Foreign professionals are increasingly recruited into NBA to play in the league together with local professionals. According to Grothuis, Hill & Perry (2005) since US Dream Team won gold medal in Barcelona 1992 Olympic, global popularity of basketball sport has been surged tremendously. Surprisingly USA team did only manage to win bronze in 2004 Athens Olympic and this trend already highlighted the development and improvement of this sport in a lot of other competing nations. NBA is recently constantly looking for foreign talent to maintain it popularity and there are many important factors to look for when doing global recruitment. Looking into external factors that will be significantly impacting the recruitment of foreign based player to American based professional basketball league or NBA can be further deeply analyzed through PEST analysis. PEST analysis which is frequently used in the market research and strategy analysis is actually a short form that stands for Political, Economic, Social-Cultural and Technological which describes a framework of macro environment factors used in environmental scanning. PEST analysis is a complement of SWOT analysis which focus on the external opportunities and threat that will affect the organization of study. In this analysis only three (3) significant factors will be touched which are legal-political, cultural and economic factors.
From all the factors mention in the Diagram 1 below, legal-political factors is the most important thing where it first and foremost sets the possibility of enabling foreign based player entry into United States. All foreign professional players must abide to the legal entry requirement set by the government of United States of America. Compare to other countries, United States actually has a very flexible working entry requirement which value based on the immigrants or inbound workers’ working expertise, income level and experience in certain required fields. H-1B Visa is actually release to those working professionals in United States which is not an immigrant. All incoming working professionals must abide by the rule and criteria set by Department of Homeland Security before being able to be granted for the working visa.
Beside this normal legal entry requirement, ordinary working professionals must also abide by other rules and regulations either set by the government, NBA or the sports regulating body if he wants to work in league. For examples there are age requirement set up in CBA to restrict foreign recruitment to only those who are 19 years of age during the calendar year (2006). This legal requirement may deprive of NBA a lot of young potentials who are capable and professional enough to compete in that professional league but are constrained by their age. However with recent surge of popularity among foreign countries in NBA, many legal requirements have been relaxed to cater influx of foreign based players especially from Eastern European and Asian countries. This is same as the influx of East Asian player in English Premier League (EPL) notable club such as Manchester United and Everton recently which is actually efforts to woo Asian’s market of commercial televised broadcasting market and merchandising.
Entry requirements also affected by political or US bound foreign workers’ government diplomatic relationship with Unites States. With tighten entry requirement due to security threat by global terrorist set by Department of Homeland Security, there are some countries that may not be on generous list of acceptance by United States government. These countries such as Serbia, Albania, African nations and East European countries may have a lot of professional, talented and capable basketball players but tighten law may invalidate or slower the process of their entry into NBA. When recruiting foreign player, as an NBA team manager, we must know which country having diplomatic relationship with USA government and which is not because it will affect the smoothness of player transfer process. Countries that have virtually poor or no relationship with USA such as Cuba, North Korea and Iran will not be able to export its players to NBA.
The management of NBA is dictated by and follows the guidelines set under Collective Bargaining Agreement (CBA) as agreed by NBA owners and also NBA Players Association which is representing all the players. NBA and all the players must follow the rules that agreed collectively in term of team overall salary limit, players’ minimum and maximum salary, age limit to be drafted, discipline, retirement, buy out, training camp, moratorium period, trade rules, roster and etc.
Major differences of understanding on the rules and regulations of the sports between NBA and the players from all over the world is also one of the significant issues surrounding the leagues. Players recruited from all over the world are accustomed to the sports rules and regulations by FIBA, the sports regulatory body for basketball. Player recruited from other part of the world may not be familiar with the differences of the sports rules and regulations in United States but they have to adapt to it in order to play in NBA. Some aspect of comparison shown that there are variance in term of scoring line, restricted area, playing time, shot clock, possession, substitution, fouls, injury time and etc. NBA must also follow up on the trend with FIBA to know any major changes to the sports as it will also affect American based players when they compete internationally in other world competition or league.
Second macro environments factors to consider are the economic factors. NBA and foreign players must be aware of taxation structure in United States before working here. US taxation structure is very complex systems where there are federal, state and municipality level taxation for taxable residents. For resident aliens who are a green card holder or have substantial presence in the United States, they are automatically a tax resident of United States and are taxed regularly same as a US citizens. Meaning of substantial presence as according to IRS is those working aliens must be present for 183 days on the current year or 31 days during current year plus 1/3 of total days present in preceding year and 1/6 of total days present in the second preceding years. For non-resident alien or NRA they are subject to regular US resident tax for the income they earn in United States and 30% flat rate for income generated outside United States. Due to long period of NBA season with each team must be playing 82 games a season, mostly all foreign players’ will fall under resident alien status based on the presence test. Foreign player, NBA and NBA Player Association must be aware of this taxation status if they want to work in United States and on the same time be a responsible tax payer so not to jeopardize their own career. Taxation level on the revenue of NBA will also be important matter because it will basically determined how the money is going to be spending on the new player recruitment drive.
Earning millions of dollars each year not only prop up question of taxation but also other macro economic variables and fiscal policy issues such as monetary transfer back to native countries, exchange rate, inflation, payment imbalances and economic health. Due to global terrorist threat, there is increasing monetary transfer restriction by US Treasury Department especially to those countries labeled as terrorist haven and those without diplomatic relationship with the United States. Exchange rates also played significant factors of foreign recruitment as most of all the payment will be done in US dollar whether it is a transfer money or salary. Due to trade imbalances of physical products there is increasing pressure to USA to improve its unhealthy payment balances and maintains it health cash flow in services sector. Transfer of big amount of money to buy out a professional player from country that has a wide gap of payment imbalances with USA such as China will be a sensitive issue to tackle.
The other much talked about economic factors affecting NBA is the salary or income level of the player. The new Collective Bargaining Agreement (CBA) between NBA and NBA Players Association dictates the player contract, salary cap, revenue distribution and will expires in 2010-11 seasons.Foreign player and NBA team owner must aware of the salary limit or cap as set on NBA Salary Cap which limit each teams to pay and in 2006-07 seasons the cap is around USD 53.135 millions. Setting the salary cap can hamper the development of NBA sports compare to other popular US sports such as NHL, NBL and NFL but however the salary cap in NBA is a soft cap which can be alter accordingly as it was set as only a guideline for team to comply to achieve the target in line with their team revenue.
Third macro environment factor is cultural factor. According to Robbins & Coulter (2006), differences between legal political and economics factors between two nations can be explained easily but getting information of differences in cultural characteristic is not easy. According to Chuck Williams (2004) national culture is the set of shared value and belief that affects the perception, decisions and behaviors of the people from a particular country. Of course foreign players from each native country may have culture that is varied from American culture and may not all fit well into the new environment. As a global organization, understanding cultural macro environment factor is very important to enable NBA recruit long lasting foreign based professionals that can fitted well into its league.
Interaction between national culture and organizational culture can be best described by a study done by Geert Hofstede. Hofstede identified five dimensions of cultures in the national influences.
* First dimension is power distance is the extent where least powerful members of a group expect there is differences of power distribution or unequal ness. Player from countries where power distance is weak, do not like the employer to have power over them and they want to have some degree of decision making responsibility.
* Second is uncertainty avoidance which reflects to what extend the society can accept or tolerate risk. People from countries which have low uncertainty avoidance are more comfortable with risk. Players from Catholic countries such as Tiago Splitter from Brazil tend to have high uncertainty avoidance according to survey by Geert Hofstede. They prefer society that institutes law, rules, regulations, and controls in order to reduce the amount of uncertainty within population.
* Third dimension is individualism versus collectivism is the degree to which a person in society can stand and act on own or alternatively act and cooperate as a member of a group. Japan, Catholic and Latin countries are said to be scoring high in collectivism which give a long term commitment to groups, members of society, family and sense of loyalty to the group. When NBA hiring a Latin players such as Italian Andrea Bargnini, it is important to have a few other members in the team with same cultural distinct as this player needs to build sense of belonging to the family.
* Fourth dimension is masculinity versus femininity is a measure of values placed on traditionally male or female values. Society with masculinity culture value competitiveness, wealth creation, assertiveness and ambition while on the other hand society with femininity culture value on caring relationship and quality of life.
* Fifth dimension is long term versus short term orientation. In long term oriented societies, thrift and perseverance are valued more; in short term oriented societies, respect for tradition and reciprocation of gifts and favors are valued more.
Besides assessing Hofstede Dimensions of Culture, the other thing to consider when recruiting the global talents is language barrier. Players recruit from East European, Africa or Asia may have difficulties to adapt to society that totally different in term of language usage and may take some time to learn. Playing in United States may need them to learn English language or else they may need interpreter to communicate in the team. Language barrier may be a key factor that will hold back the development of this sport industry.
In conclusion, when hiring a foreign talent, NBA must consider all these significant macro environment factors such as economic, legal-political and cultural factors because it will affect the smoothness of player transition, success and appealing of NBA in the global market and the most important is the fitness of foreign player into the new organizational culture.
(2) There is a lot of uncertainty in global environment but as a Commissioner of the NBA, David Stern has shown himself as an effective and efficient manager as he brings out NBA from brink of bankruptcy to be one of the most popular leagues in the world along NFL, NBL and EPL. There are many improvement and development that David Stern has carried out to further bringing NBA to global mainstreams as one of the major popular and lucrative sports industry.
David Stern can be credited for having aggressively building brand equity of NBA sports by promoting this sport worldwide and promoting sports icon. When he took over as Commissioner in 1984, 17 out of 23 teams in NBA is losing money and arena attendance is low averaging only 11 ,141 attendees per game. His capability to promote the game and build the brand equity can be seen in his efforts to build up the media icon of players such as Michael Jordan, Larry Bird and Magic Johnson which has been a global household name. He is also a marketing genius in promoting the sports from ad slogans such as “I Love This Game” to widely endorsement of famous sports apparel companies clearly put NBA as one of world most famous league in the world.
To further create visibility of NBA to global market, many offices has been expanded worldwide especially in big cities such as Barcelona, Hong Kong, London, Melbourne, Mexico City, Miami, Paris, Singapore, Taiwan, Tokyo, and Toronto. Predicting that the sports will become global, Stern is organizing a few pre-season matches around the world especially in Europe and Asia to give the market exposure to the popularity of the American sports. Spurs, Clippers, Suns and 76ers have training camps is Italy, Spain, France and Russia with pre-season games on hand. This pre-season matches has introduced NBA icon player that became an awe to a lot of fans around the world that try to emulate them. Beside that, those promotional plan also increase the revenues of NBA merchandising world-wide by associating it with the fans favorite player. 20% of NBA merchandise are sold outside USA with turn over of USD 430 millions annually. Associating with other sports apparel manufacturer such as Nike advertising endorsement further popularize the sports especially during the period of Michael Jordan in 1990s. Other business associate with NBA such Adidas - Reebook offering contracts worth millions of dollar annually.
David Stern knew that American market alone will not sustain the livelihood of the leagues and the world is already catching up in this popular sport. The proof of United States team waning dominance in the sports is they have been beaten up by other countries when American Dream Team only emerged as 3rd place finalist in Athens 2004 Olympic. The game has been gaining popularity in East European countries, South America, and Asia Pacific tremendously since 1990s. This has open up opportunities for NBA to enter the lucrative green but expanding market in term of merchandising and television broadcasting revenues. David Stern understands that this new market will open up to accept the sport if they have their own stars or icons in the league has led to recruitment of global talents in NBA. Popularity of NBA increases with the recruitment of global talents such as China’s Yao Ming, Germans Dirk Nowitzki, Argentinean Manu Ginubili, Serbian Marko Javic and Italian Andrea Bargnini. NBA TV broadcasting exposure to more than 212 countries open up lots of potential broadcasting revenues based on numbers of audiences that we have globally. Nearly 15% from USD 900 millions revenue in annual TV broadcasting came from these countries outside United States.
Jumping into bandwagon of latest technology development also highlighted Stern’s shrewd business skills and efficient in managing the global environment changes. Changes of technology especially in internet affecting and changing the organization not just in business entity but also sporting organization like NBA too. Stern has been promoting the leagues website NBA.com with appeal to major global market by tailoring into different segmentation by language such as English, Mandarin, Japanese and Spanish. This has attract majority of world population because those 4 languages are top 10 most widely use language in the world. 40% of the visitors to the website is those from outside United States with average hits around 600,000 daily. NBA.com TV is new digital televised broadcasting where audiences or eager fans can view live match, highlights and news surrounding the NBA leagues. Revenues from TV hitting around USD 900 millions with global reach. Streaming audios in English and Spanish add up revenues to NBA with average 1 millions people listen to it a pay USD 10 per person. Technology development in broadcasting and streaming already add up revenues potential of NBA because people no need to attend the sports arena to see the live match, but there is global reach of huge consumers base potential to access through TVs, Internet and audio streaming. This technology has revolutionized since Stern took over in 1984 where matches are taped and not aired in live. Partnership with global partner also has soared with China Sohu.com page on NBA view 3 millions hits daily and globo.com in Brazil enable 10,000 fans to watch Lakers – Maverick game live.
David Stern understanding of global environment already commercialized NBA to be one of the most lucrative sports industry. Basketball used to be a popular sports for American Whites and Blacks but with gaining of Hispanic population in United States, Stern is making NBA more appealing to those demographic groups. Understanding, accepting and adapting to the diversity of global exposure has open up many business opportunities to NBA. For examples NBA websites language options also cater Spanish language and its audio streaming in Spanish as it is assessable to growing Hispanic population not jut United States but also world wide. The commercialization does not stop in broadcasting and advertising but also in building up of theme restaurant, NBA stores and concept boutiques around the globe. All this efforts will add up to the potential revenue growth of NBA.
In conclusion, Stern has make a very good efforts in marketing NBA to be one of the most lucrative sports industry in the world. Understanding the universality of the sport and its potential to grow in the rest of the world encourage David Stern promote the sports globally by building network of offices in major city, holding up pre-seasons match and hiring global talents. Potential revenues has been growing because NBA now not just focus on attendance receipt in United States but also targeting wider audiences world wide by adapting to technology such as internet, NBA TV and audio streaming. Stern business savvy and ability to manage global environments can be credited as success factor of NBA to grow back from brinks of bankruptcy to one of four major leagues in USA along NFL, NBL and NHL.
From all the factors mention in the Diagram 1 below, legal-political factors is the most important thing where it first and foremost sets the possibility of enabling foreign based player entry into United States. All foreign professional players must abide to the legal entry requirement set by the government of United States of America. Compare to other countries, United States actually has a very flexible working entry requirement which value based on the immigrants or inbound workers’ working expertise, income level and experience in certain required fields. H-1B Visa is actually release to those working professionals in United States which is not an immigrant. All incoming working professionals must abide by the rule and criteria set by Department of Homeland Security before being able to be granted for the working visa.
Beside this normal legal entry requirement, ordinary working professionals must also abide by other rules and regulations either set by the government, NBA or the sports regulating body if he wants to work in league. For examples there are age requirement set up in CBA to restrict foreign recruitment to only those who are 19 years of age during the calendar year (2006). This legal requirement may deprive of NBA a lot of young potentials who are capable and professional enough to compete in that professional league but are constrained by their age. However with recent surge of popularity among foreign countries in NBA, many legal requirements have been relaxed to cater influx of foreign based players especially from Eastern European and Asian countries. This is same as the influx of East Asian player in English Premier League (EPL) notable club such as Manchester United and Everton recently which is actually efforts to woo Asian’s market of commercial televised broadcasting market and merchandising.
Entry requirements also affected by political or US bound foreign workers’ government diplomatic relationship with Unites States. With tighten entry requirement due to security threat by global terrorist set by Department of Homeland Security, there are some countries that may not be on generous list of acceptance by United States government. These countries such as Serbia, Albania, African nations and East European countries may have a lot of professional, talented and capable basketball players but tighten law may invalidate or slower the process of their entry into NBA. When recruiting foreign player, as an NBA team manager, we must know which country having diplomatic relationship with USA government and which is not because it will affect the smoothness of player transfer process. Countries that have virtually poor or no relationship with USA such as Cuba, North Korea and Iran will not be able to export its players to NBA.
The management of NBA is dictated by and follows the guidelines set under Collective Bargaining Agreement (CBA) as agreed by NBA owners and also NBA Players Association which is representing all the players. NBA and all the players must follow the rules that agreed collectively in term of team overall salary limit, players’ minimum and maximum salary, age limit to be drafted, discipline, retirement, buy out, training camp, moratorium period, trade rules, roster and etc.
Major differences of understanding on the rules and regulations of the sports between NBA and the players from all over the world is also one of the significant issues surrounding the leagues. Players recruited from all over the world are accustomed to the sports rules and regulations by FIBA, the sports regulatory body for basketball. Player recruited from other part of the world may not be familiar with the differences of the sports rules and regulations in United States but they have to adapt to it in order to play in NBA. Some aspect of comparison shown that there are variance in term of scoring line, restricted area, playing time, shot clock, possession, substitution, fouls, injury time and etc. NBA must also follow up on the trend with FIBA to know any major changes to the sports as it will also affect American based players when they compete internationally in other world competition or league.
Second macro environments factors to consider are the economic factors. NBA and foreign players must be aware of taxation structure in United States before working here. US taxation structure is very complex systems where there are federal, state and municipality level taxation for taxable residents. For resident aliens who are a green card holder or have substantial presence in the United States, they are automatically a tax resident of United States and are taxed regularly same as a US citizens. Meaning of substantial presence as according to IRS is those working aliens must be present for 183 days on the current year or 31 days during current year plus 1/3 of total days present in preceding year and 1/6 of total days present in the second preceding years. For non-resident alien or NRA they are subject to regular US resident tax for the income they earn in United States and 30% flat rate for income generated outside United States. Due to long period of NBA season with each team must be playing 82 games a season, mostly all foreign players’ will fall under resident alien status based on the presence test. Foreign player, NBA and NBA Player Association must be aware of this taxation status if they want to work in United States and on the same time be a responsible tax payer so not to jeopardize their own career. Taxation level on the revenue of NBA will also be important matter because it will basically determined how the money is going to be spending on the new player recruitment drive.
Earning millions of dollars each year not only prop up question of taxation but also other macro economic variables and fiscal policy issues such as monetary transfer back to native countries, exchange rate, inflation, payment imbalances and economic health. Due to global terrorist threat, there is increasing monetary transfer restriction by US Treasury Department especially to those countries labeled as terrorist haven and those without diplomatic relationship with the United States. Exchange rates also played significant factors of foreign recruitment as most of all the payment will be done in US dollar whether it is a transfer money or salary. Due to trade imbalances of physical products there is increasing pressure to USA to improve its unhealthy payment balances and maintains it health cash flow in services sector. Transfer of big amount of money to buy out a professional player from country that has a wide gap of payment imbalances with USA such as China will be a sensitive issue to tackle.
The other much talked about economic factors affecting NBA is the salary or income level of the player. The new Collective Bargaining Agreement (CBA) between NBA and NBA Players Association dictates the player contract, salary cap, revenue distribution and will expires in 2010-11 seasons.Foreign player and NBA team owner must aware of the salary limit or cap as set on NBA Salary Cap which limit each teams to pay and in 2006-07 seasons the cap is around USD 53.135 millions. Setting the salary cap can hamper the development of NBA sports compare to other popular US sports such as NHL, NBL and NFL but however the salary cap in NBA is a soft cap which can be alter accordingly as it was set as only a guideline for team to comply to achieve the target in line with their team revenue.
Third macro environment factor is cultural factor. According to Robbins & Coulter (2006), differences between legal political and economics factors between two nations can be explained easily but getting information of differences in cultural characteristic is not easy. According to Chuck Williams (2004) national culture is the set of shared value and belief that affects the perception, decisions and behaviors of the people from a particular country. Of course foreign players from each native country may have culture that is varied from American culture and may not all fit well into the new environment. As a global organization, understanding cultural macro environment factor is very important to enable NBA recruit long lasting foreign based professionals that can fitted well into its league.
Interaction between national culture and organizational culture can be best described by a study done by Geert Hofstede. Hofstede identified five dimensions of cultures in the national influences.
* First dimension is power distance is the extent where least powerful members of a group expect there is differences of power distribution or unequal ness. Player from countries where power distance is weak, do not like the employer to have power over them and they want to have some degree of decision making responsibility.
* Second is uncertainty avoidance which reflects to what extend the society can accept or tolerate risk. People from countries which have low uncertainty avoidance are more comfortable with risk. Players from Catholic countries such as Tiago Splitter from Brazil tend to have high uncertainty avoidance according to survey by Geert Hofstede. They prefer society that institutes law, rules, regulations, and controls in order to reduce the amount of uncertainty within population.
* Third dimension is individualism versus collectivism is the degree to which a person in society can stand and act on own or alternatively act and cooperate as a member of a group. Japan, Catholic and Latin countries are said to be scoring high in collectivism which give a long term commitment to groups, members of society, family and sense of loyalty to the group. When NBA hiring a Latin players such as Italian Andrea Bargnini, it is important to have a few other members in the team with same cultural distinct as this player needs to build sense of belonging to the family.
* Fourth dimension is masculinity versus femininity is a measure of values placed on traditionally male or female values. Society with masculinity culture value competitiveness, wealth creation, assertiveness and ambition while on the other hand society with femininity culture value on caring relationship and quality of life.
* Fifth dimension is long term versus short term orientation. In long term oriented societies, thrift and perseverance are valued more; in short term oriented societies, respect for tradition and reciprocation of gifts and favors are valued more.
Besides assessing Hofstede Dimensions of Culture, the other thing to consider when recruiting the global talents is language barrier. Players recruit from East European, Africa or Asia may have difficulties to adapt to society that totally different in term of language usage and may take some time to learn. Playing in United States may need them to learn English language or else they may need interpreter to communicate in the team. Language barrier may be a key factor that will hold back the development of this sport industry.
In conclusion, when hiring a foreign talent, NBA must consider all these significant macro environment factors such as economic, legal-political and cultural factors because it will affect the smoothness of player transition, success and appealing of NBA in the global market and the most important is the fitness of foreign player into the new organizational culture.
(2) There is a lot of uncertainty in global environment but as a Commissioner of the NBA, David Stern has shown himself as an effective and efficient manager as he brings out NBA from brink of bankruptcy to be one of the most popular leagues in the world along NFL, NBL and EPL. There are many improvement and development that David Stern has carried out to further bringing NBA to global mainstreams as one of the major popular and lucrative sports industry.
David Stern can be credited for having aggressively building brand equity of NBA sports by promoting this sport worldwide and promoting sports icon. When he took over as Commissioner in 1984, 17 out of 23 teams in NBA is losing money and arena attendance is low averaging only 11 ,141 attendees per game. His capability to promote the game and build the brand equity can be seen in his efforts to build up the media icon of players such as Michael Jordan, Larry Bird and Magic Johnson which has been a global household name. He is also a marketing genius in promoting the sports from ad slogans such as “I Love This Game” to widely endorsement of famous sports apparel companies clearly put NBA as one of world most famous league in the world.
To further create visibility of NBA to global market, many offices has been expanded worldwide especially in big cities such as Barcelona, Hong Kong, London, Melbourne, Mexico City, Miami, Paris, Singapore, Taiwan, Tokyo, and Toronto. Predicting that the sports will become global, Stern is organizing a few pre-season matches around the world especially in Europe and Asia to give the market exposure to the popularity of the American sports. Spurs, Clippers, Suns and 76ers have training camps is Italy, Spain, France and Russia with pre-season games on hand. This pre-season matches has introduced NBA icon player that became an awe to a lot of fans around the world that try to emulate them. Beside that, those promotional plan also increase the revenues of NBA merchandising world-wide by associating it with the fans favorite player. 20% of NBA merchandise are sold outside USA with turn over of USD 430 millions annually. Associating with other sports apparel manufacturer such as Nike advertising endorsement further popularize the sports especially during the period of Michael Jordan in 1990s. Other business associate with NBA such Adidas - Reebook offering contracts worth millions of dollar annually.
David Stern knew that American market alone will not sustain the livelihood of the leagues and the world is already catching up in this popular sport. The proof of United States team waning dominance in the sports is they have been beaten up by other countries when American Dream Team only emerged as 3rd place finalist in Athens 2004 Olympic. The game has been gaining popularity in East European countries, South America, and Asia Pacific tremendously since 1990s. This has open up opportunities for NBA to enter the lucrative green but expanding market in term of merchandising and television broadcasting revenues. David Stern understands that this new market will open up to accept the sport if they have their own stars or icons in the league has led to recruitment of global talents in NBA. Popularity of NBA increases with the recruitment of global talents such as China’s Yao Ming, Germans Dirk Nowitzki, Argentinean Manu Ginubili, Serbian Marko Javic and Italian Andrea Bargnini. NBA TV broadcasting exposure to more than 212 countries open up lots of potential broadcasting revenues based on numbers of audiences that we have globally. Nearly 15% from USD 900 millions revenue in annual TV broadcasting came from these countries outside United States.
Jumping into bandwagon of latest technology development also highlighted Stern’s shrewd business skills and efficient in managing the global environment changes. Changes of technology especially in internet affecting and changing the organization not just in business entity but also sporting organization like NBA too. Stern has been promoting the leagues website NBA.com with appeal to major global market by tailoring into different segmentation by language such as English, Mandarin, Japanese and Spanish. This has attract majority of world population because those 4 languages are top 10 most widely use language in the world. 40% of the visitors to the website is those from outside United States with average hits around 600,000 daily. NBA.com TV is new digital televised broadcasting where audiences or eager fans can view live match, highlights and news surrounding the NBA leagues. Revenues from TV hitting around USD 900 millions with global reach. Streaming audios in English and Spanish add up revenues to NBA with average 1 millions people listen to it a pay USD 10 per person. Technology development in broadcasting and streaming already add up revenues potential of NBA because people no need to attend the sports arena to see the live match, but there is global reach of huge consumers base potential to access through TVs, Internet and audio streaming. This technology has revolutionized since Stern took over in 1984 where matches are taped and not aired in live. Partnership with global partner also has soared with China Sohu.com page on NBA view 3 millions hits daily and globo.com in Brazil enable 10,000 fans to watch Lakers – Maverick game live.
David Stern understanding of global environment already commercialized NBA to be one of the most lucrative sports industry. Basketball used to be a popular sports for American Whites and Blacks but with gaining of Hispanic population in United States, Stern is making NBA more appealing to those demographic groups. Understanding, accepting and adapting to the diversity of global exposure has open up many business opportunities to NBA. For examples NBA websites language options also cater Spanish language and its audio streaming in Spanish as it is assessable to growing Hispanic population not jut United States but also world wide. The commercialization does not stop in broadcasting and advertising but also in building up of theme restaurant, NBA stores and concept boutiques around the globe. All this efforts will add up to the potential revenue growth of NBA.
In conclusion, Stern has make a very good efforts in marketing NBA to be one of the most lucrative sports industry in the world. Understanding the universality of the sport and its potential to grow in the rest of the world encourage David Stern promote the sports globally by building network of offices in major city, holding up pre-seasons match and hiring global talents. Potential revenues has been growing because NBA now not just focus on attendance receipt in United States but also targeting wider audiences world wide by adapting to technology such as internet, NBA TV and audio streaming. Stern business savvy and ability to manage global environments can be credited as success factor of NBA to grow back from brinks of bankruptcy to one of four major leagues in USA along NFL, NBL and NHL.
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