- EuroLeague and IMG’s new joint venture – EuroLeague Ventures – will last until 2025-26
- The league is set to earn about €34m in media rights revenue in 2017-18, up around 50 per cent on 2015-16
- Organisers are looking to grow the EuroLeague in Europe’s major markets, particularly France, Germany and the UK
At a time when everything seems to be changing for EuroLeague Basketball, some things have remained reassuringly familiar since its inaugural season in 2000-01.
Clubs from Mediterranean countries still dominate the competition, having won 14 of the last 17 EuroLeague titles. Basketball’s global governing body, Fiba, continues to operate its own concurrent European competition after losing a power struggle with Europe’s top clubs. Last, but not least, EuroLeague’s twinkly-eyed corporate guardian, Jordi Bertomeu, remains at the helm.
All that has changed, Bertomeu has overseen. Appointed chief executive in 2000 and having held the title of president since 2011, Bertomeu has helped guide EuroLeague from a club-led breakaway competition to its present-day status as one of the latest jewels in IMG’s crown.
EuroLeague and IMG’s new joint venture – EuroLeague Ventures (EV) – will last until 2025-26, when the two sides will decide on whether to activate a further 10-season extension. IMG is investing €630m ($700m) over the first 10 seasons, with revenue over and above this amount split 54/46 in favour of the EuroLeague, in accordance with each party’s share in EV. EV’s initial revenue projection stands at €872m over the first 10 years – a total profit of €242m.
This ambitious projection is largely predicated on one thing. From the 2016-17 season, EuroLeague and IMG have changed the competition to a double round-robin-plus-playoffs format comprised of 16 teams, instead of a group stage/knockout tournament comprised of 24 teams.
The old format, where teams were only guaranteed to play 10 games over the course of a EuroLeague season, limited the earning potential of the competition and its clubs.
“The system is very simple, and in the simple things you sometimes find the solutions,” Bertomeu smiled. Indeed, almost every time the new format is mentioned, Bertomeu smiles as if you’ve asked about his son.
The new format aims to push EuroLeague all the way to the top table by giving broadcasters, sponsors, clubs and fans what they’ve always wanted: greater quality and greater quantity.
Positive results have been immediate. Prior to 2016-17, the EuroLeague earned media-rights fee increases of almost 100 per cent in Greece, over 100 per cent in Israel, and almost 170 per cent in Spain – astonishing results given tough market conditions in each country. EuroLeague is set to earn about €34m in media rights revenue in 2017-18, compared with about €22m in 2015-16.
An emphasis on creating closer partnerships with broadcasters has been key. Before making changes, it consulted its main broadcast investors on what they would like to see from the competition, ensuring the new format would meet their requirements.
“I think when we explained the possibility of offering a competition in which they would be able to have all the teams, they expressed great enthusiasm for this process,” Bertomeu said. “It’s been a dream to have a European league, but it never happened. They realised this time really was something more than a dream.”
As a result, EuroLeague’s Greek rights-holder – pay-television broadcaster Nova – views its increased investment as just that: an investment.
Katerina Kaskanioti, Nova’s platform and content executive director, said: “We extended our deal until 2020, and I hope for many years to come. We trust them as partners and that’s why we said we’re there with them to further support them not just by extending our deal, but by contributing more and investing more into the asset.”
Kaskanioti, like many executives at EuroLeague broadcasters, is delighted with the results. EuroLeague’s May data report says that its cumulative global TV audience has increased by 32 per cent since 2014-15.
“Broadcasters like the product – everyone does. Everyone recognises it’s improved,” says Ioris Francini, co-president of IMG Media.
“We’ve spent time with broadcasters around the world over the past two days [at the Final Four in Istanbul] and there’s been a very spontaneous, unsolicited recognition and appreciation for what’s been done. So, the broadcasters are on board. They were told we were going to do this and they see this has actually materialised.”
Greater emphasis has also been placed on the quality of production, spearheaded by IMG and overseen by veteran EuroLeague executive Andrea Bassani. New specifications and standards have been put in place for broadcasters wishing to continue producing the matches of clubs in that country, with IMG host broadcasting in all other markets.
Improvements include a new action-replay system powered by Hawkeye, an increased number of cameras, and the introduction of uniform graphics across all broadcasts.
For the recent season-ending Final Four in Istanbul, IMG attempted to create what Francini described as “the nirvana of production”, bringing together an all-star production team comprised of directors and camera crew from Modern Times Group in the Baltics and Digiturk in Turkey, with IMG Productions overseeing the operation.
Earning increases from its core Mediterranean markets is a must for IMG, but to reach its lofty projections it must turn doubters into believers. In markets such as France, where clubs remain loyal to Fiba and its Basketball Champions League, its media rights income is under threat. Its current deal with beIN Sports expired at the end of 2016-17 and EuroLeague faces a litmus test of its new product with no local interest to fall back on.
Competitive television markets
One French broadcast executive who asked to remain anonymous told SportBusiness International: “We had discussions with IMG, but we are still talking. That there is no French team is an issue for us.
"Without that, it’s really a problem. I’m interested in making an offer for the competition, but not at the current price. Without a French team, the value is close to zero.”
The ‘recovery’ of French clubs is one of Bertomeu’s top priorities this summer, as exploiting the fruits of developed, competitive television markets will be essential to EuroLeague’s future commercial success. For Bertomeu, the first step is to make EuroLeague’s second-tier competition, the Eurocup, a desirable broadcast product.
Eurocup media rights will be sold centrally from 2017-18 – clubs currently sell rights to their respective home matches on an individual basis. Should EuroLeague be successful in its recovery project, selected French clubs would be invited to participate in the Eurocup, allowing rights to both competitions to be packaged together.
While the broadcast side of EuroLeague’s business could hardly look rosier, sponsorship is still an area of development for IMG. EuroLeague’s current four-tier model – comprising title, global, premium and regional partners – has created ample opportunity to rapidly increase the number of sponsors and its overall income.
Great focus is put on its main title sponsorship with Turkish Airlines. The deal is worth roughly €34m over five seasons and has helped embed EuroLeague as a premium brand in Turkey – a country where basketball’s popularity is on the rise.
But in the age-old struggle between balancing income and providing value to its partners, the competition has perhaps leaned a little too far toward the former. Some clubs are slightly disgruntled at the sheer number of EuroLeague sponsors, as these can overlap and usurp their own deals and activations.
“You can’t change everything at once,” Francini said. “If you try to do too much, you may end up in the wrong place.
"We decided not to change the sponsorship programme particularly as it is and as it was. Going forward, in addition to the digital side, we’ll be looking at the sponsorship programme, the categories and how we tier it.”
In 2015 IMG more than doubled EuroLeague’s income from its betting sponsorship rights by splitting rights by country. EuroLeague formerly had one betting partner, Bwin, but now has separate betting partners in Germany (Tempobet), Greece (Sportingwin), Italy (Betfair), Spain (Betfair) and Turkey (Nesine).
EuroLeague also has deals with two separate sporting equipment providers: Spalding and adidas. Spalding is the official ball and backboard supplier, while adidas has title sponsorship rights for EuroLeague’s U18 Next Generation Tournament.
Adidas’ association with EuroLeague expires at the end of 2017-18, and there are questions over whether the sportswear giant will opt to renew its title sponsorship rights. As a ‘premium’ (read: second-tier) partner, it receives no physical activation rights during games and its visibility as a sponsor at the Final Four in Istanbul was limited.
Despite the somewhat cluttered roster, EuroLeague’s partners believe they are benefitting from the competition’s overall growth, and brand association alone is often enough for lower-tier partners.
“If you want to be in European basketball and connected to the best of the best, it’s EuroLeague. There is no question,” says Jelena Soce, senior sports marketing manager at adidas, which mostly uses its partnership to create campaigns around its individual athletes.
“I think it’s important to be part of EuroLeague in order to do that because not all of the teams are adidas teams. Having the partnership with EuroLeague detaches you from who the team is with. It enables you to promote your own players and your own product.”
As with the Uefa Champions League, participating clubs are central to the prestige of EuroLeague’s brand. EuroLeague has guaranteed the participation of the 11 biggest clubs in Europe – including recognisable cross-sport brands such as Real Madrid, Barcelona, Olympiacos and Fenerbahce – for the next 10 seasons, giving current and potential partners increased confidence in the competition’s future value.
Thanks to the new format, fans and broadcasters are now guaranteed at least two fixtures between each club, providing much sought-after derby games between Spanish, Turkish and Greek clubs, which reap their own rewards as a result.
The average attendance of EuroLeague games rose by 13.2% in 2016-17 compared to the previous season, from 7,550 to 8,544.
As each club was guaranteed to play at least 30 games, the cumulative attendance increase has been exponential.
Bertomeu has been delighted with the clubs’ response to the new joint venture, and their understanding of what they must bring to the table: “They have to behave like their responsibility is to be loyal to the partner [IMG] and help them as much as they can to improve the business. It’s a different perspective.”
2016-17 EuroLeague champions Fenerbahce are one such club that has reaped the benefits and returned them in kind. The club’s attendances have boomed over the last four seasons, and a 30-game EuroLeague regular season has left their fans – perhaps the loudest and most ardent in world basketball – spoiled for choice. Increased attendance has meant greater revenue for the club and an even louder arena, making for a live-event and TV experience unlike anything in world sport.
“We hope to get to a point where we can’t fit anybody in!” says Fenerbahce general manager Maurizio Gherardini. “The numbers in terms of attendance have grown significantly over the past three or four years. That has had a very strong relation to results in the EuroLeague competition.”
On the back of their domestic and European triumphs, Fener signed a sponsorship with Turkish conglomerate Dogus Group worth €15m per season – by far the biggest deal in the club’s history. The new deal will cover half of the club’s annual €30m budget, with direct income from the EuroLeague making up a small fraction of the club’s revenue.
Gherardini added: “Right now, if you take a club like ours, with a budget like ours, the money earned from EuroLeague is not an income that changes the world. It’s something very limited. We need to try and make it more significant to keep working toward the roster, promotion, fan engagement.”
But the impact the new EuroLeague format is having on domestic leagues is a lot less positive, even in countries like Turkey, where basketball is the fastest growing sport in the country.
“What is evident on the other hand is, talking about our fans, they want to watch EuroLeague,” Gherardini said. “They don’t want to watch the domestic league.
"OK, maybe they’ll come for the traditional rivalry games against other Istanbul clubs, but, conceptually, no more than 20 percent of our fans want to watch the domestic league. If 100 is our fan number, 20 will come to a domestic league game. That’s the proportion. All 100 want to watch EuroLeague.”
SportBusiness International requested comment from five major domestic basketball leagues. All either declined to comment or did not respond. Fiba has voiced its concerns over the future of domestic leagues, and how EuroLeague’s expanded schedule could end up consuming their main sources of revenue – media rights and gate receipts.
EuroLeague and IMG insist they have no responsibility to support domestic leagues, many of which they claim are not doing enough to help themselves. Having only just reduced the number of EuroLeague teams from 24 to 16, the success of the 2016-17 season has already brought ‘expansion’ to everyone’s lips.
Both Bertomeu and Francini are looking to grow the EuroLeague in Europe’s major markets, particularly France, Germany and the UK. EuroLeague currently earns less than €2m per season in media rights from these three markets, the bulk of which could be lost after a renewal in France.
An expansion to 18 teams seems likely before the 2018-19 season, and EuroLeague is keen for one club from each of France and Germany to fill these spots. Bertomeu is particularly keen for Bayern Munich to join the competition on a permanent basis.
Image: Jordi Bertomeu is particularly keen for Bayern Munich to join the competition on a permanent basis (Getty Images)
Francini added: “We have great presence around the Mediterranean, but what about more central, northern countries in Europe? What would happen if there was a club or a franchise established in those countries? This is the main goal: a geographical broadening of the EuroLeague footprint.”
After the competition’s likely expansion to 18 teams, preparations for further growth to 20 teams will begin. Both Francini and Bertomeu desperately want a team in the UK to tap into Europe’s most lucrative market, but this will have to be done within the 20-team limit.
Bertomeu believes this is the point where the EuroLeague should be capped, as its schedule would then completely consume domestic leagues and force the non-participation of EuroLeague teams. “Then,” Bertomeu smiles again, “we have some dreams.”
The final destination for the project is a 20-team EuroLeague, a 20-team Eurocup and a promotion/relegation system between the two. The two competitions are currently linked only by the Eurocup winner entering the EuroLeague on a one-season basis, but Bertomeu is keen for this to be expanded.
Teams from France and the UK are likely to begin their participation by playing in the Eurocup, eventually either earning a place in the EuroLeague via promotion or by being awarded a 10-season A-Licence.
But Bertomeu won’t forget the markets upon which the EuroLeague is built, and will underpin the competition’s growth. “In our sport we have some cities we call capitals for basketball.
"So when you are in Belgrade, in Athens, when you are in Kaunas… there are cities where basketball is at the centre of life. Istanbul, in the last couple of years, joined this group of cities,” he says.
Over the next nine seasons EuroLeague is hoping basketball can become a part of life across every major European city.