Marco Baldi started working for Alba Berlin, a Division I team in Germany, in 1990, becoming a team Vice President in 1999. He is currently a member of the Board of the German Division I League, and a member of the Board of the Euroleague.
It is essential for professional sports clubs to expand their economic base in order to sustain growth and development. There is no guaranteed “one-size fits all” way to achieve this goal. A look at the top European basketball clubs shows that the economic viability of a club is affected by diverse factors. Please note that the following descriptions should not be viewed as inflexible; there are numerous variations that I will not mention in this article.
Some clubs build their economic base on private individuals or companies, which invest considerable sums of money for the love of sport and/or as a way to gain social standing. In this case, the widening of the economic base or a significant return on investment is of less importance than the ultimate won-lost record for the year. This is similar in the case of a second group of clubs, which have strong support from their local communities or which belong to a larger club with high social standing in the community. The third group is made up of clubs that generate their income almost solely from the market and therefore have to be market-oriented. Alba Berlin belongs to this group.
Market orientation means analyzing the existing specific market conditions. Basketball is still a relatively new sport in Germany, but the popularity of the sport has grown enormously over the last decade. When comparing attendance at games, the BBL of Germany now ranks third in Europe, behind the ACB (the Spanish League) and just behind the A League (the Italian League). Basketball plays an important social role in all BBL cities in Germany, although the national recognition of the league beyond its centers still needs to be improved.
Special conditions are prevalent in Berlin: 5 million people live in the Berlin area. Ten different daily papers are published and numerous TV and radio stations broadcast every day. Yet, paradoxically, there is a relatively weak economic infrastructure due to the years of isolation and then the recent reunification with East Germany. Competition in the sports and leisure sector is extreme. In Berlin alone, there are 90 teams in a variety of sports that participate in the most competitive national leagues. In addition, Berlin offers extensive cultural and leisure alternatives, which is unique in Germany in both diversity and volume. In brief: we have a huge potential on one hand and intense competition on the other. To succeed in the face of this stiff competition, certain key points need to be kept in mind at all times:
- The team must be high performance, offering a high level of local and national identification.
- A strong social acceptance of the team in Berlin.
- Business must be conducted in a professional and diligent manner.
- The organization and infrastructure of the team must be able to work and react to the existing market.
All these points are interlinked and must ultimately be seen as unified. Nevertheless – as the subject demands – I would like to focus in this next section on one final point.
ORGANIZATION AS AN ASSET
Eighty-five percent of Alba Berlin’s profits are obtained from sponsorship and ticket sales. The available budget has increased tenfold since 1990, although in the past two years we were not able to increase it due to the weak state of the economy.
Over this period, the cost ratio between the sporting area (mostly consisting of coaches and player salaries) and other costs has changed from 85:15 (1990) to a current ratio of 60:40. Still, Alba Berlin was able to increase the budget and provide more funds each year by building up a powerful and market-oriented organization.
ALBA Berlin’s marketing activity credo can be described quite simply: Act! Don’t react! This goes for marketing and ticketing as well as for public relations. It is vitally important that all these departments interact with each other. ALBA has six employees who are specifically active in these areas and systematically work the market.
MARKETING AND TICKETING
In the marketing department, we directly approach potential partners to whom we present specific, meaningful marketing data and then offer them a clearly-defined service package. We differentiate between three types:
- Main sponsors (use of name, general supplier and uniform partner)
- Official sponsors (advertising partners with mostly national orientation)
- ALBA club partners (advertising partners with mostly regional orientation)
In addition to the agreed advertising, main and official sponsors have industry exclusivity. We are currently working with three main sponsors, nine official sponsors, and twelve ALBA club partners.
The fourth level and the transition to our ticketing department is our hospitality program, which offers companies and other institutions various hospitality arrangements at home games. The products we offer range from the classic VIP ticket with access to the hospitality lounge, to the event package, which can be booked by customers who wish to treat a group of any size to a special program.
We are currently modifying our classic ticket sales and sales methods with the aim of making optimal use of the arena, therefore increasing ticket sales. ALBA Berlin now offers a comprehensive ticketing service. Tickets for all ALBA home games are available via a ticket hotline, from fifty ticket sales locations throughout Berlin, via the Internet, at the arena ticket office, and directly from the ALBA office. The tickets can be picked up at the time of purchase, picked up at a later date, delivered by courier or mail, or left at the arena ticket office- whatever the customer wants. Our goal is to make the purchase of tickets as easy as possible.
We make a concerted effort to approach companies, institutions, and social groups to make them aware of our ticket products and how they can be used as rewards for good customers. We have received important ticketing tips and help from the Euroleague, which has initiated a special Euroleague Ticketing Program in which all Euroleague clubs can participate.
Such a market-oriented club as ours is dependant upon the overall development of basketball. In addition to tradition, the quality, image, and attractiveness of a sport are extremely important parameters influencing its popularity and resonance within the market. Disagreements conducted in the public arena and the divisions between FIBA and ULEB are absolutely counter-productive in this context.
Periods of economic downturn also have a direct effect on our profit situation. For this reason, it is of utmost importance to provide professional support for existing customers in order to build up a long-term relationship of mutual benefit. However, it is still a successful, competitive, and enthusiastic team that creates the best conditions for positive development. This is why funds need to be continually generated. And this is where we come full circle.