The NBA team has an excellent marketing department that would be used in marketing the WNBA franchise.

You work in the marketing department for an NBA franchise in a major metropolitan city. Your owner is considering pursuing the rights to a WNBA franchise for that city. The owner asks you to make a recommendation on whether or not he should pursue this opportunity. The following are some of the variables that you need to consider.Your owner made his money in the technology sector of the economy. He has lost a great deal of money in that business over the past year in the decline in the stock market. His NBA franchise has done extremely well and has been valued at $250 million, but the owner borrowed a great deal of money to purchase the team and uses most of his revenue to pay off the debt. 

The NBA team has an excellent marketing department that would be used in marketing the WNBA franchise. In terms of hiring a full-time marketing staff, there is a university within 45 minutes of the city that has one of the premier sport management programs in the country. The NBA team is playing in a facility that was just built three years ago, and that is where the WNBA team would play. The team does not own the arena, so if the WNBA franchise is started, it would have to pay rent for use of the facility. That rent would be significant but the team gets to keep all sponsorship revenue from the facility. The NBA–WNBA connection has the potential to approach sponsors with WNBA and NBA sponsorship packages. 

Of the 50 Fortune 500 clubs in the area, none has ever sponsored women’s sport teams or events. But those companies have sponsored other professional sport organizations and events.The metropolitan city is a big sports town. It not only has an NBA franchise but also NFL, NHL, and MLB teams. It also has six Division I athletic departments, a minor league hockey team, and a women’s professional soccer league team. The baseball team has a strong following as it plays in a state-of-the-art retro stadium. It is also located one hour from beach communities, and there are several minor league teams within an hour’s drive of the city.

It should also be noted that, according to the Sporting Goods Manufacturers Association, this metropolitan market has 25,000 females who describe themselves as being basketball players, and 1,350,000 people who classify themselves as basketball fans (no distinction between males and females). The average income in the city is $42,000.As far as the WNBA is concerned, attendance has increased by 10% over the past year, but still teams are averaging 8,000 fans per game. The league controls players’ contracts, so the payroll expenses are lower than expenses for other sport leagues. But still only two WNBA teams last season turned a profit. Both of those teams were in similar types of markets, but it took them four years to turn that profit.

ASSIGNMENT: Use a SWOT analysis (please see SWOT handout) for the situation presented. Provide the internal strengths and weaknesses as well as external opportunities and threats. Ultimately, what would you recommend to the team owner? Is pursuing the rights to a WNBA franchise in this case a good move for the potential owner? This LA is worth 2 points of your total course participation grade.

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