Lavar Ball: The New Era of Ownership

What many may interpret as misguided may prove to be the smartest business move in modern sports.

  /  06.22.2017

Since the ascendance of Michael Jordan, the NBA has transitioned from being a prominent American sport to a multibillion-dollar global entertainment industry.

From iconic buzzer-beaters and mid-air acrobatics to storied rivalries and six world championships, Jordan made the NBA primetime. As MJ stepped into the ’90-’91 season, the NBA inked a four-year deal with NBC worth $601 million per year, later rising to $892 million annually in 1994.

Then, in 1996, an undersized shooting guard named Allen Iverson entered the NBA. Just as Jordan amplified its entertainment value, A.I. transformed the image and attitude of the league. It was a timeless transition into Iverson’s eminent impact, personified by the moment when he left Jordan on skates with a mean crossover during his rookie season.

It was because of Iverson that players started rocking braids, long shorts, tattoos, arm sleeves and untucked jerseys. Kids like me were wearing wristbands to school, regardless of the outfit. The entire style and look of the league changed because of him, and he spearheaded the league’s shift into a new era of cultural relevance to match its primetime appeal.

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Adding a shortlist of other notable greats like Kobe Bryant, Kevin Garnett, and LeBron James, NBA players went from all-star athletes to mainstream celebrities — the first modern breed of pop culture superstars to transcend the court. Along with this newfound level of cultural capital came an influx of lucrative endorsement deals. As witnessed with Jordan’s landmark Nike deal, top players began signing life-changing contracts with sneaker brands, which would ultimately generate more earnings than they would ever make on the hardwood.

Although these multi-million dollar agreements would place players on the Forbes list, the contracts were devoid of the comparable equity needed to legitimize these athletes as owners of their influence, or the boss of their own brands. Meanwhile, the NBA continued cashing out on the increased popularity of its superstars.

By 2007, the NBA entered a $930 million per season deal with ESPN. In 2014, the league announced a staggering 9-year, $24 billion television deal with ESPN Turner, tripling the total annual amount within seven years. Further, as the top stars continued shining brighter over that period, their prices continued going through the roof. The endorsement deals players landed off the court became exponentially larger than their NBA contracts.

Here’s a little perspective on how much players are raking in through sneaker endorsements:

If Jordan was the owner of his brand, he’d be a multi-billionaire, standing amongst the likes of Mark Zuckerberg, except presumably richer. He brings in $90-$100 million per year off of the Jordan Brand, while the company brings in $2 billion. Nobody, I repeat NOBODY, was buying Under Armour sneakers prior to Steph Curry. In fact, they didn’t even have a 1% market share of sales. That is, until the Golden State Warriors standout and two-time league MVP shocked the world with a legendary season that propelled his team to a championship. If Steph is worth equity in the entire Under Armour company, could you imagine if he owned 50-70% of his own brand? If Nike is willing to offer LeBron a billion-dollar lifetime deal, might that mean King James is worth ten times as much?

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Bryant and Iverson are easily among the NBA’s top 10 greatest players. Their shoes were the hottest on the market; imagine if they had ownership over their brands? Aside from shoe endorsements, all of these players made tens of millions of dollars through NBA contracts spanning their entire careers. Meanwhile, the teams they played for brought in billions every year. Again, the star athletes end up with a fraction of what they’re worth to the organizations making billions off of their backs. Critics complain when players make demands for more money after record-breaking seasons or arriving at free agency, but their skills are the reason both brands and franchises are filling seats and selling product for billions upon billions of dollars. Meanwhile, the players are getting merely a fraction of their worth.

Now, we have Lonzo Ball. The one-year phenom who declared for the NBA draft after averaging 14.6 points, 6 rebounds, and 7.6 assists as a point guard at UCLA. Despite his team suffering a loss to Kentucky in the NCAA tournament, Ball is still projected to be a top-three pick, even capturing the interests of longtime Laker legend and newly appointed Head of Basketball Operations, Magic Johnson.

Having a high projection in the draft made him a prime prospect for sneaker endorsements. However, his highly opinionated father has been dominating headlines with an unconventional approach to managing his son’s promising future. Instead of striking partnerships with inquiring brands like Nike, Reebok and Adidas, Lavar Ball denied offers and developed his own business model, launching the self-owned Big Baller Brand. This comes as a shock to a sports community used to seeing athletes sign landmark endorsements before the first day of training camp.

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A Nike consultant called Lavar “the worst thing to happen to basketball in the last hundred years.” When it was NCAA tournament time, Lavar Ball stole the show due to comments he made about Lonzo’s ability to beat Jordan one-on-one in his prime. Charles Barkley commented saying, “I wish he would let his kid shine.”

Lonzo’s Big Baller Brand recently unveiled the $495 ZO2s, which sold about 500 pairs in the first week. Big Baller Brand is also selling $220 ZO2 Signature Slides, along with the $995 Z02: Wet which are autographed in gold and come with an LED-lit display case. Their first week sales grossed over $290,000, according to LA Times. This of course, does not include manufacturing costs.

As if the man isn’t ambitious enough, Lavar Ball has also started his own junior league that will serve as an alternative to the NCAA. He will pay each athlete $10,000 per month, and prep them for the NBA and professional ball overseas. Considering the fact that players are more than aware of the thievery of college sports, it’s not too far fetched to imagine the colossal success of Lavar’s junior league. It’s hard to say how many kids will realistically go play for free knowing they’ll want to leave in a year. Add in the option to get paid to play, and perhaps attend school in the off-season and you’ve got a recipe that can shake up college sports.

Critics are calling Lavar and Lonzo Ball stupid for turning away the textbook endorsements that bring guaranteed money, instead choosing to invest in something that may not work out. But, if past players could go back in time, do you think they wouldn’t own their own brand? The Ball family has chosen a road less traveled, for a shot at building their own empire. What many may interpret as naïve, arrogant, or misguided may prove to be the smartest business move in modern sports.

“We’ve said from the beginning that we are not looking for an endorsement deal, but they’re not ready for that because they’re not used to that model. But hey, the taxi industry wasn’t ready for Uber, either.” – Lavar Ball

We hail moguls like Jay Z and Diddy for taking destiny in their own hands, and building businesses that lead to generational wealth. Currently, both men boast nearly a billion-dollar net worth individually. That would not have been possible without taking ownership of their influence, forming their own enterprises, and doing the groundwork to see their vision manifest to unimaginable levels. Instead of signing to record labels for a fraction of their worth, they became aware of one simple fact: they are the product. The same concept applies to Lonzo Ball. Ownership is more important than taking the temporary check. While the Big Baller Brand marketing and PR can drastically improve, the premise and the principal is perfect. In fact, it’s genius.

Suppose Lonzo Ball becomes one of the next NBA greats. We have no way of knowing right now, and if he does become a superstar, his earning potential will eclipse anyone we’ve ever seen. What if Lavar’s junior league actually takes off after a few All-American decide to take that route? We could literally be witnessing the beginning stages of an economic shift that frankly, could play a key role in empowering a community. Imagine a sports industry that couldn’t devalue its star athletes, and has to treat them as partners instead of employees. Are you shaking with anticipation yet?

In 2017 and beyond, ownership is key — owning your time, your products, and ultimately your future. We’ve seen the surge of entrepreneurship across various industries. Countless examples of people successfully building their own brand instead of elevating someone else has empowered onlookers to leave the sidelines and get in the game. Gone are the days of people subscribing to the idea of needing permission to be great. We’re all trying take our piece of the American pie. So, as we each continue the process of achieving our own American dream, it doesn’t make sense to discredit Lonzo Ball and his father for doing the same.

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