- HBSE group includes Philadelphia 76ers and the New Jersey Devils
- Acquisition strategy is helping to create new sponsorship opportunities
- International roster of players is helping to build affinity in new markets
It’s the morning after the NBA London Game and Scott O’Neil is shaking off jet lag and the Philadelphia 76ers’ loss to the Boston Celtics the night before. “They’re a good team”, he says, reflecting on the Celtic’s rousing comeback from a 22-point deficit to win the game at the O2 Arena.
The response to the defeat is characteristically upbeat from the chief executive of the Sixer’s parent company Harris Blitzer Sport and Entertainment, and it doesn’t take long for the mood to lighten as he is joined by his senior colleagues at the breakfast table.
“The great Hugh Weber has just joined us,” says O’Neil, goading HBSE’s new president as he strides over. Weber jokingly takes O’Neil to task for not standing up on his arrival before Chris Heck, the Sixers’ president of business operations joins the group having just finished an early morning call. They exchange notes about the game before the waitress arrives and O’Neil continues to tease Weber. “Eggs benedict? This guy is unbelievable,” he says of the HBSE president’s breakfast selection. “Hugh eats like a king over here,” adds Heck conspiratorially.
Looking at the bare statistics there’s no reason why the preceding evening’s loss ought to have dampened their spirits unduly. The 76ers ranked first in the NBA for just about every business growth metric that counts last year despite an underwhelming 28-54 win/loss record. Moreover, losing is easier to accept if it’s seen as part of the famous ‘Process’ whereby the team has decided to suck up the defeats for a few years to stockpile the best draft picks and build a team for the future.
The relaxed bonhomie and the fact that the three executives are conducting the interview together can also be attributed to the formation of Harris Blitzer Sport and Entertainment (HBSE) in September last year.
Where previously O’Neil and Heck had overseen operations at the Sixers and Weber had presided over the fortunes of NHL team the New Jersey Devils, the distant cousins started to work more closely with each other when their common owners, Josh Harris and David Blitzer, brought their sports assets together under the HBSE holding company. O’Neil stepped up to be the chief executive of the new group while Weber slipped into the role of president.
The purpose of the closer alignment is to focus resources more effectively, seek out joint sponsorship opportunities and grow the different HBSE brands internationally. Other properties in the portfolio include the Devil’s Prudential Center arena in New Jersey, the Delaware 87ers, the Binghamton Devils and the Team Dignitas esports franchise. Although Harris and Blitzer also own a stake in English Premier League club Crystal Palace, it is more loosely aligned with these brands and doesn’t fall under the HBSE umbrella.
Heck says the Sixers’ debut in the London game has provided the management team with the perfect opportunity to meet up with some members of the wider family.
“I think London being our first step on the international stage was appropriate because of David Blitzer and his history here,” he says referencing the fact that Blitzer lived in London for ten years while he helped establish the the Blackstone investment group in Europe. “That’s not to mention our cousins down the road at Crystal Palace,” he adds.
O’Neil reveals that the HBSE team met with executives at Crystal Palace the day before to discuss joint opportunities and share ideas before travelling to the NBA game. It’s consistent with the famous culture he embedded at the Sixers to question established thinking and to be open minded about new ways of doing business.
“In our DNA we say we wake up every day ‘palms up’ as opposed to closed,” he says. “We wake up asking ‘what if?’, looking to learn, looking to listen and looking to see what best practices are out there that we may be able to ‘borrow’.”
But he thinks the process of turning the 76ers into a truly international brand started with decisions made closer to home: the fact that the team has a more polyglot roster than at any point in their history is helping to attract new fans and partners.
“Internationally, it seems affinity is built through stars on the court, or at least that’s the tip of the spear where it starts,” he says. “It’s not just Ben Simmons from Australia. Joel Embiid is from Cameroon. Furkan Korkmaz is from Turkey, Dario Šarić is from Croatia. Timothé Luwawu-Cabarrot is from France and so you have five players on this roster with an international flavour, which certainly gives us the opportunity as we look to drive content in multiple languages to expand to other markets.”
Even though it is the Australian Simmons’ first season in the team, he ranks in the NBA’s top 10 for jersey sales and can also take some credit for the team’s first sponsorship deal with an Australian firm: pie maker FourN’ Twenty. The brand wanted an entry into the US market and saw the Sixers, which also boasts ‘Bos-tralian’ Brett Brown as it coach, as the perfect vehicle to do so.
Australian Ben Simmons with NBA commissioner Adam Silver
The lengths the team is going to reach Australian fans, and help its new partner to activate, can be seen in the fact that it will host its first ever Australian Heritage Night on January 24 in Philadelphia. And now that the brand is in the HBSE fold, O’Neil explains that the purpose of the new holding company will be to introduce the sponsor to the other teams in the portfolio and the markets they reach.
“This could truly be an example, a small example, where you have an Australian superstar who leads our incredible sales team to explore opportunities in Australia and find a match,” he says. “And they say let’s expand this to Newark, New jersey and the Prudential Centre and the Devils, let’s expand this to Crystal Palace in South London, let’s take a look at esports and the impact there. That’s like a running example as to why we pull these together.”
Local versus global
Weber describes the creation of HBSE as a ‘reset’ which allowed the sales, finance and marketing teams of each member of the group to be more closely aligned, but he says the merging of resources will not be visible from the outside.
“We see ourselves as HBSE people but to our fans it has to feel hyper-local,” he says. “They don’t see an international conglomerate of people going out and doing all that stuff.”
The team with which Weber is most synonymous, the New Jersey Devils, faced their own local-versus-global dilemma last year when they weighed up the idea of scheduling more of their games in the afternoon to allow audiences in Switzerland to watch their new star-pick Swiss player Nico Hischier. The way the team handled the decision appears to have been vindicated by an increase in local TV ratings of 40 per cent – and by the reaction of local fans.
“Our team is really targeted towards families and so the more afternoon games we have, it’s a positive thing. So, when the opportunity came along to actually tell them the reason we were doing it was because there’s a whole bunch of people in Europe that think that our team is interesting now, that actually made them feel a little bit more like they had affirmation from the outside, that their team was actually relevant.
“I’d say the thing that is consistent about our brands, and each of these teams in the markets that we serve, is everybody’s got a little chip on their shoulder. New Jersey Devils fans? They’ve got a chip on their shoulder. Philadelphia 76ers fans? We’ve got a chip on our shoulder.”
O’Neil adds Crystal Palace and Team Dignitas to this description and suggests that this is exactly the way he likes it.
“You have to work twice as hard, be three times as smart to get half the attention and half the progress, and we’re signing up for it. That’s kind of the way we are and the way we work. I mean, I have a chip on my shoulder.”
HBSE president Hugh Weber with New York Giants Football Player Jason Pierre-Paul at a New Jersey Devils game
He thinks it will be the edgier, unpolished teams and leagues that dominate sport in the future because they will resonate more with Millennial audiences. While it might be stretching it to see the NBA as a snappy underdog or challenger brand, he thinks the league’s leadership on social issues also plays well with this demographic.
“This is a league that took on issues in race relations,” he says. “This is a league that took on the drug issues. It’s a league that took on issues in education. It’s a league that took on stereotypes about those with AIDS – Magic Johnson played after contracting the HIV virus.
“We continue to encourage our players to take real positions on issues that absolutely connect 100 per cent with Millennials, who will be the dominant category in the world for years to come.”
The contrast with the NFL and the way that it has dealt with different political issues in the past year, particularly the take-a-knee protests, feels deliberate. So, does O’Neil feel that the NBA is now in a position to knock American football off its perch?
“I think this is the NBA’s game to win. First off – I’m going to reference China because I have the facts – the Chinese government is building 100,000 courts a year. It’s cheap to play, it’s accessible, anybody with a smart phone can not only follow the game and get to know their stars, but also the highlights are tailor-made for the way we consume media now. So while the NFL has a stronghold in the States, the NBA is the sport on the world stage.”
You won’t hear a bad word for Adam Silver from any of the trio around the table. O’Neil credits the NBA commissioner for his deal making capabilities, and for his ‘incredible relationship’ with the players that has created the ‘labour peace’ necessary to allow the teams to travel to places like London. Heck prefers to see Silver as a sort of Pied Piper figure, leading the teams into new markets.
“We’re happy to have the fate of the league in his hands. He has an outlook on the sport like no other commissioner in the world and if Adam thinks there is an appropriate route on the international landscape, then we’re buying.”
While the UK might not embrace the NBA quite as wholeheartedly as China, O’Neil thinks the London game provides a platform to reach other markets.
“Does this market get lit on fire and everybody’s screaming down the street? No. Is it front page news as it is in other markets? No. But this is the centre of industry and finance and commerce for much of the world,” he says.
“330 million people watched that game and this is an English-speaking country which I think helps in terms of ease and access. It’s a global hub of commerce, [which is] very helpful. The right time zone in an incredibly brilliant facility – the O2 in London – and I think it provides more than a stepping stone.”
Aside from the relationship with Crystal Palace, the Philadelphia 76ers have another stepping stone into the UK market in the shape of Team Dignitas, the UK-based esports team that it acquired in 2016. By buying the team, the Sixers became the first US professional sports team to purchase an esports property.
In keeping with the HBSE ‘palms-open’ philosophy, the team has helped the Sixers learn about the gaming market while the NBA has helped professionalise business operations at the esports franchise and give it some mainstream legitimacy and attention.
“We’ve capitalised on the exposure that the NBA lends itself to with courtside signage, being exposed to television, not to mention the audience,” says Heck. “We even put [the Team Dignitas logo] on the jersey of our G League team, which is our minor league team for the 76ers in Delaware, and we’ve had some fun with that – a lot of cross-promotion on social media.
“Every property has its own merits and they help the other properties and that’s the goal of the big picture. How do we find continuity without being forced?”
In return, Team Dignitas has led the Sixers to sponsors like Buffalo Wild Wings and gaming headset manufacturer HyperX.
Chris Heck and Team Dignitas president Michael O’Dell spoke to SportBusiness at the time of the the acquisition in 2016
NBA 2K League
The acquisition also ought to prove useful now that the NBA is also moving into esports with the creation of the NBA 2K League.
The Sixers are one of seventeen teams from the NBA to pay an estimated $750,000 to play in the league which represents almost a replica version of the traditional NBA. The best NBA 2K players from around the world will be scouted by these teams and represent them in the competition.
Adam Silver thinks the league will provide the NBA with an opportunity to connect with the young and growing esports community and thinks there is significant appetite for the game in China where 34 million registered users play a free version of the game.
More immediately, Heck says the league has furnished his sales team with additional sponsorship inventory that they can sell to the Sixer’s existing partners.
“We’ve exceeded our expectations before we’ve even launched the team, on adding our partners,” he says. “And what we see is the continuity with our NBA 2K team is more aligned with the 76ers team and brand than it is with your typical esports world.”
For this reason, O’Neil likens the new league to a ‘starter kit’ for Team Dignitas sponsors that want to move into more mainstream sports sponsorship.
“You can dip your toe in the water with an esport, and with the NBA, the global power and weight of the NBA behind it. So, for us it’s a wonderful stepping stone for a much larger conversation.”
Data and content
O’Neil says the Sixers will draw on its celebrity fanbase and social media influencers to grow the new league. Once again, engaging content will be the mechanism with which the team breaks new markets.
“You’ll see a pretty dramatic increase in investment in US sports clubs in terms of content. We have eight content people here for this game. That’s a lot,” he says. “What we spend money on is data and content, so building out a data warehouse, understanding the habits, interests, inclinations, buying patterns, of people who touch this brand and then trying to match our content to fit their needs – across different psychographics and demographics and through all distribution channels.”
On this point, Heck says the team’s secondary and primary ticketing relationship with StubHub has proved invaluable in building a clearer understanding of its fanbase.
“Our StubHub relationship is unparalleled with data share. So much so, the data that we were exposed to by StubHub this past year attributed to 40 per cent of our new season ticket members, so the conversion rate, that’s a staggering number.”
As a result, the team has now entered into an agreement with the ticketing company to not only share the data for single game buyers but to offer these purchasers a chance to be on a waiting list for season tickets. Heck explains that the list now includes the names of over 7,000 people.
It’s the sort of innovation that puts the Sixers out on their own, even by the lofty standards of the NBA. So what do the trio think of the commercial acumen of their equivalents in the English Premier League?
“They’re commercial giants. I think we have so much to learn,” says O’Neil. “It is the international expansion through content and events. It is incredible to see the engines they’ve built. If you look at Tom Glick who’s at Manchester City, that is a monster and a machine – they’re doing over $300m of sponsorship per year.”
Weber says he most admires the City’s Group’s global relevance. “The acquisitions are part of that globally relevant strategy, but all of it is wholly interconnected.”
It sounds uncannily similar to the HBSE blueprint outlined by the trio. The question is whether this means more international acquisitions are planned.
“We have a few things that will be announced in the next few months that I’m very excited about,” says O’Neil without being drawn any further. “We’re spending quite a bit of time thinking about who we want to become when we grow up.”