The NBA's New $1 Billion Africa Entity
The NBA has officially formed NBA Africa, the new business entity tasked with accelerating the NBA's brand throughout the world's second-most-populous continent.
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Let’s play a game: What do all these guys have in common?
They were all born in Africa, beat the odds, and became successful NBA players.
But now, after originally announcing the foundation of the league more than two years ago, the Basketball Africa League (BAL) has officially launched — bringing an NBA-sponsored program to the second-most-populous continent in the world.
In total, Africa has already produced more than 80 current and former NBA players.
From the players to the fans, the NBA has become increasingly more global in the six short years since Adam Silver was named commissioner. There are more international players, global viewership is up, and league-wide revenue has nearly doubled — from $4.8 billion in 2014 to $8.8 billion in 2019.
But there is just one problem: Over the last few years, the growth of international players seems to be experiencing a plateau.
International Players on NBA Rosters
2014: 85 players
2016: 110 players
2017: 108 players
2019: 108 players
2020: 107 players
Sure, after increasing from just 29 in 1997 to more than 100 in recent years, the pool of international players on NBA rosters was bound to slow down at some point. Still, it’s quickly become a trend that NBA Commissioner Adam Silver would like to correct.
In addition to hosting Basketball Without Borders camps throughout Africa since 2003, the NBA opened an official league office in South Africa in 2010 and built an elite training academy in Senegal in 2017.
In August of last year, Commissioner Adam Silver named investment banker Victor Williams as the new CEO of NBA Africa — working out of Johannesburg — and now, the league has officially launched the long-awaited Basketball Africa League (BAL).
The Basketball Africa League (BAL) is a 12-team professional basketball league in Africa co-operated by the NBA and FIBA, becoming the NBA’s first professional league owned and operated outside the United States.
The league will consist of 12 teams from across Africa — Algeria, Angola, Cameroon, Egypt, Nigeria, Tunisia, and more — with each team qualifying annually through domestic competition, similar to the UEFA Champions League.
The goal is simple: To assist the NBA’s effort in continuing to expand the North American brand globally.
Why? Because outside of the obvious benefits of devoting resources to developing future NBA talent worldwide, Africa has the ability to provide significant economic upside to the NBA in the future.
Here’s what Adam Silver said in 2019 (Source):
“Africa is a huge economic engine,” Silver said, noting that there are 438 companies in Africa that generate more than $1 billion in revenue annually. “And one place, though, where we haven't seen enormous economic growth yet is in the industry of sport. And that's something that we are all particularly focused on.”
As for the demand within Africa, that part is clear. The NBA held its first NBA Africa game in 2015, with games in 2017 and 2018 being played in front of sold-out crowds in South Africa.
Earlier this week, the NBA announced the formation of NBA Africa, a new entity that will oversee the Basketball Africa League (BAL) and be tasked with accelerating growth on the continent.
Investors in the new entity include holding companies like Helios Fairfax Partners and Babatunde Folawiyo and former NBA players Junior Bridgeman, Luol Deng, Grant Hill, Dikembe Mutombo, and Joakim Noah.
The best part? Specific terms of the investment were not made available, but after inking lucrative deals with partners like Pepsi, Nike, and more, Commissioner Adam Silver says that the enterprise value for NBA Africa is already nearly $1 billion.
My guess? With the NBA’s business in China already worth more than $5 billion just a decade after launch, there is no reason why NBA Africa couldn’t see a similar trajectory — especially considering NBA China is state-run, while NBA Africa will be run by the NBA.
Only time will tell, but one thing is certain, growing the game of basketball globally is good for everyone.
Have a great day, and we’ll talk tomorrow.
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