Euroleague Business Summit in Munich explores sports trends

Euroleague Basketball and FC Bayern Munich teamed up last week to present the Euroleague Business Summit, one in a continuing series of events held in recent years to shine a light on developing trends at the crossroads between business and sports.
The summit, which featured the collaboration of IESE Business School and SPOX.com, looked specifically at the building of sustainable sports league models and at the future of fan engagement from the perspective of both sporting entities and their partners.
In his introduction to the summit, Jordi Bertomeu, the President and CEO of Euroleague Basketball, emphasized that sports leagues and clubs are unique businesses in which some market rules common in other industries may not always apply.

"There are many aspects that are easy to understand in the general business sector that are not so clear in this one," Mr. Bertomeu said. "The traditional sports model is coming to an end, and this is good news. Many organizations are taking a different point of view and we are seeing how sports organizations are looking at themselves as a regular business, generating resources, balancing budgets and so on. As a professional league, we have an important role in this change. We see the clubs as rivals on the court but as partners off the court, with cooperation rather than competition when they are seated around the same table."

The summit's first panel, which discussed the origins, implementation and benefits of financial fair play and accounting regulations in sports entities, featured Toni Dávila, an IESE professor, Marko Pesic, General Manager at FC Bayern Munich, and Eduard J. Scott, Chief Operations Officer of Euroleague Basketball.
Mr. Davila explained different aspects of financial fair play rules and practices.

"When we talk about professional sports, you are taking about a business, and the mentality is completely different from a federation," he said. "In a federation, you are not there for the fans but for the sport. But on a professional level, you have to make your fans, your customers, happy."

From a club standpoint, Mr. Pesic said, the business must function well whether or not the team wins or loses on the court.
"The biggest tasks we have in Bayern is how to make our business independent of sports results, which is something really complicated," Mr. Pesic said. "Basketball is the core product, but we develop other products around it, and this should be a goal. You cannot pray on a daily basis not to have an injured player. Sustainability cannot rely on winning each game."
Although there are different pathways to it, Mr. Scott said, sustainability is the future for both leagues and clubs.
"Having clubs rely only on a single sponsor or owner pumping in money is not the right approach," he said. "We have seen many cases in which such clubs face serious difficulties when these disappear. And same goes for the leagues. We need to provide brands with a safe and balanced environment that allows for the clubs and the league to acquire long-term investment. This is crucial for the business to grow."

The second discussion, on the future of fan relations, had four panelists: Uwe Alten, Managing Director of Havas Sports and Entertainment; Panos Meyer, Senior Account Director for Twitter; Fabian Fischer, Head of Sportsmarketing Unit Branded/Asset Branded/B2B for adidas; and Jose Luis Rosa-Medina, Director, Global Marketing Partnerships & Licensing, at Euroleague Basketball.
Mr. Alten emphasized that with full-time access to sports through digital media, fans are more demanding now.
"Several years ago you didn't have that demand," he said. "The key is to provide them a much more personal option to interact with their passion. To engage the sponsor with the fan you have to send the right message, otherwise you lose them both as a client and as fan, because you are not telling them what they want to hear. You cannot lose that
vision."

Mr. Meyer pointed out that sports brands have new opportunities through social media.

"You have the chance to reach the fan 24 hours," he said. "But you don't have to use technology just because you can: it has to make sense."

The strategy of adidas, Mr. Fischer said, is to find athletes and leagues that are the right ambassadors for the brand.

"There is a big difference between having many players or having the top players," he said. "Our key goal is signing players who are not only creative on the court, but in other different areas, as it is a message that our brand is focused on always innovating."

Mr. Rosa-Media made it clear that Euroleague Basketball seeks to compete not just for sports fans, but for entertainment consumers in general, and strives to innovate constantly with that in mind.

"We are fully aware that we are constantly asking people to spend their time following our league, and therefore we compete not only with other sports, but any leisure activity," he said. "We are in the business of getting their attention throughout the whole week and during the entire season and therefore, naturally, we are always looking for ways to be part of their lives in a significant way. The only way this can be done is by adding relevant value to the story we tell, which can only be the result of a constant conversation with our fan, who is our client, ambassador and detonation crowd at the same time. Technology can be a significant part of that entire process and therefore we embrace this as a league."