The House View – The NBA continue to smash it in tech

The NBA are smashing it in tech, so why are they so far ahead of their peers?

We all saw the amazing launch of the NBA avatar at last week’s Tech Summit. It did look incredible.

I’m sure Adam Silver’s video took hours of production and it’s far from clear what the UX would be but let’s assume it becomes manageable. The ability to watch a live match with friends and insert yourselves into the game is extraordinary. And one that people will willingly pay for.

I want to explore why the NBA is, externally facing anyway, seemingly so smart with their D2C tech offering and I spoke to various rights holders and NBA employees to get their view

The background to this must start by understanding that the holy grail for anyone that owns an audience is around the digital monetisation of that audience. Multiple commentators explain the high prices for recent purchases such as Chelsea and the possible Man Utd sale as a digital opportunity. They will say that if the brand has a supposed 500m global fans and current turnover is $500m (representing $1 per fan income) then surely finding ways through technology to add $1 per fan will be transformational. I appreciate the numbers are rather basic but the belief is that it can’t be hard to do as the opportunities will be forthcoming as technology develops – think web3, NFTs and the use of blockchain etc. The tech, whatever it ends up being, can only enhance the opportunity and we know the tech is advancing fast.

So, back to the NBA. Why do they seem to be so progressive? Why did FAST Company, a couple of years ago, have the NBA at No3 in their Innovative List ahead of SpaceX? The latter build and send rockets to the moon and the NBA plays a game? That seems barely credible. The NBA is regularly ranked as top of the pack among sports innovators. Here are my thoughts with some added contributions

· Leadership

All sports need a point of differentiation and the NBA has been very quick to use tech to advance this differentiation. This is a leadership stance. Well done, Adam Silver.

The NBA commits more resource to the tech space. Do they really? I can’t find a way to measure this except anecdotal comments from NBA employees who certainly felt that there was a concerted push around finding the next technology.

· The sport itself

Basketball as a sport has always played the crossover between music, fashion and sport very well. It’s your trendy friend rather than your reliable mate that is the NFL for example. No knocking the NFL but one person I spoke to did say, “Hell, the NFL still measure 10yds with a chain”. Reliable, solid, but not cool. Sponsors love aligning with the latest trends and storytelling and the NBA fits that bill perfectly

This tech reputation has meant that when companies like SNAP and Meta want to trial new products the NBA is seen as the ideal testing platform. This then becomes a virtuous circle

· Rival sports/Sponsors

I have arbitrarily chosen the EPL, NFL and IPL as major rivals. The general feel from their people is that the NBA needs to be progressive because their biggest local ‘rival’ is the NFL, which is so dominant at extracting media, advertising and sponsorship $$s. And the NFL is progressive too. They have already sold in excess of $50m skins in Fortnite. Yes, they are the reliable old friend but they not standing still either.

As I mentioned previously the NBA has positioned itself as being very fashionable and this sits well with the high roster of tech partners who all want to be associated with a very progressive platform – Google, SAP, ServiceNow, Microsoft, Rakuten and Sportradar.

Of the rival leagues, the NFL has Verizon, Microsoft, Extreme Networks, Zebra Technologies, Intel and Amazon Web Services but their partnerships appear less futuristic. In tech, the EPL can only really boast Oracle and the IPL has Tata group. Neither would be considered advanced in their tech positioning yet. The NBA have deliberately embraced this tech space more boldly than their rivals.

·Owners/Athletes

The NBA have team owners like Mark Cuban, Joseph Tsao, Steve Ballmer and Ted Leonsis, who are super tech savvy and when we interviewed Ted a year or so ago he was very clear that he loved the NBA as they were ‘curious about tech’

 The NBA are also prolific in taking stakes in tech companies and helping them grow. They aren’t the only ones but seem to be very progressive with this model. It’s not about $$ today but building for the future. Easy to talk about but needs good leadership to happen.

Look at how many basketball athletes are serial entrepreneurs from Michael Jordan to LeBron James. These athletes have built empires and tech has played a major role in their investments. Again basketball and tech have become solid bedfellows.

Back to the starting point of digitally monetising global audiences. The new ‘avatar’ tech will bring revenues. How much we don’t know yet and that will depend on the UX, but additional to inserting yourself into live matches there should be an opportunity to insert yourself into an archive game and be the one to score the winning point, run, try, goal, touchdown. I’ll pay for that.

Suddenly the ability to extract money from fans with a genuinely relevant product becomes real. The Chelsea/Man Utd valuation theme makes me think that any club/league/federation that has a large global audience will be able to make serious commercial inroads within a few years to transform their business model. The NBA has now found the ‘avatar’ route and they will find other new ones. Personally I believe the application of web3 technology will be where the monetisation really takes off so it’s an exciting space to be part of.

By Sandy Case, CEO of iSportConnect, if you would like to get in contact about this article or anything else feel free to email me on sandy@isportconnect.com