Blog Entry

Inside the Knicks' presentation to LeBron

Posted on: July 2, 2010 1:06 am
Edited on: July 2, 2010 1:29 am
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Getty Images Forbes Magazine hits us with a pretty stunning scoop : the PowerPoint presentation the Knicks gave LeBron James Thursday morning, provided by a New York marketing firm, Interbrand.

The cliff notes? LeBron can make a billion dollars in New York, for sure. He might be able to in Chicago. He can't in Cleveland or Miami. So naturally, he should come to New York! He has the highest potential earnings through the entirety of the contract by nearly $300 million more than the runner-up, Cleveland. The core of the message is this: It's not just about a bigger market. It's about New York's market specifically, and that's where the money is .

Okay, that's the short story. Here's the full monty. We're going to walk you through the slides step by step to point out some relevant factors. I'd definitely take a long read through that Forbes article and the accompanying PowerPoint:

Slide 1: Don't know if that picture of LeBron is the best you could have used. He doesn't look majestic; he looks like he's scared of some monster chasing him from behind. But a smart move pulling a picture of him from Team USA. No brand attachment to Cleveland and it prompts the memories of how Kobe Bryant was a bigger deal in China in 2008 because of the championships.

Slide 2: Some backside kissing of James and the work he's put in, and then the exposition of the study's intent. This is our first big revelation of the study. Interbrand examined four teams for the study, based on estimated market impact: the Knicks, the Bulls, the Heat, and the Cavs. Notice who's missing there? The Nets. There is no mention of the Nets throughout the entire presentation, despite the very frontal attack the Nets have laid on the Knicks as the key to the New York market. With all of the extraneous business opportunities the Nets are offering James through their move to Brooklyn in 2012, this could be a huge mistake. James and company had just gotten through listening to the Nets pitch when the Knicks came in and completely ignored the team that had been in the building twenty seconds before, and whose minority owner is a close friend and mentor to LeBron. Comparing New York to the other markets is a great idea. Ignoring an attempt to differentiate between the Knicks and Nets was a mistake that easily could have been rectified.

Slide 3: Provides a background to Interbrand and what they were attempting to focus on with this study. "Lifetime earnings" is a key factor. This entire study is built upon the concept that James' next stop is his last.

Slide 4: Methodology of what Interbrand looked at and how they modeled it. It's a conceptually strong slide, even if it doesn't actually provide examples of how it quantifies factors (like the post-retirement economic models of players like Wilt Chamberlain and Reggie Miller, especially when outside of Michael Jordan, those players considered really can't be compared to LeBron's theoretical revenue stream). Then again, I sincerely doubt James is going to be looking for them to provide their formulas and double checking with his own advanced statistics team.

Slide 5: A nifty graphic that illustrates the data movement that helps Interbrand quantify brand strength. Interesting stuff. If you're a marketing executive in New York with an emphasis on sports. Literally dozens of people are captivated.

Slide 6: A look at revenue streams analyzed for the presentation. Interestingly, it starts with International "partnerships' which are differentiated from sponsorships. Only local endorsements are considered. Which is particularly odd since it doesn't at all go after the "in the Internet age, anyone can build an empire from anywhere" argument. The entire presentation is built on busting that concept, and the study deftly avoids it. It's hard to say if that's a strength or weakness of the presentation.

Slide 7: Interbrand's assumptions for the study: A. James will play till he's 38 (unlikely, and given the exponential year over year balance is a significant factor, kind of an important one, B. James is finishing his career with the next team he signs with (yes, because the one thing in the NBA is that things always work out as both teams think they will when they sign) and C. the model is built on the current CBA model. This makes sense given the impossibility of predicting the next CBA and that NBA salary represents such a small amount of impact on the results of the study.

Slide 8: Four factors considered in the analysis. The key take away here are on the final two points. Championships are most important, but winning a championship matters more in certain markets than others. And secondly, and this is an odd one, the longer a franchise goes without a championship, the greater the impact on the player that gets them there. This fails to consider the historic impact of previous championships. It also seems like a pretty custom tailored argument for New York (more so than the rest of the presentation). "Sure, we haven't been relevant in thirty years, but that's a good thing!"

Slide 9: A numbers breakdown. Clearly, New York outperforms the others. An interesting note, among interesting notes, is how high Cleveland ranks on these measures, despite market size, which is a key element of the rest of the study. Also, the franchise impact of the Knicks is over four times as great as Chicago . This despite Chicago having had the greatest player of all time inside of 15 years, having a massively popular merchandising brand, and operating in a major market. That the Knicks are more powerful is no shock. That they are that much more powerful is kind of stunning for a team best known in recent history for Jeff Van Gundy holding a guy's leg and John Starks getting worked by Reggie Miller.

Slide 10-13: Team by team breakdowns of the four factors and relevant takeaways. Cleveland is relevant based on the "hometown hero" concept. The study clearly is aimed not at trashing Cleveland (and offending LeBron), but taking out the rest of the competitors and looking better than Cleveland overall. Chicago and Miami bear the brunt, as Chicago is considered too volatile thanks to Jordan's shadow, and Miami is basically tossed aside as irrelevant.

Slide 14: Conclusion: "Knicks rule!" Basically, if James wins a championship and he's in New York, that's the optimum situation for him to make the most money and expand his brand the most. It's not a particularly stirring conclusion considering the Knicks both requisitioned and presented the study, but it doesn't exactly come off as the most in-depth, objective analysis. Then again, when Mike D'Antoni's also telling you he can help you average a triple double, it probably sounds pretty good.

Slide 15: No, thank you , Interbrand.

All in all, the Knicks did a good job of finding data that attacked its competitors while not coming off as tyrannical or arrogant. It simplifies the argument while providing evidence to support the common sense argument. "New York is better." The Knicks needed to prove to James that concept was sound while pitching him on the basketball side with D'Antoni. It's a fascinating insight into how this free-agency period is being played by the teams who are brokering with this monstrous class of players.

-Matt Moore




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Comments

Since: May 15, 2010
Posted on: July 3, 2010 12:57 am
 

Inside the Knicks' presentation to LeBron

Just kidding. The Knicks are amazing and will get LeBron. But I'm a Cavs fan, so I probably will kill myself before he plays the first game as a Knick.



Since: May 15, 2010
Posted on: July 3, 2010 12:56 am
 

Inside the Knicks' presentation to LeBron

The Knicks suck



Since: Jul 2, 2010
Posted on: July 2, 2010 1:20 pm
 

No data to support conclusions

This New York Knicks powerpoint presentation is really desperate and embarrassing.  I like how they come to conclusions with no data to back up anything.  If Lebron has any intelligence he will see through this nonsense.  Interesting to see how the calculations conveniently put the Bulls and Heat in 3rd and 4th place even though Cleveland is the 4th largest market of the 3.  They also assume that a championship in New York is 4x more valuable than one in Chicago just because of the population, but they don't factor in that there are more sports teams in New York competing with the Knicks, who have not been good in a long time.  Also this study fails to support this assumption with any facts.  How about looking at the attendance rankings as a way of measuring the strength of the fanbase.  The Bulls continued to sell out the United Center long after Michael Jordan retired.  Have the Knicks ever had a continuous sell out streak?  How about worldwide brand strength?  The Bulls are overwhelmingly the most recognizable of the 4 franchises, largely because of Michael Jordan and the 6 championships in the 90's.  If Lebron wants to become a billionaire it will be because of the strength of his global brand.  This presentation only looks at the impact of a championship in that particular city.  There are 500 million Chinese that buy basketball shoes.  Who is number 1 in China?  LeBron? No. Kobe. Why, because he has won championships.  Who do you think has better brand recognition globally, the Knicks or the Bulls?  When did Frazier win the last Knick championship. 1973?  The Bulls?  6 in the 1990's  Do you think the world will remember 1 championship from 1973 or 6 from the 1990's.  The only thing the world remembers about the Knicks was that they kept getting beat by the Bulls in the 1990's and how Charles Smith kept getting his shot blocked in that playoff game in 93.

The biggest flaw in that pathetic power point presentation is that it curiously fails to rank the franchises on the chances that they will win a championship now with the current roster.  All those favorable Knicks statistics won't mean a thing if they can't win a ring.



Since: Dec 3, 2006
Posted on: July 2, 2010 12:08 pm
 

Inside the Knicks' presentation to LeBron

The "threshold" to establishing a legacy point is interesting.  If Lebron goes to the Bulls, he'll have to deal with the Jordan legacy.  In NY, his nearest competitor is Clyde Frazier.
Look at the Lakers.  Kobe wins title number 5 and who is on the floor holding the trophy?  Magic.  No matter what Kobe does, the Lakers will always be Magic's team.  Same with the Bulls belonging to Jordan.


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