NBA lures players and investors to form Africa business entity

Benjamin Chukwukelo Uzoh 2nd R of Rivers Hoopers of Nigeria competes with Wilson Nshobozwa of Patriots Rwanda during the opening game of the first Africa League BAL basketball in Kigali, capital of Rwanda, on May 16, 2021.

Cyril Ndegeya | Xinhua News Agency | Getty Images

The National Basketball Association started its business in Africa, attracting investors and former players, including Dikembe Mutombo, Grant Hill and Junior Bridgeman.

The NBA Africa will oversee the league’s business across the continent, including the operation of the Basketball Africa League, which launched on May 16. The company will enter into corporate partnerships, expand content and media rights, and support local governments looking to build new basketball arenas. The NBA stipulates that basketball will be a top sport across Africa in 10 years.

Specific terms for investing in NBA Africa have not been provided, but NBA Commissioner Adam Silver said in a press conference Monday that the enterprise value for NBA Africa is nearly $ 1 billion.

The Nigeria-based industrial conglomerate Yinka Folawiyo Group and Helios Fairfax Partners Corporation, an investment holding company that trades on the Toronto Stock Exchange under the ticker symbol “HFPC”, are investors in NBA Africa. Former NBA players Luol Deng and Joakim Noah are also investors.

Mark Tatum, Chief Operating Officer of Silver and NBA, will have seats on the board of NBA Africa and will join Babatunde Folawiyo (CEO of Yinka Folawiyo) and Tope Lawani (co-CEO of Helios Fairfax). NBA Africa is led by CEO Victor Williams.

Speaking to reporters, Williams said part of NBA Africa’s strategy is to “accelerate the development of the basketball ecosystem” by creating more youth academies to serve as avenues for talent and strengthen the NBA’s brand.

“This growth is being brought to life by, among other things, expanding the NBA’s presence in Africa and opening additional offices in priority markets across the continent, starting in countries like Nigeria that already have a strong affinity for the game,” said Williams .

The NBA’s business in Africa is similar to the NBA’s business in China, which has grown to over $ 5 billion. It was launched in 2008 with a $ 253 million investment from partners like Disney. NBA China gave the league better access to the country’s top market as China has 1.3 billion inhabitants.

“There are some structural similarities in that we’ve broken a geographic area into a stand-alone entity and added strategic partners as we see that was the best opportunity for growth,” said Silver when he compared NBA Africa to its China -Business was asked. “But I think the comparison probably ends there.”

Another major difference is that the NBA now operates a league in Africa while the Chinese Basketball Federation is state-run. However, the NBA’s business relationship with China remains strained following a 2019 tweet by then Houston Rockets General Manager Daryl Morey.

CCTV, the state broadcaster, has not yet broadcast any games for the 2020-21 season after briefly returning NBA games during the 2020 NBA Finals. Last year’s finals featured the Los Angeles Lakers, a popular team in the country. NBA games can be streamed due to Tencent’s $ 1.5 billion deal. And tensions between the US and China are not making it easier to do business in the country.

Away team Dikembe Mutombo # 55 poses for a photo during the NBA Cares Special Olympics Unified Game as part of the 2020 NBA All-Star Weekend on February 14, 2020 at Wintrust Arena in Chicago, Illinois.

Jeff Haynes | National Basketball Association | Getty Images

Still, the NBA continues to watch more global markets, and Africa is one of the fastest growing markets in the world, with a population of approximately 1.07 billion (sub-Saharan), according to the United Nations. The NBA opened its African headquarters in Johannesburg in 2010.

Again, a large part of this business will be BAL’s growth. The league consists of two conferences, 12 teams, and the top six clubs will compete in an individual elimination tournament after the season to determine the champion. Amadou Gallo Fall is president of the league.

Speaking to CNBC about the league, NBA team owner Robert Sarver said BAL can be used as a pipeline to increase basketball talent in the hopes that some players will play in the NBA. And when teams play in selected areas, this also helps with scouting. Currently 55 players from the continent or with African roots (parents are native) play in the NBA.

“From a talent perspective, one of the challenges in Africa is that the continent is very large and widespread,” said Sarver, who owns the Phoenix Suns. “Unlike the US, where the best young players, no matter what state you live in, get together and compete a lot, it’s difficult in Africa.

“When you bring them together to compete, you can really improve their game,” he added. “So I think developing talent is one of the goals, but also just opening up a huge continent for more people to see the NBA.”

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