FIRST OF A FOUR-PART SERIES ON GLOBALIZATION IN SPORTS
The sun never sets on the NBA's empire. The dominant piece of wall art in the main lobby of the league's New York City headquarters doesn't depict Shaq dunking, Jordan levitating or Iverson dribbling—it's a monstrous map of the world, festooned with LED digital clocks for various time zones. By the time commissioner David Stern arrives at his sprawling corner office each morning, his gu-yuans in Beijing are shutting it down for the day, his Besch�ftigte in Cologne are lunching with clients, his empleados in Mexico City are just waking up. He usually begins his workday by checking overnight e-mail from the NBA's 12 satellite offices worldwide.
This year marks Stern's 20th season as commissioner, and the arc of his reign is not unlike that of a medieval emperor. First he solidified his base of power, turning a moribund league into a slickly packaged, telegenic property with charismatic stars and a place on the cultural vanguard. Then he set his sights on expanding his domain, colonizing markets from Buenos Aires to Bangalore. Along the way he staved off periodic rebellions (from the players' association), shepherded his subjects through a gilded age (franchise values and player salaries have, on average, increased more than tenfold) and instituted progressive policy (launching the WNBA). But when he finally abdicates the throne, Stern's legacy will be that of the visionary who capitalized on the international marketplace.
The 61-year-old Stern and his lieutenants are happy to traffic in numbers: The league will broadcast this week's Finals to 205 countries in 42 languages; fans outside the U.S. account for more than half the hits on nba.com; more than 20% of the $3 billion in merchandise sales comes from overseas, and one day, NBA sources predict, that figure will eclipse 50%. But the more compelling evidence of the league's global reach is anecdotal. It's the snowbound Icelandic teenager who, upon being rescued after 24 hours, asked, "Where am I? Is there school today? Did the Magic beat the 76ers?" It's the tiny knickknack shop in Stockholm where 60 kronor ($9 U.S.) will get you a Nick Van Exel—Nick Van Exel!—bobblehead doll. It's the teenager in Beijing who, eager to practice his English, approaches a Westerner on a shopping esplanade and discovers that the visitor hails from Indiana. Suddenly the teen's eyes widen to the size of quarters. " Indiana!" he says. "I like Reggie Miller!"
Like so many bounce passes, the NBA beams its games off satellites to television sets and computer monitors the world over. And it's not alone. Globalization—the buzzword that describes the ever-increasing exchange of goods, services and information across borders—has become the way of the world for American sports leagues. "The most globalized business in the world, and the most lucrative, is the drug trade," says prominent political historian Walter LaFeber, author of Michael Jordan and the New Global Capitalism. "But for legitimate businesses, sports is probably Number 1."
Major League Baseball departed from 128 years of tradition by opening the 2004 season not in a big league ballpark but in Tokyo—in no small part because a distributor there paid $275 million last fall for major league broadcast rights in Japan through '10. The majority of households that received Stanley Cup telecasts this spring were outside of North America, and the NHL's international television revenue has tripled since 1998. The NFL has had an auxiliary league in Europe for 12 seasons, while the Arena Football League has designs on adding a European division, the winner of which would compete in the AFL playoffs. Even NASCAR, the quintessential good ol' boy of American sport, broadcasts to 122 countries and has ambitions of crossing borders, despite domestic markets still to conquer and the high cost of transporting cars overseas.
Then there is soccer, the world's most global sport. More countries, we're reminded repeatedly, claim membership in F�d�ration Internationale de Football Association ( FIFA) than in the United Nations. The English Premier League is generally regarded as the ultimate sports association, and its iconic club, Manchester United, has planted its Red Caf� theme restaurants in outposts from Singapore to Chengdu. "Anyone who sticks his head in the sand and says, 'Life is good, I like doing business in my country, and I'm not going to change,' is setting himself up for a hard fall," says Dean Bonham, a Denver-based sports industry analyst. "The world is the market."
And it is the labor market as well (chart, page 83). Five of the top six players on the San Antonio Spurs claim provenance outside the U.S. There are 27 Samoans in the NFL. A staggering 47.6% of players signed to minor league baseball contracts are born outside the States. Since the fall of the Iron Curtain, the composition of the NHL has become heavily weighted with Russians and Eastern Europeans, including five of the top 10 goal scorers in '03-04. A Brazilian and a German are on NASCAR's roster of drivers. Even the Professional Bowlers Association tour, which wends its way through Middle America, features a Venezuelan and a highly successful Finn. "Sports made huge gains when they went from live viewing to being broadcast on television, and we're seeing that again as they move from national to international platforms," says Cornell economist Robert Frank, co-author of The Winner-Take-All Society. "With television rights starting to plateau in the U.S., international business is the way to generate growth. And it could be worth billions of dollars."
Adds Paul Swangard, managing director of Oregon's Warsaw Sports Marketing Center, "They say you can go anywhere in the world and say, 'Coca-Cola,' and everyone knows what you're talking about. But say ' L.A. Lakers' or ' Manchester United' or ' New York Yankees,' and you sure won't get many blank stares. Plus, what's one of the major ways Coke and MasterCard and the truly global consumer products advertise their brand? Through sports sponsorships."
Annals of Globalization, Note 1