By Charles Baker and Mimi Hunter, DLA Piper
With three of the four major US sports leagues dealing with significant labor disputes over the past year that threatened each league’s ability to put their best (or any) product on the field, coupled with a recessionary economy in which many fans have less money to spend attending games and following their favorite teams, it is an interesting sports business climate in which to evaluate the status and future potential of other, lesser known leagues.
National Basketball Association Development League (D-League)
The D-League was established in 2001 and is often considered a potent testing ground for the NBA to experiment with both rule changes and marketing strategies. Recently, the D-League has experienced some development in its own right, indicating interesting potential for future sustainability and growth.
Stronger 1 on 1 Affiliations with NBA Teams:
The NBA D-League is currently made up of 16 teams, 11 of which have single affiliation deals with NBA teams, which is the highest number of single affiliations since the D-League began, and includes 5 teams that are fully owned and operated by their NBA affiliates. This stronger connection to the NBA has proven to promote more fluidity between the NBA and the D-League, with NBA teams making more use of their affiliates in creating greater visibility and possibly fan interest in the D-League. For example, Amare’ Stoudamire, a high profile player, was recently sent to the New York Knicks’ D-League affiliate, the Erie Bay Hawks, as he returns and rehabs from an early season injury.
The D-League has also made some rule changes that appear to create stronger NBA team affiliations. Prior to this season, D-League rosters were partially assembled by allocating players with local significance to local D-League teams. Now, an NBA team can allocate up to three players cut from their roster prior to the D-League draft to that NBA team’s D-League affiliate. The creation of a stronger NBA presence and potential for the D-League to grow as more than an incubator for NBA talent has not gone unnoticed.
Increased Exposure / Marketing:
In November, the D-League and Google announced that Google will pay a rights fee to the D-League to stream live games on YouTube. The fee is estimated to be in the low six figures and allows YouTube to show 350 games this season. This will be the first professional sports league to use YouTube as its primary broadcaster and is the biggest live professional sports deal for YouTube.
The D-League has also shown an interest in promoting its teams in other countries. The Texas Legends have partnered with the State of Veracruz, Mexico so that Veracruz now has its logo and slogan on the front of the Legends’ jerseys, naming rights for the basketball court at Dr. Pepper Arena, other in arena signage and some television exposure. This partnership is unique in that an entity is sponsoring a team that plays in a different locale and in its international partnership.
The recent growth of the D-League makes it an interesting league for potential partners and fans to keep an eye on in the upcoming year and future seasons to come.
United States Soccer Federation — National Women’s Soccer League
Another league that will be interesting to watch in the new year is the recently named National Women’s Soccer League (NWSL), which also recently released its logo. The NWSL is a newly-formed women’s professional soccer league that is being promoted and subsidized by the United States Soccer Federation (USSF), the Canadian Soccer Association and the Mexican Football League. USSF announced the establishment of an 8 team league to begin play in the Spring of 2013. Teams are gearing up now by revealing team names and acquiring stadium usage in Boston, Chicago, Kansas City, Western New York, New Jersey, Portland, Seattle and Washington, D.C. A lot of interested parties are cautiously waiting to see how this new league fares given that it is the third attempt to create a women’s professional soccer league in the United States.
The first attempt was the Women’s United Soccer Association, which was established in 2000 after the US women’s team’s success in the 1999 World Cup, but only lasted 3 seasons. The next attempt also only lasted 3 seasons when Women’s Professional Soccer suspended its operations in 2011 and cancelled its 2012 season.
Advocates of the NWSL point to USSF’s sustainability focus as one of the aspects that separates this league from previous ones. USSF is putting up funds to subsidize the front office costs of the 8 teams as well as the salaries for 24 of the U.S. Women’s National Team players to participate in the new league. The Canadian Soccer Association is also subsidizing the salaries of 16 of its players and the Mexican Football League is doing the same for 12 of its players. Advocates and skeptics have both pointed to the gestation period that Major League Soccer (MLS) has had in the United States, with advocates calling out the recent success in attendance and popularity in certain markets and skeptics pointing to the length of time it took for MLS to get to its current level of success. Given recent MLS announcements, including ticket sales increases, sponsorship growth, new television deals, the number of soccer specific stadiums throughout the US and Canada, the investment by private equity in Soccer United Marketing and the proposed establishment of a New York franchise, most believe the league is poised for continued and sustainable success. However, the Women’s National Basketball Association has also been a comparison for both critics and supporters of the NWSL, as a women’s league that is not yet considered a flourishing one, but also that has been able to maintain its product for a significant time.
In the new year, these two leagues pose significant opportunities for growth and for the sports business community to keep a keen eye on.
Charles Baker is a partner with DLA Piper’s Global Sports, Media and Entertainment practice in New York, and Mimi Hunter is an associate with the firm’s Corporate and Securities group in Seattle.
