3 Takeaways - NBA Deputy Commissioner Mark Tatum:  On the Future of Sports, Sports as Entertainment, Enhancing the Audience Experience and How the NBA Engages over 2 Billion People (#67)

Episode Date: November 16, 2021

NBA Deputy Commissioner and Chief Operating Officer Mark Tatum shares on the future of sports, enhancing the audience experience, virtual reality, gaming and e-sports.People are interested in what their favorite athletes and teams are doing off the court as well as on. Mark shares how entertainment driven strategies enhance the overall experience while growing the audience. Under Mark’s leadership, the NBA has formed NBA Africa, launched NBA Academies around the world, and created the Jr. NBA Global Championship.In 2016, Mark was named to Forbes’ list of the Top 25 Most Influential Minorities in Sports.

Welcome to the Three Takeaways podcast, which features short, memorable conversations with the world's best thinkers, business leaders, writers, politicians, scientists, and other newsmakers. Each episode ends with the three key takeaways that person has learned over their lives and their careers. And now your host and board member of schools at Harvard, Princeton, and Columbia, Lynn Thoman. Hi, everyone. It's Lynn Thoman. Welcome to another episode. Today, I'm excited to be with Mark Tatum, Deputy Commissioner and Chief Operating Officer of the NBA. Basketball has become one of the world's major global sports. One of the trends in sports is entertainment-driven strategies. It's no longer about just winning a game on the court.

It's about entertaining and engaging people. It's about both growing the audience and enhancing the overall experience. Different sports have different strategies, from megastars singing at the start of physical sporting events to high-octane intermissions and shows. Beyond the latest game or score,

people are interested in what their favorite athletes and teams are doing off the court as well. And there is also the metaverse and world of esports and gaming. I'm excited to find out how Mark sees the future of basketball, esports, gaming, virtual reality, and entertainment-driven strategies to engage and enhance the audience. Mark has a multicultural and international background. He's the son of a Chinese mom who grew up in Vietnam and a Jamaican dad. He was born in Vietnam and grew up in the US.

He previously worked as a marketing executive for Pepsi, Procter & Gamble, and Clorox, and then he moved to Major League Baseball, where he was responsible for corporate sponsorships. He then took a similar job with the NBA and did such a great job that he was promoted to Deputy Commissioner and Chief Operating Officer. One of his many successes has been expanding the NBA League's international footprint. Welcome, Mark, and thanks so much for our conversation today. Lynn, thank you so much for having me. It's a pleasure to see you. It is my pleasure, Mark. Mark, what do you love the most about basketball?

The thing I love the most about basketball, Lynn, is it's just a simple, easy-to-understand game. And it's a game that is accessible to all. I grew up in Brooklyn, New York, and in my neighborhood, our basketball court was not that close. The nearest schoolyard was several blocks away. But I remember some of my most fond memories around the game of basketball

is as a child on these late summer nights, we would actually take a milk crate, cut the bottom out of the milk crate carton and put it up and tie it to the lamppost. And we would play till all hours of the night during the summer. And those are some of my most fond memories of the game of basketball that you don't need to have a full court. You don't even need to have a basketball hoop. You can be creative with it. And that's the thing that I love about this game. What do you see as the major trends in basketball and in sports?

I think the major trend around the game of basketball is just accessibility and participation. Because it's so easy to understand, because it's so accessible, we're seeing growth not only here in the U.S., but around the world. And it's a game that's being played by boys and girls, which opens it up to everybody. And again, I think because of the advent and the popularity of our players, who are some of the most recognizable people and athletes in the world, it creates this demand and it creates this interest in the game of basketball. And so what we're seeing is the participation rates, again, not only outside the United States,

but inside the United States continues to grow because it is a safe, healthy sport to play and it's accessible to everybody. The other things that we're seeing around the game of basketball is that it teaches you such great life lessons. It teaches you how to be a team player. It teaches you resilience. It teaches you the benefit of hard work because you can actually see your work paying off. The more times you practice shooting free throws, as an example, the better you get at it. And so those are some of those important life lessons that parents want to instill in their kids. And that I see even as adults now playing the game of basketball, those things really do translate into your everyday life. Of the four major US sports, soccer, basketball,

football, and baseball, soccer is, and always has been international, but football and baseball remain almost entirely US sports. How did you succeed in making basketball and the NBA global? I think it really started in the early days of the game of basketball, Lynn. Our game was founded by a Canadian, Dr. James Naismith. Now, he founded in Springfield, Connecticut at a YMCA. But as part of the YMCA, he was on this mission to export the game around the world.

And the roots, for example, of the game of basketball go back to China back in the late 1800s, shortly after the game of basketball was created. Back in the early 1900s, 1921, I believe, the Chinese had an Olympic basketball team that participated in the Olympics. And so because of his mission to expand the game of basketball around the world, it got exposed to different countries in different areas around the world. And it's been exposed for over 100 years in many, many countries. And so I think that helped contribute to it where the game was not necessarily viewed as an American sport, but it was viewed again, when you look at China, for example, it's viewed as a Chinese sport because people have been playing it now for over a hundred years in the country. And so it's endemic to countries around the world. But I think the other reason

it's so popular, Lynn, is because what we talked about earlier, which is the accessibility of the game. It doesn't require a lot of infrastructure. It doesn't require a lot of space. You can play the game indoors. You can play the game outdoors. And you can play by yourself

or you can play with 10 people on the court at the same time. So I think that flexibility allows for the game to grow and develop and be played around the world, which is why it's so popular. And then what I'd say is in more recent years with the advent and the accessibility of the game through different forms of digital media and traditional media, it's exposed people even more to the game, which has led to elite athletes in particular markets around the world aspiring to play in the NBA. And then those players have now inspired a whole new generation of young people who want to eventually play in the NBA and take up the game of basketball. So the Yao Ming's of the world, the Hakeem Olajuwon's of the world,

these players, and now the Giannis Antetokounmpo from Greece, they're inspiring the next generation of young people in these countries to take up the game of basketball and to want to follow in their footsteps to play in the NBA or the WNBA. Mark, how do you compare basketball to other sports such as soccer? Soccer is the most popular sport in the world. It's a global sport, as you mentioned earlier, and a lot of the same characteristics, right? Just easy to understand, accessible, a little bit different in that it's harder to play in small spaces. It's not as fun to play by yourself in soccer, but a lot of great characteristics

around the game, the health and safety benefits as well. But again, I think the game of basketball is a sport that is equally played by boys and girls around the world. And I think there's no stigma, for example, of girls playing basketball. We have a women's professional basketball league, as you know, the WNBA that is increasingly also becoming more international. And so we've now created this opportunity for elite young ladies to aspire to play professionally and make a living playing the game of basketball, a game that they love. And so, again, our game has a lot of amazing benefits to playing the game of basketball that keep you healthy, keep you fit, and teaches you some great life lessons. How do you see the future of international basketball and the NBA?

The future of international basketball is bright. When you think about our fan base alone, there are, for example, China, 300 million fans of the NBA in China. That's more, almost as much as the entire population of the United States of America. And so when you think about the number, the vast billions of people outside the United States and outside of North America that are potential fans of the NBA and potential players in the NBA, that talent pool. We think that the future is just limitless, quite frankly, for the opportunities for the game of basketball around the world. One of the areas

that we are focused on right now is Africa, a continent with a billion people, fast-growing economy, a young population. And in basketball, we launched our first ever league outside of North America, the Basketball Africa League this year, and tipped off in Rwanda, where we brought 12 teams from 12 different countries into Rwanda to compete in this first ever African league that we've been involved in. And so just a tremendous success. And we're seeing also there the inspiration that that league in Africa is providing to the youth of the continent. And we're seeing participation numbers starting to tick up there. And the thing that we're most proud of is we're starting now to show sports as a potential to drive economic opportunities, to drive jobs, to drive economic growth in these different countries. Normally,

sports in Africa is viewed as competition, and it is a competition. It wasn't necessarily viewed through this business opportunity lens, but we've seen in the United States and we've seen in Europe and other parts of the world that sports is a big driver and provides the fuel for growth of retail development and commercial development around arenas and infrastructure. And so we're now seeing projects like that pop up land in Africa. For example, in Kigali, Rwanda, there's a brand new arena that was built there in anticipation of a league like the Basketball Africa League and NBA games coming over there. And around that arena development now, they're building retail development and commercial development and residential housing. And it's really becoming the epicenter, if you will, of Kigali, similar to what the Staples Center has done in downtown LA.

And we've seen other projects like that arena developments that help drive economic opportunity in a particular area. That's so exciting. How do you think about sports and entertainment and how do you think about enhancing the experience for your audience? It's something that we're so focused on. In a lot of ways, sports is entertainment. We all have just a limited amount of time in our day and how we use that free time, how we use that leisure time. there are more and more demands on each and every one of us and opportunities for each and every one of us to spend that free time that we have, whatever that time seems to be shrinking every year and every day and every month. And so the competition for that time, whether it's movies, whether it's short form content and platforms like TikTok or Instagram.

Those are all things that are consuming people's times. And sports is a big part of that. And so for us, we have to always make sure that our game continues to be relevant, continues to be fun, continues to be exciting, continues to be engaging. Otherwise, people are going to, like I said, people have too many choices or have a lot of choices right now on how they spend their time. And our job is really focused on making sure that we can put forward the most compelling game, product, experience, making it accessible to as many people as possible in a fun and

exciting way. How do you keep people engaged with the NBA and basketball, both on and off the court? I think there are so many great stories in our league, and I think it's telling those stories. I think people like relating to hearing about the players, hearing about some of the challenges that they had to overcome to achieve this incredible level of success, hearing about the hard work that they put into becoming the best at what they do and giving people inspiration and hope that if they put in the hard work, no matter what they decide to do, that they can also achieve a high level of success. I think it's those stories. I think it's exhibiting the fun that people have in competing

and the joy that our players, for example, have of playing this wonderful game of basketball and showcasing that in a way that get people excited about it. And so I think it's all those kinds of things and then making it accessible, Lynn. So we have to be where people are. I mentioned those platforms of TikTok and Instagram and social media. We have on the NBA now more than 2 billion followers, likes through all forms of social media amongst our teams, amongst our players, amongst the league. And all those things are designed to engage fans. And no matter what platform you are using or what kind of content you are creating, whether it's short form, long form, we want to be there. And we want to be there telling authentic stories about our league and that people can relate to. And so that's all the ways that we're going about doing that.

Two billion people engaged with the NBA is phenomenal. Congratulations, Mark. Thank you. Thank you. Our players are some of the most engaging, popular players from a metric standpoint on social media. Our teams are, the league is. And so we're so fortunate to have people, again, the 2 billion followers and likes around the world who are interested in what's going on with the game of basketball and the players primarily who are involved in it. Can you break down that 2 billion

to give a sense of how those people are engaged with the NBA? Yep, about 70% of them are outside the United States. And so what they're doing is they're viewing content and they are following the video highlights from games. They're following off the court content that's posted by our players and by the league. When Steph Curry warms up, for example, and he's taking shooting practice and he's making ridiculous circus shots that people have never seen before. Those are the kinds of things that behind the scenes access that spikes engagement and gets people saying, wow, that's really an incredible feat.

But it's also our game content. People love watching the highlights of the games. I think our game really is ideally suited for those clips and those amazing highlights and those amazing moments in a particular competition. And so when you can extract some of those moments, put them out in the universe through social media, it really does elicit strong reactions. Are there any particular platforms that are more important than others? Where are you getting most of those 2 billion followers from? It's across the board, Lynn.

It's across the board. It's across Facebook. It's across Instagram and Snapchat and TikTok. You name it. And many of the international platforms too, the Tencent, the ByteDances, the Kuaishou in China. So it's all of these different platforms around the world that is making that content available to our fans, no matter what platform they're on. And so there are clearly some of the

platforms have higher engagement than others, but within those platforms, the NBA sees a disproportionately high number of engagements compared to the other content that's placed on those platforms. And the 2 billion people, those are for the NBA and all the individual teams? Correct. And the players as well. So it's the NBA family between the league, the teams and the players. Nice way to think about it as the NBA family. How do you see esports and virtual basketball? Well, esports is a very important opportunity for us. Our NBA 2K game is one of the most popular games in the world. Something like over 110 million games have been sold on NBA 2K. And so

here you are, you have this really engaged audience of people who love playing this video game, and that translates into fandom. And so what we did is we decided that we wanted to create a league around that. And when you think about the opportunity around esports and the accessibility of that, you need what I'd call athletic ability, but it's a different sort of athletic ability to play in esport, in an e-game, right? It includes some other forms of dexterity, if you will, but you can play it virtually everywhere. And what we've seen is, and we're seeing that now, is we're seeing the growth of esports internationally. And in this NBA 2K League that we launched, we've got now 23 teams and it features each team. And these are professional players, Lynn, who are actually paid

to compete in this league. And they play five on five in a variety of regular season games, tournaments, and playoffs. And our goal is to make this league truly a global league. We actually added a team from China. We recently announced that we're adding a team that will compete in Mexico. And we're talking to teams as we speak in places like Europe and other places in Asia and Australia about joining this NBA 2K League. And again, the beauty of this will be truly a global league. And we're doing it now where Chinese teams are competing against Mexican teams, competing against U.S. teams. And there are very few opportunities now where you can do that because of the barriers of travel.

But in this virtual esports world, you can actually do that because of the barriers of travel. But in this virtual esports world, you can actually do that, which is bringing our world really closer together and creating a community of these gamers who are competing with each other around the world. So interesting. The video game audience, as you know, has surpassed in revenues the film industry and the music industry combined. How important a source of interest in the NBA do you think that these video gamers or e-gamers will be? Very important. As you mentioned, the demographic of these gamers, these many times are not people who are watching traditional television. They're consuming their content digitally. For example, our games, our NBA 2K games, we stream those games on Twitch, as an example,

which is the big platform for video games and for gamers to follow. And I will tell you that when you look at our audience, the playoffs of those games were up 33% in terms of unique views per stream. We had over a million unique viewers that watched the 2021 finals of the 2K League. We've had more than 2 million combined followers on social media platforms, Facebook, Twitter, Instagram of the NBA 2K League. And then just to give you another sense of the context here, the NBA 2K League alone, that content has generated more than 518 million video views,

518 million video views across all of our NBA and 2K League social media platforms. So that includes Facebook, Twitter, Instagram, Twitch, YouTube. So this is a really important driver of how people are engaging with the NBA and being where they are, right? Being on those platforms where these gamers are with an NBA 2K lead product and game, it's really driving engagement amongst that generally hard to reach audience. And probably a very different audience from the people who attend games in person. It is. That's the great thing also about the NBA is you have these young gamers and you also have attendees, people in the C-suite who love the game of basketball. So it really is a game that appeals to every type of demographic, every age group, every gender. And I think that's one of the reasons that the game of basketball is as popular as it is. Mark, you've thought a lot about

leadership as the chief operating officer of the NBA. How do you think about leadership? I think leadership is one of those things that in a lot of ways you learn with experience. I've been working now since I graduated from undergrad for about 30 years, and I've had the opportunity to work for people that I considered amazing leaders. And I've worked for people where I said, okay, I'm going to try not to do that. And so I think it's an evolution, if you will, of your experiences. The one thing that I've found has been so effective is being able to listen, being able to truly, truly listen, to truly, truly observe. And I always take the time to understand from people to get their ideas and to get their thoughts and to get their concerns, because there's a lot of really smart people out there.

And I try to learn from those people and adapt to the things that I'm hearing and incorporate that into my style. I think respect is also an important attribute of leadership. You need to respect people to be able to truly hear them and to be able to get them to listen to you. If someone doesn't respect you because they don't feel like you respect them, you're never going to have a productive conversation or have the ability to accomplish a whole lot together, whether it's with a partner or whether it's a colleague. And so I think those are some of the important things that I've learned along the way about leadership.

Before I ask for the three takeaways you'd like to leave the audience with today, Mark, is there anything else you'd like to mention that you haven't already touched upon? Well, the only other thing I'd like to mention about the NBA specifically is just the things that we've done and our players have done around having an impact in the communities that they are involved in. The NBA has a long history of really standing for certain principles of equality, of inclusion, of diversity, and really walking that talk, going back to the early days of Bill Russell or Kareem Abdul-Jabbar or Oscar Robertson. These were role models for generations of people, including today's players and athletes across all sports who stood up for what they believed in, who stood up for racial equality. And I think today's players, as an example, have carried on

that tradition. And there have been several things that we have done as a league collectively with the Players Association over the last several years. And really in this last two years, so in terms of establishing an NBA foundation, which was a $300 million commitment over 10 years by our 30 teams in partnership with the NBA Players Association that would help create opportunities and economic opportunities for the Black community and creating jobs. And we've already issued millions of dollars of grants to organizations that are helping to bridge that wealth gap in the Black community. We also established a National Basketball Social Justice Coalition that was done, again, in conjunction with our players and the Players Association to then try to support legislation and enact change in different areas that are important. So civic engagement and voting rights and criminal justice reform. And we've gotten behind through that coalition, different federal legislation and local legislation

that would actually make change and affect change in these different areas. And so it's such an important thing for individuals, for corporations to organize resources in these areas to make the United States and to make the world a better place. So that's the one thing I would say I wanted to make sure that we covered off in this time together. And I know, Mark, that that's been very important to you and that you have led the NBA's social justice task force. Yes, thank you, Lynn. Yeah, you know, as you mentioned at the beginning, my dad is Black and my mom is Asian. And so I'm fortunate that I've had opportunities in my life to get a great education, to get great jobs. And I just want to make sure that organizations are doing their part, individuals are doing their part to make sure that that opportunity exists

for everyone in this country. Mark, what are the three takeaways you'd like to leave the audience with today? As I think about some of the important things that have been important to me and my life and my career, the three takeaways are one, invest in relationships, whether that be personal. I've got a fantastic family, my lovely wife and our two sons and my immediate family. We're really tight. And I think it's important that you invest in relationships, not only personally, but also at work with partners because of some things that we talked about earlier, having a really good understanding of where other people are coming from, trying to

put yourself in other people's shoes, and really listening can benefit you in so many ways and benefit your organization or benefit your family in so many ways. So invest in relationships. The second thing is think global. And I've had that experience now with the NBA of being able to travel, work outside the United States and see the impact and the power that a game like the game of basketball can have on communities, whether that is, like I said, driving economic opportunity in Africa or bringing people together that otherwise wouldn't come together around something as simple as the game of basketball. So it's a big world out there, but it's getting smaller. And I think we all need to start thinking globally and the impact that we have on others around the

globe. And then the last thing is adapt and innovate. The world is changing rapidly as we speak every day, every minute, every hour. And I think it's important that for us as leaders, we have to continue to understand that and continue to adapt, continue to innovate, think outside the box, don't get set in. This is how we've always done it. Always think about how can you do things better? How can we evolve? How can we really focus on fans, customers, consumers, whoever your target audience is, try to listen and understand from them so that you can make the necessary adaptations that you need to make either in your own personal style or in your corporate approach. So those are the three takeaways I would have.

Mark, thank you so much for our conversation today. I come away with a new appreciation for you and all you've done for the NBA and for basketball. Thank you so much, Lynn. It was a pleasure talking to you today. If you enjoyed today's episode and would like to receive the show notes or get new fresh weekly episodes, be sure to sign up for our newsletter at 3takeaways.com or follow us on Instagram, Twitter, and Facebook. Note that 3takeaways.com is with the number 3. 3 is not spelled out. See you soon at 3takeaways.com.