The Rocky Road that is Minor League Basketball

 

(Editor’s Note.  Readers may remember the American Basketball Association (ABA) that operated between 1967 and 1976 before merging with the National Basketball Association (NBA).  The ABA still exists today with some 78 teams operating in divisions scattered across the country.  Today’s ABA has a decidedly different business model than its predecessor.  Dr. Janas is an entrepreneur who has an ownership interest in two minor league teams in the Tobacco Road Basketball League.  One of these teams was formerly affiliated with the ABA.  He writes here about the realities facing anyone trying to field a minor league basketball operation in today’s marketplace).

Minor league basketball by almost any metric or definition has at best had a tumultuous run over the last decade or two.  Teams and leagues seem to come and go faster than turkey legs on Thanksgiving Day.  Two sentences into this article have likely already conjured up thoughts of Will Ferrell in the movie “Semi-Pro.”  The minor leagues in other sports certainly have not been immune to instability either.  Recent events in soccer and arena football come to mind; but several factors seem to work against basketball that make the minor league basketball business particularly volatile.  A few that stand out include:

1.  The National Collegiate Athletic Association (NCAA) is the “de facto” minor league for basketball. It is no secret that many Division 1 players leave college at minimum as valuable, marketable entities, or in many cases as true “superstars.”  Regardless of one’s opinion on the NCAA’s role in this process, the current facts are what they are.

2.  The National Basketball Association (NBA) is quite content with #1.  The NCAA as a “farm league” is incredibly successful, and it costs the NBA essentially nothing.  Who could ask for a better business arrangement?  Yes, the NBA Development League (NBDL) does exist, but the NBA’s support for and interest in that league, at least historically, is questionable.

3.  The barriers to entry to becoming a “professional” basketball or team are low relatively speaking.  Almost anyone with access to a church or high school gymnasium can field a “minor league” basketball team.  Start-up costs are minimal.  Only a small number of players are needed.  Gyms are plentiful.  Contrast that with fielding a hockey, football, lacrosse or even soccer team at any level.

4.  There is little to no cooperation among the dozens of minor leagues in existence today.   That might be an understatement.  Not only do leagues not cooperate, they often try to poach each teams from each other.  New leagues spawn from old leagues after either disgruntled teams decide to leave.  They even try to discredit the other in often very public venues.   The result is a “bad taste” across the board.

5.  The NBA is quite content with #4.  Particularly in the midst of the current NBA lockout, the last thing the NBA wants to see is a high level of organization between any of the independent minor leagues, and the NBA certainly does not want to face another competitor like the American Basketball Association (ABA) of the 1970’s.

6.  There is no meaningful, effective, or organized credentialing process for minor league teams or leagues.  Even the quality of teams within the same league is often very disparate.  It is unlikely that the NBA will try to step in to manage the “single A” and “double A” circuits below the NBDL (the presumed “triple A” league.)  But, there are other groups that conceivably could if incentives were aligned appropriately.

7.  Many minor leagues often try to be something they are not.  For most leagues, “going national” or even thinking about competing with the NBA is not a realistic goal.  Yet, many seem to gravitate there.  The quest to keep adding teams comes at the expense of quality that results in many teams struggling to complete seasons, pay players, make games, or even don professional looking uniforms.

8.  Many minor league teams often are underfunded and have unreasonable expectations regarding revenue generation.  There is no shortage of basketball intellect in the minor leagues.  The truth is that in all of the leagues there are talented players and coaches.  But, there is a shortage of business experience, most particularly sports business experience and training.  Many of the leagues contribute to the problem by overselling the financial benefits of owning a “minor league” basketball team.   The fact is that sponsorship dollars across the board have dwindled in sports, and ticket sales in the minors cannot support a team alone.  That is not to say that there are not opportunities available to be exploited.  However, this author cannot identify a single minor league basketball organization that has been a financial success. That does not mean that these organizations cannot be or have not been successful in other, perhaps even more meaningful ways, but make no bones about it:  these teams are not thriving business entities.

9.  Many minor teams play or try to play too many games and travel too far to play them.  The quickest way to destroy the ROI of a minor league basketball team is to start putting the team on airplanes or 12-hour bus trips.  The numbers just do not add up.

10. Competition for the sports entertainment dollar is at an all-time high.  Minor league basketball teams face this competition around every bend from high school sports, college sports, soccer, hockey, lacrosse, baseball, football, action sports, and even mixed martial arts (MMA).   The good news is that the competitors have some success stories from which minor league basketball can take a few lessons.

There are a host of potential answers and solutions to the issues and problems outlined above.  Discussing them all would require a lengthy forum, on the order of a master’s thesis.  However, all of them do boil down to making sure interests and incentives are aligned between key stakeholders.  Until then, the survival of independent minor league basketball will depend on a handful of die-hards who will move forward despite the current climate, based on the mere love of the game.

Dr. Mark Janas is the Managing Partner and CEO of In3, Inc. a technology and business development firm based in Raleigh, NC with holdings in multiple minor league basketball teams and sport-related businesses including ScoreTrax.com. He received his doctorate in sports management from the United States Sports Academy.  Anyone interested in graduate programs at the Academy should go to http://ussa.edu.

 

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