NBA Europe promises 'hundreds of millions' of dollars in its first year

The NBA Europe will pay its future members “hundreds of millions” in dollars, one of its founders, George Aivazoglou, promised in an interview with AFP, providing some details on the economic model of a league built for “the next 100 years.”

This project, in collaboration with the International Federation (FIBA) and scheduled to launch in the northern hemisphere in the fall of 2027, raises questions about its economic viability.

This is especially true given the required initial investment and the hypothetical profits, at a time when virtually all major European clubs are losing money.

In exchange for an equity stake currently estimated to be “between 500 million and 1,000 million” dollars, according to Aivazoglou, the franchisees (12 initially) will become “shareholders” of the future league and will therefore receive profits as soon as it becomes profitable.

Added to these potential profits will be direct revenue (tickets, merchandise, and potential television rights).

"The NBA Europe asset will be worth tens of billions of dollars in the long term," said Aivazoglou, head of the NBA’s Europe and Middle East division.

In pursuit of profitability

To ensure that the franchises make money from day one, a mechanism will be put in place, the promoter added.

“The teams will benefit from a very significant centralized revenue-sharing program by the league: we’re talking about hundreds of millions of dollars a year in total, even billions in the first 10 years of operation,” explained Aivazoglou.

The non-permanent teams (4 in total) will also be affected by this mechanism, part of which will be fixed and the other variable and performance-based, according to a source close to the matter.

In total, the NBA plans to invest $3 billion to cover initial losses and contribute its expertise in commercial, communications, and operational sectors, among others.

Third phase

Aivazoglou stated that the league had received “several applications for each of the 12 cities” where it seeks to establish permanent franchises.

The NBA has drawn up a shortlist “of the best possible investors and partners” for each of the 12 cities, with whom it is in talks “through June 29,” Aivazoglou specified.

Next will come the third phase of the process, which is internal to the NBA.

“We must present the results of that second phase to our board of directors, and the same goes for FIBA. Then we’ll move on to the next stages, during which there could be announcements,” Aivazoglou explained.