FIBA’s headquarters in Geneva will host a meeting on Tuesday attended by senior representatives of the EuroLeague and the NBA to discuss the future of continental basketball following the potential arrival of the NBA in Europe, with the connivance of FIBA itself, in the 2027-28 season
A new competition and a new scenario that raises many questions and inevitably clashes with the existing EuroLeague tournament, with the NBA trying to snatch some of its teams and with investment funds from which it wants to get the money, but which generates a lot of concern and risk. There are fears that all this could harm, break or fragment European basketball
Avoiding the European Super League
It is urgent to avoid another chaotic situation like the one already experienced by continental basketball in the 2000-01 season with the coincidence of the Euroleague with a new FIBA Suproleague, which fortunately only lasted one year, or that another situation like the recent Super League is generated, now in basketball, where we already have the experience of football, where it did a lot of damage and led to the ridiculousness of some clubs, facing each other and also with their fans.
It is time to flee from confrontations and wars, to put aside pride, to build bridges and study possible synergies in order to reach a consensus between the parties. With this mentality, Chus Bueno, CEO of the Euroleague, and George Aivazoglou, general manager of the NBA for Europe and the Middle East, who is in principle tasked by his boss, Adam Silver, NBA commissioner, will attend the meeting
The Euroleague has the cities and the best teams
The EuroLeague has the basketball teams and cities, century-old clubs and hundreds of thousands of fans. And the NBA has expressed its promises to create a great competition and substantial revenues for the teams in the long term, because commissioner Adam Silver already announced in Berlin last January that in the short term, they will lose money.
On the other hand, the group of clubs it manages, with no disrespect to any of them, are mostly second-tier European clubs with the exception of Real Madrid, the only major EuroLeague team that risks once again being the team that breaks the current ecosystem with the EuroLeague, of which it is a founder, by creating a basketball Super League, and this time against its supporters who issued a statement in favour of staying in the EuroLeague.
The fear of an E-League
All this with the utmost attention of the funds, which do not usually risk their money in B products no matter how important the NBA brand is and with the fear that it will be a E-League, a kind of European development league to generate players for their teams in the United States because the best will still be there.
For the good of European basketball, it would be better if we joined the Euroleague
Adam Silver has already experienced first-hand the enormous difficulties he has encountered in creating the NBA Europe that he had planned. Perhaps that is why he has opened the door to reaching an agreement with the Euroleague: “For the good of European basketball, it would be best if we joined forces with the Euroleague,” he said on March 26 after a board meeting. “We would have to devise an approach to grow basketball across Europe. This involves complementing national leagues and working together with Euroleague and FIBA.”
The NBA’s dilemma: To add or to invade and conquer
Money, management and product on the court. Those have always been the three main pillars on which the NBA has built its multi-billion dollar business. But the top-level product, as of today, is in the EuroLeague. And Adam Silver, a smart man, does not hide that the best solution would be to seek synergies with it. Trying to gobble up historic European clubs and loyal fans under the guise of doing business is not going to convince anyone. He knows that Europe would turn its back on an invasion with a model like the failed Super League. Having two separate leagues would fragment the market and would not only be detrimental to basketball. Its logo and global brand would also be negatively affected.
The NBA has tried to convince EuroLeague clubs and especially soccer teams such as PSG, City and those that already have basketball, such as Bayern or Barcelona, and none of them believe the NBA’s numbers and think that their entry position has been somewhat arrogant or dominant. They are not interested.
The NBA does not corroborate its promises with data
In addition, football teams do not want to create a situation like the one that occurred with the Super League and if they do enter, it will have to be with an agreement with the EuroLeague and not breaking the ecosystem with a confrontation. On the other hand, it is trying to convince investment funds, assuring them that in its new competition everything will be wonderful in sporting and economic terms, but without providing a single piece of data that could corroborate these intentions as certainties.
One thing is the promises, which are undoubtedly beautiful, and another is the harsh reality that, much to the chagrin of Adam Silver, a very high-level manager, is not at all encouraging for his project
Is it better than the current Euroleague?
In sporting terms, the EuroLeague has managed to get 10 of its 13 A-Licence clubs – Efes, Baskonia, Barcelona, Fenerbahce, Maccabi, Olimpia Milan, Olympiakos, Panathinaikos, Bayern Munich, Zalguiris and CSKA (the latter with a suspended licence) – to renew for 10 years with a penalty of 10 million euros if they fail to do so. Of the remaining three, Fenerbahce has given verbal approval to the plan and will sign shortly, Real Madrid is still considering it and ASVEL Villeurbanne is more out than in due to budget, pavilion and poor sporting results. It seems that they are not up to the level required.
And Valencia Basket, Hapoel Tel Aviv, Dubai Basketball and PAOK Thessaloniki have shown great interest in being franchised by the EuroLeague, along with other teams that have made a similar request showing their great interest in being so, such as Crvena Zvezda, Partizan, Besiktas, Hapoel Jerusalem, Paris Basketball, Virtus Bologna, Bahcesehir, Dubai Basketball, Zenit and Napoli. In addition, investors from Rome and London (but not related to the London Lions) have expressed a similar desire.
The NBA, with a B team waiting for Real Madrid
The NBA, pending confirmation of whether it will be able to count on Real Madrid, the most successful club on the continent with 11 EuroLeagues, has teams from the Basketball Champions League (BCL), the third European competition, in its new competition. Teams such as AEK Athens, Unicaja, Rytas Vilnius, London Lions, Alba Berlin, Galatasaray, Roma, Manchester and ASVEL Villeurbanne, are practically out of the EuroLeague and whose owner Tony Parker wants them in the NBA.
If you add to this the fact that it is still a second division NBA USA league, and whose purpose is the creation of talent for NBA USA, and therefore cannot compete with it, it does not seem that the product is enough to ask for between 500 and 1000 million. This is especially true for soccer clubs that are bigger brands than the NBA teams themselves and do not want to be a supplier to New York or its second division. They are top and not second division of anyone.
Do the numbers add up for such an investment?
In economic terms, all that glitters does not appear to be gold in the NBA’s proposal, which hired JP Morgan and Banco Rain to analyze the economic model and investment opportunity, and whose lawyers are working on adapting to Europe a system with salary caps and revenue sharing. It leaked that it already had investors willing to shell out between 500 million and 2 billion. But to date, no names have been forthcoming. To shell out such amounts of money without even knowing which teams will participate seems, to say the least, a very high-risk business
Think of the WNBA. I’m not suggesting that there is compatibility. What we’re telling stakeholders is that they need to have a long-term perspective
According to Bloomberg, the NBA expects franchises in its new European league to reach a $1 billion valuation. This is double the $500 million entry fee for new franchises. But it also notes that the NBA also wants to take 45% of the profit generated in Europe, when UEFA takes 2.5%. Silver compared the NBA project in Europe with the WNBA, highlighting the initial difficulties, but also its subsequent consolidation. “Think of the WNBA. I’m not suggesting there’s compatibility. What we’re telling stakeholders is that they need to have a long-term perspective,” he said.
A profitable NBA Europe… in the long term
The truth is that all the leagues outside the NBA created by it, whether the BAL (Basketball Africa League), the WNBA, or the 2K league that has already closed, lost money. Silver does not hide that in the short term there will be no profits: “It’s similar to any startup. It has to be investors and, over time, we hope to see a return. If we are successful in launching this league, it will be some time before it is a commercially viable business. All participants recognize that this is not for those with a short-term view. This is something that will take decades to build.”
If we are successful in launching this league, it will be some time before it is a commercially viable business…. This is something that will take decades to build
The EuroLeague, meanwhile, has hired the services of JB Capital Markets, a reputable investment bank founded by Javier Botin, which is analysing the expansion plan. The current teams’ licences are estimated to be worth between 50 million and just over 200 million euros each, with clubs such as Real Madrid at the upper end of this range. The value of this licence is expected to multiply as its status is transformed into franchises or indefinite licences.
The extension of licenses, in an initial estimate, will set the price of franchises between 40 and 75 million euros. It is expected that the franchises will be a reality by the 2027-28 season. The ECA shareholder clubs that have renewed their 10-year license would receive access to the franchise at no additional cost. From that point on, the door would be opened to commercialize additional franchises in a staggered expansion plan of the competition that could have up to 24 teams within three years, with between 18 and 20 franchises.
The value of the Euroleague will reach 2.5 billion in 2029
The competition’s valuation is also expected to grow rapidly, reaching a valuation of €2.5 billion in 2029, according to an official statement and validated by JB Capital, which is attracting a large number of top-tier investors to take an interest in the project.The NBA logo is attractive, but the product and investment they are asking for is not so attractive. Too much risk is asked for someone who has never operated in Europe. Undoubtedly, to avoid risks and maximize the opportunity to create a united league with the best of each would be the best option.
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