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Volume 23 No. 13
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NBA preview: L.A. Story

The star power of Kawhi Leonard and LeBron James in Southern California fuels confidence in the league’s global growth.
Photo: getty images
Photo: getty images
Photo: getty images

The NBA thrives on having superstars scattered across its 30 teams. A series of blockbuster moves this summer, however, made clear that the league is having a Hollywood moment, as the gilded Los Angeles Lakers and the transformed Los Angeles Clippers share the spotlight.

The Lakers, whose monstrous June trade with New Orleans brought All-Star big man Anthony Davis to town to pair with LeBron James, are looking to restore luster in a franchise that hasn’t reached the postseason in any of the last six seasons.

The Clippers, under billionaire owner Steve Ballmer, have plans for a new arena and a championship after a stunning summer that saw the additions of star forwards Kawhi Leonard, via free agency, and Paul George, in a trade with Oklahoma City.

Executives to know

 

Los Angeles Lakers

Tim Harris
President of business operations 
The longtime executive is involved in all the Lakers’ key business decisions and strategy.

Rob Pelinka
General manager 
He brought LeBron James to L.A. and traded for Anthony Davis. Will the rest of the roster he orchestrated return the Lakers to championship form?

Veronica Lawlor
VP, ticket sales and operations
Lawlor is responsible for driving consistently high renewal rates even during the past six consecutive seasons when the Lakers haven’t made the playoffs.

Los Angeles Clippers

Gillian Zucker
President of business operations
Zucker runs the day-to-day business operations of the team and is very effective in growing the Clippers brand.

Scott Sonnenberg
Chief global partnerships officer
The former longtime Chicago Bulls executive joined the Clippers last year and it hasn’t taken long for big sponsorship deals to follow, such as the new practice facility naming-rights deal with L.A.-based tech company Honey.

Jason Green
VP, ticket sales and service
Green leads the ticket sales for the Clippers in an era of fast growth for the team that has seen season-ticket sales double this season from last season.

The two teams stand not only as a boon to basketball fans in L.A., but for the NBA overall as the league looks to both big-market franchises to help drive interest and TV ratings. The Lakers have a league-high, 43 games on national TV this year, while the Clippers will have a franchise-record 26, third most in the NBA. Network and league executives are banking on the star power of both teams. 

“It helps build excitement for the NBA globally,” said Amy Brooks, president of the NBA’s team marketing and business operations division and the league’s chief innovation officer. “It’s great for the people of L.A. who will have the chance on a nightly basis to see great brands and organizations, and it’s an opportunity to have an impact globally.”

From a media perspective, the Lakers have a national brand akin to the Dallas Cowboys in the NFL and the New York Yankees in MLB. Even during the Lakers current playoff drought, the team was “useful to us from a TV perspective because of the brand and the built-in fan base,” said Burke Magnus, ESPN’s executive vice president of programming and scheduling. “We like the Clippers because of L.A. We love the moves they’ve made from a player personnel perspective. They have a dynamic, enthusiastic, visionary ownership, which bodes well for how they continue to build their brand. But the Lakers are a brand that you can go many, many years without seeing significant erosion.”

Each team employs far different business strategies.

The Lakers, despite having not reached even the conference finals since winning the second of back-to-back titles in 2010 and encountering offseason drama over the departure of Magic Johnson as team president, bank on their 16 NBA titles and their legacy brand under owner Jeanie Buss. The Clippers, under the deep-pocketed and deeply committed Ballmer, stand among the league leaders in innovation as they continue to gain traction in the market.

L.A.-based tech company Honey put its name on the Clippers’ newly renovated practice facility in a multiyear deal.
Photo: getty images
L.A.-based tech company Honey put its name on the Clippers’ newly renovated practice facility in a multiyear deal.
Photo: getty images
L.A.-based tech company Honey put its name on the Clippers’ newly renovated practice facility in a multiyear deal.
Photo: getty images

Since Ballmer bought the troubled Clippers five years ago from Donald Sterling in a league-forced sale for $2 billion, the team has been busily transforming itself to reflect its aggressive and ambitious owner, who pushes business performance.

“It was really about aligning the organization with Steve’s kind of personality and goals and cultural objectives,” said Gillian Zucker, the team’s president of business operations. “And I think that we’ve done that, this tremendous amount of storytelling around our brand, which we began the moment he bought the team, but had been investing in pretty considerably over the years. And really focused on the idea of doing things our own way.”

The Clippers are building on their momentum. Last year they went 48-34 and reached the playoffs for the seventh time in eight seasons before losing in the first round to the Warriors in a six-game series. After adding Leonard and George, they have doubled their season-ticket base this year from last year and have a 96% season-ticket renewal rate, though the team declined to offer specific sales numbers.

Despite the increased demand, the Clippers continue to sell partial and half-season ticket packages to drive business.

“It’s really about accessibility,” Zucker said. “That’s what our brand is about. We want everyone to be able to have access to support our team and be a Clippers fan. And if you really want to broaden your appeal and make your game available to as many people as possible, our strategy is that selling as many season tickets as possible might not be the way to do that.”

The Clippers also are pushing ahead with plans to build a privately financed $1.2 billion arena in Inglewood to open in 2024. It’s a key strategy to move out of the Staples Center, which they share with the Lakers, to allow the team to further define itself while controlling its own dates and increasing revenue.

“This is a very determined, hungry, humble, optimistic, innovative culture,” Zucker said. “And we are being very strategic in our approach as to how we can grow this brand into something that’s admired and draws in community, not just here in L.A., but across the country and around the world.”

From increasing the sale of tickets, signing sponsorships from brands new to the sports industry, and using new innovations such as the augmented reality, customized game streaming system CourtVision, the franchise isn’t afraid to push technology.

“It’s this idea of doing things that are disruptive and dramatic, and things that many people, when the vision was shared, thought wasn’t possible and finding a way to get it done,” Zucker said. “I think that is the core of what the Clippers stand for, and this leveraging of technology to create Clippers CourtVision is an example of it.”

Over the last 18 months, the team has nearly doubled the number of its sponsors and increased revenue by 35%.

A notable new deal this year is one with L.A.-based tech company Honey that serves as the team’s first naming-rights agreement for its renovated practice facility. The deal also includes putting the company’s logo on the Clippers’ practice jerseys and is the first in sports for Honey, which builds tools to help people save time and money when shopping online. It dovetails in strategy with the Clippers’ jersey partner Bumble, the online dating platform where women have to initiate potential interest, that also had never done a sports deal prior to its Clippers agreement.

“Certainly last season we had our best year in marketing partnerships ever,” Zucker said. “And we will again this year. And I think that that’s the goal, regardless of what the roster looks like. I mean, we work for Steve Ballmer.”

This year, the team also signed its first cloud computing deal with Amazon Web Services that is incorporated into its CourtVision streaming product.

“I think that the culture we have built here is very attractive to a lot of brands,” Zucker said. “Honey is an example of it. These were the types of brands that see themselves aligned with what the Clippers stand for. Very hardworking, innovative, committed to being better tomorrow type of organizations really want to embed themselves with an organization that shares those values.”

The Clippers’ trade for Paul George will team him with NBA Finals MVP and free-agent signee Kawhi Leonard.
Photo: getty images
The Clippers’ trade for Paul George will team him with NBA Finals MVP and free-agent signee Kawhi Leonard.
Photo: getty images
The Clippers’ trade for Paul George will team him with NBA Finals MVP and free-agent signee Kawhi Leonard.
Photo: getty images

Branding experts also see a big opportunity for the Clippers to have their on-court identity better reflect the team’s turnaround in the market.

“For so many years they had been a sleepy franchise and their on-court identity does not yet reflect the seismic shift in the franchise,” said Todd Radom, a longtime branding executive who has worked with various teams and leagues. “Hype is one thing. They have to win.”

Despite all that’s changed with the Clippers, the front office is quick to put up a guardrail around all the progress.

“We have made great strides,” Zucker said. “But we have a lot more work to do before we achieve the ultimate goal. We haven’t done anything yet and we keep kind of pointing to really what this organization is all about, is that our goal is to create a sustainable championship franchise, and we’re not there.” 

While the Clippers and the Lakers share the same arena, they operate in their own business orbits.

Even with the recent on-court futility, the Lakers continue to be an off-court powerhouse that stands near the top of the league in most business metrics. Before landing James in free agency in July 2018, the Lakers hit the market the previous February with season-ticket renewal invoices that included a 6% price increase. This came after a 26-56 record in 2016-17 and amid a season in which the team would finish 37-45.

“We had no guarantee of LeBron,” said Tim Harris, president of business operations for the Lakers. “In the marketing package that we sent out with renewals, we didn’t use the words ‘free agency,’ and we didn’t use the words ‘cap space.’ We didn’t use the word ‘come July 1,’ or any of that.”

The Lakers still posted a 99% renewal rate. 

“So then LeBron comes in July and by then we’ve already infilled the 1%,” Harris said. “So when
LeBron comes in July from a ticket standpoint, what’s left is some house seats. So there wasn’t like, ‘Oh my gosh, LeBron’s here. There’s all this tremendous lift.’”

This year, the story remains the same.

“So now, February of 2019, we’ve got LeBron, of course,” Harris said. “We haven’t made the playoffs in six years. We go out with renewals. Obviously, it’s the young guys and LeBron — 99% renewal.”

Anthony Davis joined the Lakers in a massive trade that sent three players and three first-round draft picks to New Orleans.
Photo: getty images
Anthony Davis joined the Lakers in a massive trade that sent three players and three first-round draft picks to New Orleans.
Photo: getty images
Anthony Davis joined the Lakers in a massive trade that sent three players and three first-round draft picks to New Orleans.
Photo: getty images

Then the team traded for Davis in a blockbuster deal, but there was no significant shift in the Lakers’ marketing — particularly as the team comes off its first season with James that helped sell out the Staples Center, bring a 28% increase in local TV ratings, an 18% increase in the team’s season-ticket waiting list, and add more than 7.5 million social media followers.

“From 90,000 feet you ask, what’s the business effect of direct to the Lakers with LeBron and AD?” Harris said. “OK, we’ve been renewing really well with season tickets because we had the young core and it’s entertaining and there’s a demand. Because there’s an ardent fan base. Our TV deal’s got 20-odd years left. We’re good there. The radio deal has got a few years remaining, don’t need to worry about the radio deal. Our patch deal has one year left. So a lot of this stuff is locked in.”

As the season begins, so too is both team’s role as title contenders. For the Lakers, that marks as return to their accustomed status in the league’s hierarchy. For the Clippers, it’s a rare position that figures to be increasingly common in the years ahead. But both teams will continue to concentrate on their own bright futures. 

“We’re not focused on the Clippers,” Harris said. “And I suspect the Clippers are focused on the Clippers.”

First Look podcast, with more on the NBA's upcoming season, at the 19:25 mark:

Staff writer John Ourand contributed to this report.