitions.
Below are ten suggestions for the managers of local leagues and teams to achieve that goal:
1) Believe in the growth potential of basketball
Basketball is the second most popular sport globally and in many of the European countries. And it is growing with huge potential for further growth in the upcoming years. Whatever decision you take, this fact should be the overarching guide to you and your organizations. You can take the right strategic steps, only if this fact is realized by you and your teams.
2) Change your mindset
No sponsor, no company, no federation, no government institution etc. have the obligation to support you. They just don’t. You need to focus on the value that your organization will be generating for each stakeholder rather than taking a passive role and just waiting for “donations” to your organizations from “sugar daddies” or government bodies which may not have the same goals as your team does. Your main duty is to define, produce, present and sell a product in the best way you can to the best-matching audience that you can attract. The main product that you should focus on is the home-games that your team plays. And at the beginning not even all home-games should be targeted, rather some key games which must be “sold out” to the right “fans”. And never forget, as in any other business, the tickets do not sell themselves. Selling is an important activity which requires systematic efforts.
3) Integrate your sporting goals into your “business” goals
You should always know the business context of any sporting goals that you might set for your organization or any decision you make. The main guiding principle should always be: You can only spend as much money as you are capable of earning. Your budget should have a direct impact (as an important constraint) on defining your season goals from a sporting perspective. And vice versa… This requires deploying certain tools and techniques such as scenario planning and different budgeting methods. It also requires for instance having some key capabilities such as an effective scouting system and network as well as a solid youth development program (pls see below for more details). But again, the overall rule is your sporting goals should always be in full synch with your business goals.
4) Know your “fans”
Changing your mindset as discussed above also includes a shift in the way you see your fans. While it is important to always appreciate the “devotion” and “passion” as well as the “loyalty” of your supporters, it is extremely important to see them also as “customers”. This should definitely not mean that you should always prioritize the commercial side of basketball. However, completely ignoring your fans’ expectations and preferences will not definitely help you sell tickets. For that purpose, it is a must that you have a clear idea about the profile of your fans. Don’t forget, you would not be doing such a profile analysis for your internal purposes. Instead, it has to be done as an evidence of the value that your organization can create for some key stakeholders such as sponsors. Therefore, do not listen to those managers who argue that they would already know their audience very well and there would not be a need for performing an in-depth analysis of your fan base. The point that they are missing is: Unless you put it on paper in a convincing way, it has no value for gaining potential partners and sponsors.
5) Redefine your (sponsoring) strategy
After you start believing more in the growth potential of basketball and changing your mindset as discussed above, the next logical step that you should take will be redefining your sponsoring strategy. In European basketball sponsoring revenues still represent (by far) the most significant revenue source. You should never forget that, unlike donations, sponsoring is not an arrangement without any return on investment. As the company budgets get tighter, it is becoming more evident that you should focus on the value that you will be providing to the sponsors in exchange of their sponsoring engagement. This value can take many forms. You should focus on potential sponsors’ values and business priorities and try to target such companies which might have a (natural) interest in sports marketing. Another aspect to consider should be creating a broad base of sponsors like in the form of a pyramid, rather than having only a few sponsors with a high degree of (financial) dependency. Also, in turbulent times where economic challenges become tougher, it might get more difficult to find sponsors with “deep pockets”. Therefore, it might be more effective to focus on alternative concepts such as “micro sponsoring” and “membership”.
6) Invest more in youth development programs
Player salaries represent the most significant expense item in clubs’ budgets. In general, it can be argued that developing own players will lead to a “cheaper” scenario rather than transferring players from other teams, provided that your team is capable of protecting its contractual rights and thus can get paid in case of transfer of its players to other teams. Another advantage of developing own players is the fact that the influence of players’ managers can be minimized in that scenario which can lead to saving of agent fees. Furthermore, establishing basketball schools and camps can add additional income to club budgets while increasing the probability of detecting a talent for the future. Player development is one of the key activities of many domestic teams and it represents the backbone of increasing the popularity of basketball in local markets.
7) Ensure an effective financial management
The main rule as mentioned above should always be “do not spend more than you earn”. It sounds easy but it requires a systematic effort and use of expertise in financial management. Do not forget that budget should be a living document to be reviewed and if necessary revised on a regular basis. Another function of finance is to develop the right strategy for the overall club management including the provision of support in finding new revenue sources and assessing their profitability as well as future growth potential. Financial management should not be reduced to “bookkeeping” and “creation of a budget at the beginning of the season”. It should rather be positioned as a strategic partner to the club and league management.
8) Invest more in people
You need to stop believing that every addition to your headcount is a burden to your budget. While it is true that hiring (full time) employees does represent a commitment for your organization, if planned properly, every additional headcount especially in sales and sponsoring will generate more income than expense. Key here is to have a reasonable plan in place which will lead to generation of additional income through additional headcount being hired. In addition to hiring full time employees, there are many other options for creating additional resources.
9) Be creative, leverage social media and embrace digitization
Start thinking out of the box about any problem that you might be facing. If it is lack of resources, consider finding more volunteers which have a certain qualification level. Develop cooperation programs with colleges or other institutions to enable young talents gain experience while helping you in achieving your goals. Develop new ways of generating income, from micro sponsoring, crowd funding, special events, organizations to better and more effective use of social media. Realize the fact that social media is more and more becoming a game changer for the industry. It enables a more cost-efficient methods for reaching out to your target audiences and develop a more direct way of communicating with them. Digitization is also a key game changer. You will need to deal with it sooner or later. Start developing a strategy for it. The sooner the better.
10) Never forget your mission
National leagues and teams are the locomotives of European basketball. They are the key players that have the mission to fascinate kids and youth and attract them to basketball in terms of giving them the opportunity of actively participating rather than just watching the games. They also have a key mission in developing next generation talents of European basketball. More importantly, without the local teams and domestic leagues, European basketball cannot grow any further. Please always remember the importance of your mission and what kind of an important role you are playing for basketball in Europe. Despite all the challenges and difficulties you might be facing, regardless of whether at the lowest or highest competition level. Be positive and go back to point 1) above. Basketball has a great potential to grow ?