Bring Back Fans: Aligning incentives and LeBron as NBA brand manager

The key to strengthening and growing the NBA fanbase in this new pandemic paradigm is aligning incentives between the league and star players like LeBron. In part 1 of this series, we looked at how and why NBA fandom has been warped.

The NBA is debating a pre-Christmas start for its next season. A late December start would give the NBA exposure during the Christmas season and allow for a June Finals. The league has estimated that pushing the season start to January could reduce revenues by $1 billion.

The NBA’s business has taken significant hits from COVID19 and the events that followed. The intense passion of fans is what sets sports apart but also what left sports vulnerable to COVID19 disruptions. Initially, the suspension of sports caused a shock that disrupted the habits of sports fans. When the games came back, the shutdown of places to watch and discuss sports caused fandom to falter. The end result was a more than 50 percent drop in the Finals’ ratings.

The NBA, and other leagues, are now struggling to bring fans back. Most of the challenges stem from COVID, but some problems are self-inflicted. Case in point, the start of next season has already become contentious.

The Lakers’ Danny Green speculated that LeBron James and other star players might be unwilling to show up for a pre-Christmas start of the season. On the other side, another Lakers player, Jared Dudley, offered a “hard no” to a 50- game season that would result in prorated player salaries.

This internal strife highlights a critical challenge for sports leagues. The starting point for reviving the fanbase should be aligning the goals of the league, teams, players, and fans. The Collective Bargaining Agreement, or CBA, defines the league’s rules, such as free agency rules, salary caps, and revenue sharing, that dictate how teams compete. The CBA is the best mechanism for increasing coordination and cooperation within the NBA.

The fans are not part of CBAs. But given that sports leagues are businesses and fans are customers, the relationship between players and owners should explicitly consider consumer demand. How the owners and players work together, or fail to work together, influences fan interest and league revenues.

For instance, the NBA has long chosen to emphasize its stars, and the NBA’s fortunes have risen and fallen with Magic, Larry, Michael, Kobe, and LeBron. In the 2020 All-Star event, the league named the opposing sides Team LeBron and Team Giannis. The emphasis on Super Stars creates a fan culture focused on individual players.

A critical result of the events of 2020 is that players now have stronger voices and increasingly control the public perception of the league. The league and the players are now jointly managing the NBA brand, and the players have the louder megaphone. The highest-profile players can costlessly reach tens of millions of fans. LeBron James has about 73 million Instagram Followers, while the Los Angeles Lakers have about 15 million.

How can the NBA and its players align incentives in appealing to fans?

As the NBA and other sports find themselves in a fundamentally changed post-2020 environment, it is useful to consider fundamental changes to the CBA. I believe that the most powerful force for attracting fans is something that I will refer to as social influence. Social influence is the ability to communicate directly through social media channels and indirectly through organic media coverage. It is something the players have, and the NBA needs.

The next CBA should include structures that facilitate cooperation between the league and players to build social influence and develop a valuable fan base. First, teams and players must acknowledge how social influence is created. The players have substantial audiences, but these audiences are the product of the players being members of the NBA. Social influence is jointly created and should be shared. Second, the impact of social influence needs to be measured. The NBA is a star-driven league, so understanding the players’ impact on the fanbase is critical. Third, players should be compensated for using their social influence to benefit the league.

Expanding the CBA to include social media assets is critical long-term, but the immediate issue is when to start the next season. COVID cases are spiking, and it seems unlikely that fans will be in indoor stadiums in the next few months. Players may be worn out from the previous season and may fear injury. Organizations without an established core of players under contract may struggle to put competitive rosters on the floor.

While there are multiple reasons to delay, the Holiday Season is an ideal time to jumpstart fandom. The Christmas holidays are a time of gathering where communal viewing of sports is possible. It is also a moment when families have the time to bond over games. With arenas, sports bars, offices, and schools all practicing “excitement limiting” social distancing, the Christmas season games are the league’s best chance to generate some sharable thrills.

Building alignment between players and teams on the start of the season is something the NBA is well equipped to handle. The league and players need to determine a revenue split that works for both sides. In this case, maybe the league needs to give a little more. The players are giving up recovery time that may lead to injury or reduced performance. If the players are taking on incremental risk, the league needs to provide compensation.

However, getting back into the home is just the start. As the NBA and other leagues recover, they may find themselves dealing with a fundamentally changed sports fan landscape.

Sports fandom has traditionally been determined by where you live. If you grew up in Boston, you were a Celtics, Patriots, Reds Sox, and Bruins fan. But this kind of geography-based fandom has been under pressure for years. Television, newspapers, and radio are increasingly irrelevant to younger generations.

The channels through which fandom is transmitted are evolving, and the COVID shutdowns have hastened the process. The centers of fan communities may be shifting permanently to the online environment. Donning a new Bulls jersey on a TikTok video may be more important than wearing it to school.

The new normal for sports may be that fandom now has to be earned, and it may be less regional. As Instagram and Twitter replace local media, we may see less local fandom and ever more interest in superstars and iconic teams.

Again, we see the importance of the player’s social influence and alignment of interests. NBA stars are often cultural icons. The social capital and star power of NBA athletes are powerful magnets for attracting younger fans.

As the NBA positions for the future, we also need to consider the current social environment. Silver was reportedly surprised by the Finals’ ratings and suggested that future social justice messages would be less direct. “My sense is there will be some sort of return to normalcy. That those messages will largely be left to be delivered off the floor. And I understand those people who are saying ‘I’m on your side, but I want to watch a basketball game,’” Silver said.

Embedded in Silver’s quote is an observation that fanbases may be splintering into very different segments. Where it was once enough to put a winning team on the floor, it may be increasingly challenging to appeal to increasingly distinct segments of fans simultaneously. The NBA’s fan base tends to be younger and more diverse. The NBA also has a clear interest in developing the NBA as a global property and monetizing a half- billion Chinese fans. The era of mass marketing may be coming to a close.

While Silver’s quote suggests that the NBA wants to find a balance between player advocacy and fan preferences, the need for alignment goes beyond the current political issues. It was a high profile story when Joel Embiid and J.R. Smith complained about the bubble’s food. The marketing question is whether millionaire players complaining about food during a pandemic bothers fans? Giving the players a direct stake in the NBA brand might make IG posts and Tweets that make the league look bad much less common.

In summary, the upheavals of 2020 have accelerated trends related to player empowerment and fan preferences. Social media provides players with powerful platforms that create direct connections to fans. Players have greater control over their brands, and fans have greater access and choice as to what to follow. Platforms like Twitter and Instagram have removed the middleman.

Great player empowerment and fan flexibility are changing the balance of power. As players grow massive audiences, owners increasingly lose the ability to control the message. Whether the issue is marketing to China, Republicans, or Generation Z, the league needs to adapt to this new environment.

The major themes for the NBA and other leagues moving forward are the importance of rebuilding the community aspects of fandom and creating mechanisms that align teams and players’ interests. With traditional fandom under pressure, the players and teams need to become full partners and jointly manage increasingly important online spaces. Ultimately, the COVID period has reminded us of something essential about the nature of fans. What makes fandom special is that people want and need to share their love for a team or player with other like-minded folks. The only thing that is changing is how and where fans interact and share.