ACB League’s management model under debate – Part II

Johan Cruyff Institute organized a round table with the president of Divina Seguros Joventut, Juanan Morales, the president of MoraBanc Andorra, Gorka Aixàs, and the executive adviser of Baxi Manresa, Marc Bernadich, to analyze and discuss the management model of the ACB League, immersed in an acclaimed change of direction with the new presidency of Antonio Martín

We continue analyzing the ACB League’s management model. Access the PART I of the article through this link.

This July, it will be a year since the clubs of the Liga Endesa (Spanish basketball league) decided to make a change of direction and put their future in the hands of one of their own. Antonio Martín became, in a unanimous vote of the 18 clubs of the Spanish basketball league, the first professional former player to accede to the position of president of the ACB (the Spanish Association of Basketball Clubs) in its 36 years of history. It was a clear request for a change of course aimed at regaining interest in a league that had its peak years in the ‘90s, when basketball was clearly the second most followed sport in Spain, after football.

Spanish basketball has been stuck for too long in a state of instability and loss of strength, as result of the clubs not working together as one and the impact of other competitions such as the NBA or the Euroleague, and of the good work of other sports that have earned themselves a good market share, such as Formula One or tennis.

At a round table organized exclusively for the students of its different academic programs in sport management, sport marketing and sponsorship and football business, Johan Cruyff Institute brought together three representatives of historical clubs of the ACB League. The proposal was to analyze and discuss the current situation of Spanish basketball, what was done well in the past, what has been left aside along the way and where the competition should be headed. In short, how to work on a management model that is compatible with the reality of all the clubs and incorporates the values and identity of all of them so that the ACB League continues to be recognized as the strongest European competition.

Our guests were: Juanan Morales, president of Divina Seguros Joventut; Gorka Aixàs, president of MoraBanc Andorra; and Marc Bernadich, executive adviser to Baxi Manresa.

In the first part of this post, we analyzed its management model, diverse realities and the values that identify them. We now take a deep look at the elements that have been weakening the competition over the last 20 years.

Causes of the ACB League crisis

Juanan Morales: “Twenty years ago basketball was at its peak in terms of support, matches were broadcast on national and regional television, and it was very easy to find ACB basketball in the media. Now all the ‘premium’ sports content is on pay television. In addition, just when the ACB was experiencing its emergence and even football began to think that basketball was acquiring a lot of strength, the NBA phenomenon began in Europe, thanks to television, with resources that the ACB has never had at its disposal and, I believe, never will have. Imagine if a Professional Football League in the US stole the 150 best European players. What would happen to LaLiga if Messi, Suárez, Piqué, Busquets, etc, all disappeared? And that is the reality: any player, not only from the ACB but also at European level, goes to the US with totally unmatchable offers. And, if you add this to the competition from a Euroleague that in the end what it has done is to copy the model that led to the success of the ACB (18 teams, two-leg fixtures, playoffs and also a final four), the resources of the main professional basketball competition in Europe, which is the ACB, decrease and we find a really difficult environment. And that, added to the football boom and the boom in resources that have gone to football in exchange for television rights contracts, the ecosystem in which ACB basketball moves has become much more complicated. Apart, of course, from the internal errors.”

“What would happen to LaLiga if Messi, Suárez, Piqué, Busquets, etc., all disappeared? Any player, not only from the ACB but also at European level, goes to the NBA with completely unmatchable offers ” – Juanan Morales

Gorka Aixàs: “I would add even more factors. It has hurt us to have a closed competition for many years. Not everything is exportable. The NBA is a franchise model, in which the teams are always the same and if a new franchise appears, through having a viable and assumable business model, it joins and leaves based on that business model. But not everything is exportable and we, by culture, are not like that, we live for the drama. If we do not know if we are going to win, lose, or go down, and if, moreover, that does not happen at the last minute, we do not see that content. That created a disinterest in the competition. That has been corrected because the ACB has gone back to having more acceptable entry conditions, there is drama again and we already like that. Now we should solve what happens above; in European competition, it is not only those who win a place through sporting merit that get to play, there are some who always play. And this does not create interest, the normal thing is to have a prize. Today, 12 ACB League teams play in European competition and this has lost a lot of glamor. Before, playing in Europe was an important prize and few did it. That’s a handicap for our competition, not only do we have to open it up at the bottom, but the competition must also be open at the top to create this sporting interest.”

“It has hurt us to have a closed competition for many years; the NBA is a franchise model, but not everything is exportable” – Gorka Aixàs

Marc Bernadich: “I agree that the ‘90s was basketball’s most spectacular decade; Joventut won the Euroleague, Manresa were both League and Cup champions, it was a much more open competition and different teams could win. But the money from football began to come into basketball and only FC Barcelona and Real Madrid began to win. Many small cities with more modest clubs became deflated because, however well they did things, there was little they could do to change the situation. Football is a huge predator, it eats everything. To alleviate this, it must be an open league to benefit the global product. I think that in a few years we will see a restructuring of our ACB League.”

“The ACB League must be an open league to benefit the global product” – Marc Bernadich

Access to European competition

Gorka Aixàs: “I think access to European competitions will also change. It will take more time, but the big clubs with big budgets will also understand that the Euroleague lives from a model that is not their own and must live with domestic competitions that, as in the case of the ACB League, are at the highest level, and international windows, which makes up a virtually impossible calendar. That does not happen in other countries.”

Juanan Morales: “The proof that the Euroleague model is not sustainable over time is that it is based on patrons who invest a lot of money on the teams in sunk costs. In the case of Spain, we have Barça and Real Madrid, Baskonia, whose owner also owns Alavés, and to a lesser extent, Gran Canaria, with the city council; the Russian or Turkish teams that compete are there because they have millionaires backing them. It is not a self-sufficient model. And another proof that you have to open everything up is that the most successful product of the ACB League is the Copa del Rey. It is a knock-out competition that the teams have to qualify for, with the exception of the host team, and it is exciting because you do not know what can happen in just one match. It has a lot of appeal, that weekend we talk about ACB basketball in all the media and just the fact of being in that competition is a success. If the access to European competitions was just as fair, it would be much more attractive and the drama, as Gorka said, would be assured because you do not know who will win, anything can happen.”

“The proof that the Euroleague model is not sustainable over time is that it is based on patrons who invest a lot of money on the teams in sunk costs” – Juanan Morales

Unanimity in favor of pay-TV basketball

Juanan Morales: “When basketball was broadcast live on TVE, the ACB clubs did not have income from television rights. And they only showed one or two games, so the vast majority of matches were not shown. We as clubs have assigned to the ACB, as organizer of the competition, the television rights, the naming rights of the League, of official sponsors, etc. The ACB receives this income, deducts its expenses and the rest it distributes among the clubs in a fairly equal way. It is what we call ‘ACB distribution’, most of which corresponds to television rights. The only viable economic model for all the clubs is to sell the rights together. That is key.”

“The only viable economic model for all the clubs is to sell the rights together. That is key” – Juanan Morales

Gorka Aixàs: “With the new contract with Movistar, we understand that consumption habits have nothing to do with it. Many people no longer watch sports matches sitting on the sofa and at the time they are played; many do not even see whole matches. Now we consume summaries, highlights, best baskets, ends of games. These consumption habits are changing and the type of media platform where we consume them, too. In the next three years of the pay-television model with Movistar, we will be able to better interpret the current sport consumption habits and be able to adapt to them. I think the pay-TV model is inevitable. In our case, income from television rights is a very important part of the club’s budget. In addition, it is a window that we are all in. In a free television model, not all the teams that are in competition would be in this window. We are lucky to be in a competition with Barça and Real Madrid and it is an advantage; having two football giants in the ACB League gives you the possibility to get a television contract that, without them, we would certainly not have. If we were on TVE (Spain’s state broadcaster), surely an Andorra-Manresa would not be on the schedule. And this window, although it’s small, I need it because my local sponsors also want to appear on television.”

“The pay-TV model is inevitable, it is a window we all are in and I need it because my local sponsors also want to appear on television” – Gorka Aixàs

Marc Bernadich: “For Manresa, the television rights are a key item, more than 30% of the club’s budget, because it is surely more than we would get otherwise. It is a good distribution and a great enticement for our sponsors because it means being among the big clubs.”

“For Manresa, the television rights are a key item, more than 30% of the club’s budget” – Marc Bernadich
ACB League’s management model under debate – Part II

Juanan Morales (President of Divina Seguros Joventut), Gorka Aixàs (President of MoraBanc Andorra), and Marc Bernadich (Executive adviser of Baxi Manresa).

Competition from NBA basketball

Marc Bernadich: “We are clearly a market for acquiring talent. When I see that five or six scouts from the NBA come to Manresa, I can’t imagine how many go to a club like Joventut. The problem is not that they can pay much more money, but that there are young players whose big hope is to play in the NBA. Before, that was not the case. For us, it is vital to inculcate in young players that what they can do here is important as well, even while there are scouts in my arena on a Sunday morning because they have heard of a talented 14-year-old kid.”

“We are clearly a market for acquiring talent; there are young players whose big hope is to play in the NBA; it was not like that before”- Marc Bernadich

Juanan Morales: “There is one thing we must learn, not only from the NBA, but from the Americans and from show business—they tell you the perfect story. Sport in the United States is conceived as a spectacle and in Europe it is conceived as a passion. Therefore, there are parts of the NBA model that we should learn from, especially how they sell the product. But being clear that our product is basketball, sport, competition and passion. And when it comes to selling the ACB League, what I would emphasize is that what happens here is what really happens every weekend and there is always something at stake. That makes it different.”

“There is one thing we must learn, not only from the NBA, but from the Americans and from show business—they tell you the perfect story. But in the ACB, there is always something at stake. That’s something different” – Juanan Morales

Gorka Aixàs: “The problem is that the players buy the NBA model in general and, if they are young and not very well advised, they are in too much of a hurry, they race through stages too fast. It is true that an athlete’s life is short and it seems that it will end tomorrow, but I refer to the facts: there are not so many European players who are triumphing in the NBA. They earn a lot of money, but many European players are fill-ins and have not excelled here either. They have not been decisive in their teams in Europe, they have not won titles, and these are steps that have to be taken in a proper sport training.”

“The problem is that the players buy the NBA model in general and, if they are young and not very well advised, they are in too much of a hurry, they race through stages too fast” – Gorka Aixàs

 

Access the PART I of the article through this link.

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