The NBA will open an office in Russia after the league approves the purchase of the New Jersey Nets by Russian oligarch Mikhail Prokhorov, which is expected this spring. The league has been interviewing executives for a managing director position for the Russian office, which will most likely be in Moscow as the NBA continues its push to grow internationally.
"Basketball lags far behind soccer and hockey in terms of popularity, but a well-known brand like the NBA in a very undeveloped sports market has huge potential," said David Watts, head of GSC, a Moscow-based sports consultancy. "No one here has really attempted to commercialize sport, and the NBA obviously has the wherewithal to accomplish that. This is a very specific market, and if you bring in several Westerners that have the marketing chops but don't understand the culture, you would end up spinning your wheels with nothing to show for it."
The NBA is not planning a Russian spin-off similar to its NBA China entity that includes outside investors. The NBA has long had a television deal in Russia, but now wants to develop the game on a grassroots level. The NBA has conducted youth basketball camps in Russia with former NBA all-stars A.C. Green and Scottie Pippen.
Indeed, Kalmanovic was unusually casual about his personal safety for someone who had for so long navigated post-Soviet capitalism. American businessman David Watts, head of the Moscow-based Global Sports Consulting, said he was struck by the lax security in a meeting at Kalmanovic's office earlier this year. Meeting Russian tycoons face-to-face, after all, can often involve security arrangements evoking Checkpoint Charlie.
"It was a pretty open environment," Watts said. "There weren't any heavy security checks when we met him. He didn't seem like a man particularly concerned with his safety."
Kalmanovic explained his laid back approach to security to a Russian newspaper earlier this year: "There's no one for me to be afraid of." There was, however, a small exception. "There are no windows in my office -- that's just a simple precaution," he said. "It's just safer that way."
Putin's persuasive presence at the 2007 IOC vote in Guatemala City helped Sochi edge Pyeong Chang, South Korea, for the 2014 hosting rights. Even if the world economy deteriorates further, and the price of oil continues to snorkel below $70 a barrel (the minimum at which the government balances its budget), Russia is sure to find a way to pay for the Games because of the national pride at stake. "There's tremendous pressure from Putin on down to make this happen," says David Watts, a U.S. sports marketing consultant based in Moscow. "Putin himself recently approved changes to the Alpine cluster. It never should have gotten to him, but people are so paranoid, they're afraid the IOC will say they're doing something wrong and take the Games away."
The huge sports budgets fuelled by burgeoning corporate revenues of recent years are likely to be scaled down significantly next year, said David Watts, a sports marketing consultant at Global Sports Consulting.
"In Russia, most teams are not closeto making a profit, but are supported by rich owners that are fans of the sport and are essentially vanity projects," Watts said, adding that budgets have mushroomed in recent years.
David Watts, an international sports consultant based in Moscow, said large football stadiums are always hard-pressed to make money, and that a well-run concession program with beer sales can help recoup some of the operating costs.
"But the authorities have decided that security concerns should trumpcommercial interests, which makes sense, since profit is rarely adriving force behind sports venues in Russia," Watts said.
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