The clock is almost starting again for the Milwaukee Bucks.
The team co-owned by Avenue Capital CEO and chairman Marc Lasry has an international star on its hands with forward Giannis Antetokounmpo, who was crowned league MVP of the National Basketball Association last season.
Like most NBA superstars, Antetokounmpo, the 25-year-old phenom from Athens, Greece, is the accelerator to the Bucks’ business. Since making the All-Star team in 2017, Antetokounmpo helped grow revenue from $179 million to roughly $280 million per season, and the team’s attendance shot from 27th to 17th in the league in 2019.
The Bucks have also gained fans across Europe with the help of Antetokounmpo’s success. But now that he’s MVP, the window for winning a title is open. And in the NBA, superstars want championships, or they’ll look elsewhere.
The NBA returns on Dec. 22, a little more than 100 days after the Bucks’ elimination from the league’s bubble playoffs. After the exit, the rumors of Antetokounmpo’s future entered, fueled on Twitter and throughout league circles.
“To get a star that helps bring an image and playoff games, etc., to your market is all a positive to the branding of the Bucks as well as sponsor interest, broadcast interest, and fan interest,” said marketing executive Tony Ponturo.
But “it may be only for a short period. You have to keep building your teams, so if you lose the star, there’s still something to follow,” said Ponturo, a former vice president of Anheuser-Busch global media sports and entertainment marketing.
The real estate play
The team that shut down the NBA on Aug. 26 to protest another police shooting of a Black man is now preparing for life without spectators.
The NBA issued guidelines on allowing fans back, but teams will need permission from local government officials to proceed. With Covid-19 cases increasing, team presidents will need to lobby for those approvals.
Peter Feigin, president of both the Bucks and the team’s arena, Fiserv Forum, said the season will start without fans. The Bucks will switch to all-digital ticketing, plan to convert to mobile ordering for concessions and work with data company SAP to incorporate detailed arena analytics.
The long-term plan centers around real estate, which sports franchise appraiser Roger Grabowski labeled “surrounding investments.”
“Most of the teams today are using the stadiums and the surrounding area as an entire business, not just the team,” said Grabowski, a managing director at financial consultancy firm Duff & Phelps.
Lasry and company are relying on Feigin to continue reshaping the franchise the group purchased in 2014 for $550 million. The team is currently worth $1.5 billion, according to Forbes, and that will likely increase should Feigin complete the development the team refers to as “Deer District.“
The 30-acre community is part of the team’s economic development plan, to which taxpayers contributed $250 million. It landed the Bucks a $524 million arena, which opened in 2018.
The area will include more high-end apartments, and Marriott has committed to a hotel scheduled to open in 2023. Feigin said plans around the office space of more than 200,000 square feet are being reexamined due to Covid-19.
But he wants a “supermarket, pharmacy, a gym, all the little pieces that make this a livable, workable destination where people want to be.”
“To make this vibrant, you need density,” Feigin said. “And to have density, we need a few hundred people working there and a few hundred units of residential to create a neighborhood as well as all the other infrastructure pieces.”
Race to 1 billion fans
The team is in good shape on the basketball side, thanks in huge part to Antetokounmpo.
The Bucks’ TV broadcasting partnerships are secure for another five years, according to Feigin. The deal with Sinclair’s Fox Sports Wisconsin is worth roughly $200 million.
The team’s jersey patch deal with Harley-Davidson will end after next season, but Feigin said three global patch agreements are on the table and should be completed before 2020 ends.
The NBA expects an increase in its patch revenue after changing the patches’ size to make them more visible. They’re also now open to international partnerships. The new play: global companies marketing to local fan bases in the U.S.
“I think these next-generation patch deals will redefine the value of the patch in a great way,” Feigin said. “It took a couple of years, but the brand has realized the strength of the impressions and global reach.”
And with Antetokounmpo growing the team’s interest in places such as Indonesia and China, a mega market for the NBA, the Bucks should see an increase in its global brand, which will drive revenue.
“What makes Giannis so different is the European attraction,” Feigin said. “He’s a European star, and it brought all these European countries who have an interest in following him.”
“For us, it’s the race to 1 billion fans,” Feigin added. “We don’t want to be Wisconsin’s team. We don’t want to be America’s team. We want to be a global team. We want to be the NBA’s poster child for success around the world.”
Keeping the ‘Greek Freak’
For that to happen, and for the Deer District to attract business and for the patch to increase in value, it will help if Antetokounmpo is in a Bucks uniform.
On Monday, in a series of transactions aimed at keeping their star happy, the Bucks reportedly acquired guard Jrue Holiday from the New Orleans Pelicans and sharpshooter Bogdan Bogdanovic from the Sacramento Kings.
Antetokounmpo met with the Bucks’ top brass after the team’s disappointing exit from the playoffs in September to discuss the team’s future. He’s scheduled to hit free agency in 2021 and will be eligible for a supermax contract worth approximately $250 million.
Antetokounmpo recently told Swedish newspaper Aftonbladet he wants to make sure both parties are on the same page when it comes to competing for a title.
Should that occur, “I’ll be there for many years,” Antetokounmpo said. “If they do not, we’ll see. The NBA is business and we take it day by day. Hopefully, we can succeed together.”
Feigin said it’s a “moment in time” to leverage opportunities while the team has its international superstar. The Bucks are in win-now mode on and off the court to satisfy Antetokounmpo and grow the business.
The clock starts again on Dec. 22.
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