12 January 2024

(Bloomberg) — The National Basketball Association Inc.’s African league, which counts former US President Barack Obama as a strategic adviser, is facing mounting losses as it seeks to build a following in the region, sometimes resorting to bussing in fans to help fill empty seats.

The Basketball Africa League, now entering its fourth season, is the NBA’s sole professional league outside the US, and its most ambitious international expansion since it attempted to break through in China two decades ago on the coat-tails of Hall of Fame center Yao Ming.

While the league has had some successes, the complexities of running an operation in multiple developing economies across a continent have proved challenging. Football remains by far the most popular sport in the region, limiting basketball’s appeal, and some teams have struggled to pay players on time. As the BAL plans to expand this year, money raised from investors in 2021 is running out, according to people familiar with the league, who asked not to be identified while discussing non-public information.

Amid the league’s struggles, a number of executives have recently left NBA Africa, including its first chief executive officer, Victor Williams, who stepped down in December after three years in the job.

“We view both NBA Africa and the BAL as long-term investments and are encouraged by the success and the growth of both initiatives since their launch a few years ago,” NBA Chief Operating Officer Mark Tatum said in comments provided by the league’s press office.

It’s unclear how much help the league has received from Obama, who has a minority equity stake in the venture. A spokesperson from his office declined to comment.

Roughly 10,000 spectators crammed into the sold-out BK Arena in Kigali, Rwanda, in May to watch teams from Egypt and Senegal battle for the championship in the third season of the BAL. At the far end of the court, a rotation of DJs, cheerleaders and artists performed to Afrobeat rhythms on a makeshift stage. Fans in the audience included Rwandan President Paul Kagame, actor Forest Whitaker, former NBA player Luol Deng and Tatum.

The apparent success of the tournament was a far cry from NBA Africa’s initial foray into the continent. The first court sent to an NBA facility in Senegal ahead of its launch in 2018 was eaten by termites after the shippers failed to treat it properly, according to people familiar with the situation.

Tatum said the court issue was quickly resolved and didn’t have any real impact on the operation of the NBA’s basketball academy there.

The NBA’s interest in Africa is unsurprising. The region has consistently produced famous players, most recently the reigning MVP, Cameroonian Joel Embiid, and the league has sent its athletes on diplomatic missions to participate in exhibition games there as far back as 1971.

Playing for the NBA on their home turf also gives African players a greater chance to get scouted and drafted by US teams. Currently, each BAL team has a roster of 12 athletes, of which eight must be locals. Two can come from other African countries – a team from Guinea can also have a player from Mali and one from Ivory Coast, for example – and two can be from anywhere in the world.

Last year, Zaire Wade, son of Dwyane Wade, a former star guard for the Miami Heat, signed with the Cape Town Tigers in South Africa.

“That’s the beautiful thing about the BAL. It’s providing another avenue for players to live out their dream,” said Pops Mensah-Bonsu, a former NBA player of Ghanaian descent who’s now president of G League Operations for the New York Knicks. He remembers when being an Africa-born basketball player was synonymous with “raw” and “unskilled.”

That perception has long shifted, thanks to players like Embiid and Congolese Hall of Fame center Dikembe Mutombo. Deng, who used to play for the Miami Heat, is now president of the South Sudan Basketball Federation, leading his country to become the sole African nation to qualify to compete in basketball at the 2024 Paris Olympics.

The NBA is seeking to foster new talent with a campaign to make the game more accessible in the region. In 2022, the NBA country head in Nigeria, Gbemisola Abudu, said in an interview with ESPN the league’s goal is to build 1,000 courts across Africa by 2032.

“To date, we’ve built or renovated more than 100 courts in more than a dozen countries,” Tatum said. The NBA has never announced the 1,000 court target, according to its press service.

The BAL is a partnership between the NBA and the International Basketball Federation, the global governing body for basketball. After three seasons, losses at the league were forecast to rise to $19 million in the 2024 financial year from $17 million a year earlier, according to an NBA presentation from November seen by Bloomberg. Revenue was projected to grow to $15 million from $8 million, the presentation said.

Tatum disputed those figures and said the league doesn’t disclose specific financial information.

In 2021, investment firm Helios Fairfax Partners Corp. and former players including Mutombo and Deng acquired an 8% stake that valued NBA Africa at $1 billion. Obama also backed the league.

The $75 million raised has been largely exhausted and some investors are frustrated with the lack of progress in developing the league, according to two of the people.

NBA’s Africa sales are a rounding error for the US franchise, one of the world’s most profitable leagues that brings in around $10 billion in revenue annually.

By some metrics, its African business is expanding. Attendance grew by 51% last season, with more than 40,000 fans attending the 30 group phase games, according to the BAL. In November, the NBA announced the addition of South Africa as a fourth tournament destination; it will host 12 games in March.

But stands at many group stage games were virtually empty last year. At higher profile games, or when local teams played, fans were often bussed into the arena and offered free food to attend, according to some of the people. The NBA said it provided free transportation and tickets to a limited number of youth and community groups.

Some BAL teams during the 2022 season paid salaries late, only in part, or not at all, according Chadrack Lufile, who played for Senegalese team DUC in 2022. His account was confirmed by eight other players, who asked not to be identified out of fear of being excluded from participating in the league.

Lufile said he had a contract for $7,000 a month to play the three-month season and has yet to be paid the full amount owed. He was offered a settlement of $10,000 total, according to documents he showed Bloomberg.

“There were guys on my team who didn’t receive a dime, but are too afraid to speak up and lose the chance to play in the BAL,” he said.

Lufile, who played for the Sioux Falls Skyforce in the NBA G League and represented the Democratic Republic of Congo at the FIBA AfroBasket tournament, said he was “shocked” to see players going unpaid, with some having left teams in Europe to join the league. He joined Ivory Coast’s ABC Fighters last season.

DUC’s former club president El Hadji Mapathé Touré, who signed the agreement with Lufile, declined to comment. The current president Maimouna Fall referred questions regarding players’ salaries to Touré. The NBA said teams are independently owned and operated.

The NBA also has faced criticism for its close relationship with Rwanda, where President Kagame’s regime has been accused of widespread human rights abuses. New York-based Human Rights Foundation said that NBA Africa’s incoming CEO Clare Akamanzi, who previously headed the state-run Rwanda Development Board, raises concerns that the league will further strengthen relations with Rwanda and enable sportswashing to improve the country’s reputation.

The group wrote to NBA Commissioner Adam Silver in 2021 and 2022 requesting the league not to play games in Rwanda due to Kagame’s suppression of political dissent. Tatum responded that there are no US restrictions on doing business in Rwanda, according to a copy of the emails Human Rights Foundation provided to Bloomberg.

“Partnerships with sporting brands such as the NBA have delivered real improvements to the lives of Rwandans through increased investment and tourism,” a spokesperson for Visit Rwanda, the country’s tourism board, said by email.

At a news conference held during the 2023 finals in Kigali, Visit Rwanda, which is a founding partner of the BAL, estimated league games brought nearly $10 million in additional revenue to Rwanda’s economy via hotels, tour operators, marketing and event planning companies. That compares to $113 million in revenue last year from gorilla trekking and safaris.

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