What to know about Euroleague competitor

A version of this article first appeared in the CNBC Sport newsletter with Alex Sherman, which brings you the biggest news and exclusive interviews from the worlds of sports business and media. Sign up to receive future editions, straight to your inbox. NBA Commissioner Adam Silver has a new pet project with grand ambitions — to reorganize European professional basketball with an NBA league at the top of the funnel. The NBA is full steam ahead with plans to create NBA Europe, a league with 10 to 12 permanent teams and four to six open spots, available to any FIBA-affiliated team in Europe on an annual basis. FIBA is the sport’s international governing body in Europe. According to league sources, the NBA has targeted the biggest European markets – London, Paris, Rome, Madrid, Barcelona, Athens, Istanbul and Berlin — as potential homes for permanent teams. Silver would like the organization to be a combination of brand new teams and existing clubs. While some teams will have new investor backing, others will derive from soccer clubs backed by their current owners and investment funds. Real Madrid, which already has a basketball club, has had “direct, high level talks” to join NBA Europe, FIBA Europe President Jorge Garbajosa said last month . Other soccer behemoths that don’t have basketball teams could follow suit, such as Paris Saint-Germain. League executives have spent the past month meeting with dozens of potential investors in franchises in Europe, including wealthy individuals and private equity funds. Non-binding bids for those teams are due in late March. I’m told the NBA wants franchise fees of about $1 billion, though some investor groups have balked at that number and have pushed for fees closer to $500 million. It’s possible the NBA Board of Governors could greenlight the sale of franchises in some cities, and thus the formation of the league, during its upcoming March meeting. The NBA has targeted October 2027 for the league’s debut. The NBA has held conversations with several media companies with global aspirations to broadcast the games, including Amazon and YouTube, according to sources familiar with the matter. Amazon and YouTube spokespeople declined to comment. No decision on a broadcast partner or partners has been made yet, according to an NBA spokesperson. While a fledgling league without hard audience data will likely be limited in the media rights money it initially commands, the NBA hopes that anchoring permanent teams in Europe’s biggest media markets – many of which don’t have permanent teams in the EuroLeague, the continent’s top basketball league – will make the league interesting to big partners. Currently, some of Europe’s best basketball teams (including Turkey’s Fenerbahçe Beko and Greece’s Olympiacos Piraeus) aren’t connected to its largest media markets, dampening ubiquitous continental interest in the sport and lowering its television value. There won’t be any affiliation between NBA Europe teams and NBA franchises. That means an NBA team won’t be able to store a player on an NBA Europe club like it does with the G League. Still, league executives envision NBA teams playing preseason games against NBA Europe clubs. Longer term, teams from NBA Europe could play against NBA competition in the Emirates NBA Cup, the league’s mid-season tournament, Tatum said during All-Star weekend. “As the league grows over time, the quality of the competition will continue to get better and better and better, and I could see more crossover between NBA clubs and the NBA European league teams,” Tatum said. Creating new incentives Beyond the permanent teams, NBA Europe will have a “play yourself into our league” component that will be familiar to fans of European soccer, whose major leagues have this same dynamic. This quirk isn’t just an appeal to European fans – it’s also key to the league’s ambitions. The open rotating spots would go to any club affiliated in a FIBA basketball league throughout Europe. These teams would play into NBA Europe by winning their respective domestic league, followed by a tournament of those champions. Another route could be to win or potentially finish second in the FIBA Basketball Champions League, which already exists today. Like the major American leagues, the EuroLeague is a closed league. Only about 10% of all European club teams have the chance to play in the organization. The NBA is betting that by opening up NBA Europe, it can incentivize the entire European infrastructure by improving player development, marketing, and fan interest throughout Europe, where basketball is the second-most popular sport after soccer. More than 270 million Europeans are basketball fans, according to NBA data. Still, basketball makes up less than 1% of Europe’s $45 billion sports media and sponsorship market, according to NBA data. The NBA is banking on fans becoming more interested in their local EuroLeague teams – perhaps watching more games on TV – knowing there’s a chance for them to earn a spot in NBA Europe. “What we want to do is make European basketball as good as it can be, as strong as it can be, both from a product, competitive standpoint, as well as from a commercial standpoint,” said Tatum. “We want this to be beneficial for the entire ecosystem, for the players, for the fans, and for the teams. That’s what our primary objective is here.” Silver knows investors are champing at the bit to get in on the ground floor of sports teams. Many wealthy individuals – including current or recently retired players – would love to be a part of an ownership group and are priced out of the NBA. Building a successful league in Europe won’t just give them opportunities to get in on the permanent teams but could be a rising tide that lifts all European basketball boats. Still, NBA Europe will present a deep-pocketed competitor to the current EuroLeague. This dynamic could easily cause tensions for team owners, players, executives and fans. As it happens, the EuroLeague has a new CEO – Chus Bueno – who is a former NBA executive. Bueno started just a few weeks ago . NBA senior leadership has expressed hope the EuroLeague and NBA Europe can become partners, including the possibility of EuroLeague taking a stake in NBA Europe, an equity exchange between the two leagues, or perhaps even a merger, according to sources familiar with the matter. Tatum said during All-Star Weekend he hopes Bueno will serve as a “bridge between us, FIBA and the EuroLeague clubs” as the NBA tries to seize new territory.