Politics & Governance, Sponsorship, Basketball, North America, Asia

The NBA deputy commissioner on basketball in China, gambling and innovation: “We listen to the fan”

With the NBA in China ahead of a new US basketball season, SportsPro speaks to deputy commissioner and chief operating officer Mark Tatum about the league’s reputation as an innovator and its new activities in media, betting and technology.

by Eoin Connolly
The NBA deputy commissioner on basketball in China, gambling and innovation: “We listen to the fan”

The National Basketball Association (NBA) is approaching a new season that will underline its reputation as perhaps the most innovative league in sport, increasingly setting a benchmark through its media, marketing and fan engagement initiatives.

A magnet for the world’s best talent – with 108 overseas players, up from 23 in 1992, now representing over 40 countries across the league – the NBA has expanded its international activities considerably over the past decade.

As pre-season nears its end, the Philadelphia 76ers and Dallas Mavericks are in China for games in Shanghai and Shenzhen. Joining them is NBA commissioner Adam Silver and so too is Mark Tatum, the league’s deputy commissioner and chief operating officer. Tatum has been with the NBA since the late 1990s, rising through the commercial department to become the executive vice president of global marketing partnerships before taking his current role in early 2014.

With SportsPro in the Chinese city of Xi’an for the inaugural Fiba World Basketball Summit, the league's ever-increasing international reach seemed a natural starting point for the conversation with Tatum.

SportsPro spoke with NBA deputy commissioner Mark Tatum whilst in China

How important a market is China to you at the moment?

China’s our most important market outside the United States. 300 million people play the game of basketball here in China. We have a grassroots programme in the Junior NBA, which is a partnership with the Ministry of Education and which this year will see Junior NBA programmes taught in 4,000 schools, 31 different provinces, reaching four million kids in the Chinese school system.

We have three NBA academies here in China. And we have terrific partners. We have 17 marketing partners around these upcoming NBA China Games. We also have partners in CCTV, which has been a TV broadcast partner of ours for over 30 years; Best TV has been a partner of ours for over 20 years; and then there’s our terrific digital partnership with Tencent. So it’s our most important market outside the United States.

Beyond that scale, how is China different from other markets – for the NBA or for other leagues and rights holders?

We’re the number one sport here in China. In the US we have the NFL – American football – but here in China we are the number one sport. So to me, I’d say that that’s one of the big differences. Given the scale of China, to be the number one sport just really amplifies the passion that people have for this game here.

How are your international activities evolving?

Digital is one critical way. The example is our partnership with Tencent in China. They broadcast and distribute over 400 games for free for fans. They also distribute close to 1,300 NBA games through the League Pass platform. We have similar relationships with Rakuten in Japan, with Kwese Media and Econet in Africa, and just in all other parts of the world.

The other thing that we’re doing internationally is developing elite talent. I mentioned the three academies here in China but we now have one academy in Australia, one in Africa, one in Mexico and one in India. So we have a total of seven different academies around the world to develop that next generation of elite basketball talent.

How do you identify opportunities to take NBA games outside of the US and decide what makes it worthwhile to disrupt teams’ busy calendars and take them to other markets?

The Global Games has been a very important part of our plan. One, it brings the live game experience into these markets that are passionate about basketball. We look at these markets and we look for: do they have the right facilities? What level of affinity do they have for the game? And what are the opportunities to continue to grow the game in either a country or in a region.

These are our 25th and 26th games in China; as you mentioned, we’ll play two regular season games in Mexico City in December and then in January, we’ll play the regular season game in London. Those games serve almost as All-Star games for the regions. They attract different marketing partners. It allows us to engage with consumers and fans through NBA Cares events in the community. I mean, it allows our marketing partners to activate all season long leading up to those games and those activities. It’s just a terrific way for us to engage with our fans.

Golden State Warriors star Klay Thompson visited China this summer on a promotional tour for the NBA

This year, it will launch a new microtransactions-based digital broadcast offering. When the regular season tips off on 16th October, they will have the option of paying US$1.99 to watch the last quarter of games via its NBA League Pass service and Turner’s B/R Live. Plans are already in place for fans to be able to pay for ten minutes of real-time access to a stream at any point in games from later in the season, part of a dedicated approach to digital media that includes other concepts like ‘mobile-view’ formatting of live games for smartphones and weekly virtual reality broadcasts.

Something that the NBA is doing this season that’s quite radical is the new fourth-quarter League Pass offer. What are your expectations for that in its first full year?

We’ve been experimenting over the last couple of years with our digital product. It used to be that in order to get those games, you had to buy the season-long pass. And then we said, “Well, maybe there’s a consumer out there that just wants to follow their team or follow their player, or just buy a game.”

And so these microtransactions, it’s really us segmenting the fan and segmenting their viewing habits and their potential purchasing habits. And recognising that you may be doing something, and you may not be watching the game, and you hear that LeBron James is having an incredible game and it might be a historic moment – and those historic moments are happening every night – so you get an alert and all of sudden, instead of having to buy the season or buy the whole game, you can say, “I want to buy this fourth quarter.” Or people even want to just get ten minutes of action.

And so we’re now taking it from a very consumer-focused mindset to say, “How does the fan want to purchase and engage with the product?” Then we’re trying to deliver a product that is meeting their needs.

What does it say about the direction that your content strategy is going in? Where does it sit in that strategy?

Our content strategy is about accessibility and making sure that wherever our fans are, they’re able to get our product in an easy-to-digest, easy-to-consume format. That is, I think, the future. It’s got to be customised, it’s got to be easy and it’s got to be available. And I think that’s our strategy going forward, and that’s what fans are going to be demanding from rights holders, from sports properties going forward.

Starting this season, fans will be able to buy streaming access to the fourth quarter of NBA games on League Pass

Is it about creating as many touch points as possible? How do you prioritise what you’re putting resources into?

We listen to the fan – and we know that as they start moving into new spaces, we have to be right there with them. As they start adopting new platforms like virtual reality, like augmented reality, we say as a league and as a sport that we need to be there.

So we started streaming our games – a game a week – in virtual reality, for that fan that loves the virtual reality experience. Augmented reality: we’re doing experiments in terms of games; we have a partnership with and are working with Magic Leap, who are the leaders in this augmented reality space, to again provide content there.

With the NBA 2K League, we saw enormous demand for esports and the NBA 2K game is one of the most popular video games in the world so we decided that we would create this league to take advantage of how fans were consuming our game. That’s been tremendously successful. We’ve been putting it out on the Amazon Twitch platform which is where a lot of these gamers and esports fans are.

So we listen to the fans and as we get that feedback, we decide we need to deliver the game wherever they are.

The NBA hits another landmark this season through its partnership with MGM Resorts International, the first betting sponsorship deal signed by a US major league after a Supreme Court ruling earlier this year lifted a federal bar on sports gambling. That folds into an evolving betting strategy that includes a long-term partnership with analytics and integrity specialist Sportradar to help the league develop and commercialise its data.

You’ve taken a lead on betting in terms of the need for US federal coordination on the rules, and so on, but where does that now sit in your wider corporate strategy?

Sports betting, it’s happening today. And what we have advocated for is the legalisation of it in the United States because we feel like it’s already happening but it’s happening underground, and what would be better is if it became legal and it was regulated.

Obviously, our preference would have been for federal regulations so that we don’t have to deal with state-by-state regulations. Now, where we are today is that different states are actually looking at laws and regulations, and some have enacted them, on specific sports betting. So we’re dealing with the hand that was dealt to us. That being said, we are in discussions and engaging directly with those state governments and the local governments. We have to ensure that the integrity of the game is protected, first and foremost. And I do think that we’re having productive conversations with the state governments in those different areas.

But clearly, our preference would be that there are some federal regulations there – and lately there’s been some indications from the federal government that they may look into that.

Is the NBA’s reputation as an innovator just a product of a strategy aimed at bringing you closer to your fans or is it also a brand positioning you pursue in and of itself?

I think there’s a recognition inside the NBA – and there always has been – that you can’t stand still, that you have to continue to improve your product, improve your approach. And I think that’s what drives us.

But I will tell you that what helps us a lot is our fans. Our fans are younger. They’re tech-savvy, they’re digital, they’re these millennials – and our players are, too. And a lot of times, the reason that we innovate or the things that we do are driven by things that we hear from our players and our fans.

We hear about the latest technologies, the latest platforms, from them, because they’re of that demographic. They’re actual consumers of new forms, new distribution platforms, new digital and social platforms, and they come back to us and they say: “Hey, there’s this new platform called Twitter!” Or Facebook, or Snapchat, or Instagram, or WeChat, or Weibo. “This is how I’m consuming my content; I want to get my NBA content here.”

So we have been fortunate that our fans and our players are of that demographic and they feed that into us, and so that allows us to stay ahead of the curve in those different areas.

The NBA hits another landmark this season through its partnership with MGM Resorts International