Many clubs and leagues are managed as a sports club rather than a sports business organization, which puts the financial sustainability of many sports organizations in danger. Leaders of sports organizations need to analyze their current business model and adjust it to make sure they will be financially stable in the long run. On June 17th, at our online Meetup entitled Basketball Innovation with Euroleague Basketball and FC. Bayern Munich, we hosted Luca Scafati, Director of Business Operations at Euroleague Basketball, and Adrian Sarmiento, Chief Business Officer at FC. Bayern Munich Basketball who shared the different innovative initiatives within their respective organizations.
In 2017, Euroleague Basketball created Business Operation Clubs Services (BOCS), an in-house consulting program with the aim of aligning the business growth of the league with the ones from the clubs.
¨This division was created to help the clubs increase their revenue generation in all their business verticals, promote the Euroleague Basketball brand as standing for innovation, and to create a platform for the clubs to adapt to a business culture anchored by information sharing and transparency, building trust between the league and its clubs.¨
BOCS was created for the clubs and with the clubs and many different initiatives were launched within this new division. Through BOCS, the Board of Chief Business Officers was created to share best practices between the teams to make the common product, the sport of Basketball, as attractive as possible.
¨Having a platform to share best practices to help the sport of basketball develop is the common goal that we all want to achieve.¨ – Adrian Sarmiento
For each club to have a better understanding of how they are performing off the court, Euroleague Basketball created the BOCS reporting HUB, a collection of business performance indicators across every business vertical where the clubs can see all the information and how well they are ranked.
¨The BOCS reporting HUB was created to rank each club based on how they perform on the business side, to motivate those clubs who are in the bottom to perform better and to reward the ones who are doing great.¨ – Luca Scafati
Fragmentation of the revenue streams
Not every Euroleague Basketball club has the same structure and they all operate in a different market. Some teams have a big percentage of revenue coming from ticketing and hospitality, so situations like COVID-19 threaten the financial viability of the club. Unlike many different teams in the European context, FC Bayern Munich’s football and basketball teams act independently, where the basketball team is an actual company rather than a section. Adrian highlighted the importance of diversifying their revenue streams, and not only leaning on one of them.
¨The evolution of each club is very different but we are trying to align everyone with the league by adapting guidelines and rules in order to make sure that each club has the opportunity to become financially sustainable.¨ – Luca Scafati
Data and digital, part of the process
The sports industry is a fast-moving business and the digital era is accelerating this even more rapidly. Digital transformation allows for every aspect of the business to be data-driven and to unlock potential growth as well as reduce costs.
¨All the processes around the product and services are becoming more digital and effective, which translates into a cost reduction.¨
FC Bayern Munich will move into a new arena in the next couple of years, they are moving from the Audi Dome, to the SAP Garden Munich, a more sophisticated, newer and bigger arena.
¨We are constantly improving and innovating to offer a better product and services, and right now our focus is on improving the WIFI infrastructure, the whole digital experience, and upscale our digital products inside the arena.¨ – Adrian Sarmiento
In order to support projects like the one that FC Bayern is implementing, Euroleague Basketball created the Digital Transformation Fund, a fund for the clubs to help them improve their digital readiness, align objectives for the future, to make smarter decisions, and unlock the monetization of the clubs.
¨We partnered with N3XT Sports to help us and the clubs understand their needs in order to improve on the digital side.¨ – Luca Scafati
There are numerous ways to make operations run more efficiently, without risking existing workflows. In a constantly changing environment, digital cannot be seen as a support mechanism or a nice-to-have; it is a critical foundation for the modern sports organization.
Growth markets
Euroleague Basketball is constantly conducting market research to understand where there is potential for the league and commercial partners. Some of the growth markets for Euroleague Basketball are Germany, France, and the UK, among others.
FC Bayern Munich decided to have a basketball team because the culture of the sport is strongly linked with lifestyle, fashion, music, and urban settings. It’s a sport that focuses on younger generations such as millennials and Gen Z, which is a very different profile compared to the typical sports fan.
¨The younger generation are more brand-oriented, experience-oriented, and much more flexible when it comes to making decisions such as buying product.¨ – Adrian Sarmiento
There are new opportunities for forward-thinking organizations to accelerate the development of new partnerships, access new or adjacent markets, and set up new businesses or revenue streams.
Digital and data play a big role when it comes to understanding your fan base, and your demographics. There are many innovative solutions out there but in order to implement them, there has to be a process in place and that’s when we, as a company, can come in and help you with it. Do not hesitate to contact our colleague Javier at javier@n3xtsports.com to know more about how we can help you and your organization with your innovation strategy.
If you were not able to make it to our online session, you can watch it here, also we would like to invite you to subscribe to our newsletter, and follow us on Linkedin, Twitter, and Facebook to stay up to date with any N3XT Sports news.