NBA pushes to tap Africa’s young, new smartphone users

More than 40% of the region’s population is aged 15 and below.
Image: Bloomberg

The National Basketball Association.’s plan to tap African fans and new players in the world’s most youthful continent spurred billionaire Prem Watsa-backed private equity firm to invest in the franchise at a valuation of $1 billion.

Helios Fairfax Partners took a small stake in the US sport’s African entity last year — at first glance a curious choice for a firm that has broadly focused on telecoms through Helios Towers Plc or gas stations via Vivo Energy. Yet the opportunities for growth of the sport are huge, chief executive officer Tope Lawani said in an interview.

“That investment in many respects encapsulates some of the points that we’ve been making about demographics and technology,” the 50-year-old said. “Africa is the only place where the population of young people is actually growing. That’s where the people are who might play these sports.”

The growth on the continent of smartphone use and affordable high-speed internet is also key to spreading the game, according to Lawani.

The more than 40% of the region’s population aged 15 and below is set to drive demand of mobile-based content, according to the latest GSMA report on the mobile economy of sub-Saharan Africa. Mobile service subscribers will probably increase to 615 million in the region over the next three years, from about 495 million in 2021, according to the report.

“More affordable technology has made the continent a much more relevant market for the consumption of content and products,” he said.

Obama, Whitaker

Helios is the largest investor in the project outside the NBA itself, and has been joined by some notable names including former US President Barack Obama, whose father was Kenyan, and Forest Whitaker, who won an Oscar for playing Ugandan dictator Idi Amin in the 2006 movie ‘The Last King of Scotland’.

A host of former players have also signed up, including Grant Hill and Dikembe Mutombo, who was born in the Democratic Republic of Congo. Luol Deng, born in what is now South Sudan, is also a stakeholder.

“When you look at the NBA 20 years ago, you had probably two, maybe three players that were of African descent,” Lawani said. “Today, the number is more than 50.”

He went on to clarify he meant players born in Africa or with African-born parents.

The NBA will spend some of the cash raised from the venture to build infrastructure such as offices, courts and stadiums in Africa, Commissioner Adam Silver said last year. The organisation is also a collaborator on Basketball League Africa, a 12-team tournament featuring representatives from around the continent that’s about to start its second season.

Affordable content

Africa’s consumer market is growing, Lawani said, with new technology bringing varied and cheaper options to basketball fans keen to follow the NBA.

The only way to sell US basketball broadcasts as recently as four or five years ago was through an expensive full-service satellite TV service — unaffordable for the vast majority of Africans, the CEO said.

“Now with smartphones, you don’t have to watch 90 minutes of a football game, or all four quarters of a basketball game,” he said. “You can watch highlights, you can watch a delayed content, you can watch just goals, on a smartphone at a price that you can actually afford.”

© 2022 Bloomberg

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