New Articles

FROM FACTORY TO FINALS: THE SUPPLY CHAIN OF A BASKETBALL

basketball

FROM FACTORY TO FINALS: THE SUPPLY CHAIN OF A BASKETBALL

The Rebound

It’s been a long journey to the NBA finals. The 2019-20 NBA season went on hiatus on March 11, and it was not until June that the NBA’s Board of Governors and Players Association finalized plans for 22 teams to return under stringent health and safety protocols and accompanied by measures to promote social justice. Even the ball the referee threw into the air for the opening tip-off on September 30 took a long journey before arriving at the “bubble” in the middle of Walt Disney World where the finals are being held.

Though not from Harlem, an official NBA basketball is itself a Globetrotter, the product of a supply chain that spans North America, Japan, China, Malaysia and Vietnam. Not unlike the sneakers worn by the Los Angeles Lakers or Miami Heat, basketballs are part of a global network of designers, suppliers, manufacturers, distributors and retailers. Kentucky-based Spalding, which has had exclusive rights to make NBA basketballs since 1983, depends on efficient cross-border logistics and exacting quality control to ensure consistency and performance.

Pick (Peaches) and Roll

Things started out a lot more simply. On December 1, 1891, in Springfield, Massachusetts, Dr. James Naismith hung two half-bushel peach baskets at the opposite ends of a gymnasium and set out 13 rules for “basketball” to his students at the International Training School of the Young Men’s Christian Association (YMCA), which would become Springfield College. From 1891 through 1893, a soccer ball was used to play the game.

The first basketball was manufactured in 1894, was made of laced leather, and was about four inches larger than a soccer ball in circumference. At the request of Naismith, it was created by Albert Goodwill Spalding, a former pitcher for the Boston Red Stockings and Chicago White Stockings, who had founded his namesake sports equipment company in 1876.

The inaugural season of the NBA did not come until 1946-1947. Chicago-based Wilson got the nod to make basketballs for the league from 1946-1983. In 1983, Spalding was given the exclusive rights to make NBA basketballs, but those rights will pass back to Wilson at the start of the 2021-2022 season. More on that to follow.

For now, Spalding is responsible for getting those orange pebbled-leather balls to the 30 NBA teams. What does that process look like? This piece from ESPN outlined the journey of a basketball from the factory to the finals, described below.

Globtrotting Basketball corrected

Following the Game Plan

Operating out of Chicago, Horween Leather Company is one of the oldest leather tanneries in the United States. Horween receives about 3,000 cowhides a week, largely from slaughterhouses in Iowa and Ontario, Canada. The hides then go through a three-week process of hair removal, tanning, embossing, finishing for color, durability and feel, and finally drying. A 1,000-ton press with German-made embossing plates gives the leather its distinctive pebbling. Each basketball takes about three to four square feet of leather. Four to five times per year, roughly 10,000 square feet of leather gets shipped to a manufacturing facility in China where balls are assembled.

Inside each ball, nylon winding made in Japan forms the outside of an inflated bladder (the balloon-like structure that holds air), adding structural integrity and durability. The inner sphere of the ball is covered with rubber from Malaysia and Vietnam. Eight leather panels are glued together by hand.

Once the balls are finished, they travel via ocean to Alexander City, Alabama for a three- to four-week testing process, where the balls must pass diameter, weight, and rebound checks. The NBA ball must be inflated between 7.5 and 8.5 ounces per square inch, and when dropped from six feet, the basketball should bounce 52-56 inches high.

In 2006, the NBA committed a flagrant foul and tried to implement polyurethane leather basketballs. The composite material was viewed by the sporting goods industry as the next new thing and the balls were less expensive to produce than real leather balls. However, the new feel and the difference in rebound height led the NBA Players Association to file two unfair labor practice charges with the National Labor Relations Board. The NBA quickly went back to real leather.

China NBA Viewers

That’s the Way the Geopolitical Ball Bounces

While the contract with Spalding still had two years to run, in May 2020 the NBA announced that Wilson would be the official game ball starting in 2021-2022, the league’s 75th anniversary season. In the press release announcing the upcoming partnership with the NBA, Kevin Murphy, the General Manager of Wilson Basketball said, “Our commitment to growing the game of basketball on the global stage is at the heart of Wilson and our new partnership with the NBA.”

Of course, China is of major strategic importance to advancing that global growth. More than 600 million viewers in China watched NBA content during the 2017-18 season. Tensions between China and the NBA flared in fall 2019, when a tweet from a Houston Rockets executive supporting Hong Kong’s pro-democracy protesters prompted China to blackout NBA broadcasts and streaming in China.

Game three of the 2020 NBA finals coincided with the one-year anniversary of the tweet. While the finals had been streaming on China’s Tencent, state broadcaster CCTV’s decision to televise game five of the finals marked the first NBA broadcast in the country in over a year. Meanwhile, the NBA continues to face scrutiny for its relationship with China, which was only heightened in the summer of 2020 following reports of abuse at NBA-run Chinese basketball academies.

The league continues to try to navigate these issues, aware that there remains tremendous interest in the NBA in China and huge financial opportunity. Similarly, Wilson Basketball’s Murphy noted, “We have to perform in the U.S., but the growth will come from global sales. We have a presence in China, which is a very fragmented market (for basketball sales) and a big opportunity for us.”

Wilson in China

Outside the United States, Wilson currently has rights to the Canadian Collegiate Athletic Association, the Basketball Champions League in Europe and the National Basketball League in Australia. As part of the deal with the NBA, Wilson will also be the official game ball of the Basketball Africa League.

Interestingly, while current NBA ball rights holder Spalding is owned by Fruit of the Loom (which is owned by Warren Buffet’s Berkshire Hathaway), the Wilson brand is part of Amer Sports Corporation, a Chinese-owned Finnish sporting company.

Jump Ball

Wilson has said that its NBA balls will have the same eight-panel configuration and that it will continue to source from the Horween Leather Company, which is already the sole supplier of leather for Wilson’s official NFL game balls. Other U.S. and global supplier decisions are unclear. Mindful of the 2006 synthetic ball fiasco, Wilson has said its engineers and product designers would work with NBA players to develop and approve the new basketball.

The new game ball will be introduced in fall 2021 for retail sales. The NBA and Wilson both hope their partnership will be a slam dunk, with trade bringing the pebbled ball to basketball courts around the world.

______________________________________________________________

Leslie Griffin

Leslie Griffin is Principal of Boston-based Allinea LLC. She was previously Senior Vice President for International Public Policy for UPS and is a past president of the Association of Women in International Trade in Washington, D.C.

orange economy

THE ORANGE ECONOMY – WHERE CREATIVITY IS AN ECONOMIC ASSET

Our economic potential is limited only by our collective imaginations – the right hemisphere of our brains applied to both creative and quantitative endeavors.

Orange, the Color of Creativity

You’ve heard of the green economy and the blue economy. Now, researchers are taking a closer look at the so-called “orange economy”. With no set definition, the core of the orange economy encompasses a wide array of cultural and creative goods and services from architectural design and performing arts to film, games, fashion, music and video games.

Creative goods and services include art you can hang on your wall, print newspapers and crafts, but also works that are “experienced” such as gastronomy and live music. Beyond the physical realm, they include gaming apps on your phone, advertising on TV, and streamed movies. The infrastructure that supports our interaction with creative goods and services are also part of the orange economy, such as stadiums, fiber-optic networks and museums.

Capturing the Value of Creative Output

A 2015 analysis by Ernst & Young presented in their report, Cultural times, attempts to quantify the value generated by cultural and creative industries in the orange economy. It suggests the global industry generated $2.25 billion in revenue, supporting 29.5 million jobs in 2013. At the time, the creative economy exceeded the value of the global telecoms services industry and the entire GDP of India – and this was before the digital streaming boom.

Value of Creative Industries
The Asia-Pacific region accounts for more than one-third of global sales and 43 percent of jobs associated with cultural and creative industries. Visual arts and television broadcasts accounted for nearly 40 percent of the value generated by the industry and 35 percent of jobs. Other parts of the industry such as newspapers and book publishing employ more people but generate less revenue.

The report credits cultural and creative output as driving the online economy’s rapid growth. Sales of e-books, music, videos and games generated $66 billion in 2013. Content sales in turn drove sales of digital devices and subscriptions to online media and streaming platforms and the advertising on them. Ernst & Young estimates creative content yielded $22 billion in advertising revenues in 2013 for online media and free streaming websites such as YouTube.

These figures have probably grown exponentially in subsequent years. Consumer appetite for greater bandwidth and faster networks available on smart, portable devices appears insatiable, and the figures do not include billions in online ticket sales for performances, or all the additional revenue and jobs accruing to creative professional service providers such as digital advertising and media agencies.

Beyond the numbers, nurturing talent in the cultural and creative sector is important to economic development and growth. The industry is characterized by relatively fewer barriers to entry and digital opportunities now abound for creators to grow their business by acquiring a global reputation and audience. Cultural and creative industries tend to employ more youth and women and can offer more flexible work environments.

For example, American artists are 3.5 times more likely to be self-employed than U.S. workers overall. On the downside, many of the associated jobs are gigs – or temporary work – and remuneration might rely heavily on acquiring and asserting intellectual property rights. Without sustained work that is well compensated, creative and cultural work may fail to provide a source of reliable and adequate income.

A Culture of Trading

The beauty of trade in creative goods and services is the ability to enjoy tremendous cultural diversity, ingenuity, and have shared experiences as a global community. When K-pop and K-beauty burst on the scene, everyone could dance Gangnam-style or slather snail slime on their face. Beyond the cultural enrichment, policymakers have noticed the boost to the GDP bottom line of exporting cultural and creative offerings.

The UK is known for world-famous video games. One of its most notable exports is Grand Theft Auto 5, the fastest-selling video game of all time, which grossed $1 billion worldwide in its first three days. The UK government launched a $6.2 million Prototype Fund to help video game start-ups and pledged another $6 million to support a Skills Investment Fund for training in this and other creative sectors.

Canada has long offered tax credits to attract film and video production. An Ontario Music Fund provides grants to address investment gaps in its live and recorded music industry.

Latin telenovelas and music attract global audiences. The many World Heritage sites in Latin America built upon ancient Inca, Maya or Aztec civilizations are magnets for tourism exports (when visitors spend money in your country), supporting both local and national economic development while sharing the region’s rich cultural history.

Orange stroke of paint

Modern and traditional African art, sculpture and music hold wide appeal and are featured in global concerts and festivals. Nigeria’s government supports its film industry (“Nollywood”) which has become the country’s second-largest employer, generating export earnings and tax revenues.

Deploying a different model, Dubai in the UAE has created a cottage industry of hosting international cultural events, boasting the region’s largest indoor exhibition space. The UAE also opened the Louvre Abu Dhabi in 2016 to serve as a focal point for contemporary art in the Middle East and invested $136 million in the Museum of the Future, which showcases futuristic inventions but is also positioned as an incubator for global design innovation.

Colombian President Iván Duque even campaigned on supporting growth of creative industries and set a goal of expanding production and exports to grow Colombia’s orange economy from 3.3 percent to 10 percent of Colombia’s GDP, putting it roughly on par with the manufacturing industry. He held an auction during which more than 320 investors bid on $124 million of “orange bonds” issued by Bancóldex backed by a triple-A rating.

Getting Paid for Creativity in the Orange Economy

To enable these industries to thrive, governments must shore up their legal frameworks to protect cultural and creative intellectual property from theft. Goods and services in the creative economy usually hold a distinct intellectual property claim, so that when an author or creator exports it, they retain some form of ownership on which to compensate them for use or enjoyment of the work. A developer in the Ukraine or Colombia, for example, would be entitled to receive a royalty each time their copyright-protected and licensed software is downloaded anywhere in the world.

Simply having appropriate intellectual property laws on the books, however, will not be sufficient to protect many creative works. In a survey by the Inter-American Bank, just 34.8 percent of creative entrepreneurs in Latin America and the Caribbean had made some effort to register their rights to intellectual property or obtain a copyright. Of the total of entrepreneurs, 17.4 percent responded they had not done so because they considered it “very expensive,” and another 16.4 percent said they did not know the procedures for getting the registration.

Although the survey was limited to one region, this is likely a familiar refrain globally, including in the United States where creators are familiar with rights available to pursue but find it too costly to obtain representation and navigate complex intellectual property laws. In some industries, creator organizations such as collective management organizations (CMOs) in the music industry, help overcome such challenges by manage licensing and distribution of royalties and remuneration to its member artists. More could be done by governments to help their creators avail themselves of intellectual property protections.

IP in LA for Creatives

An Infinite Economic Asset

Protecting author and creator rights is critical to fuel industry growth and provide returns to authors and creators, particularly as digital platforms expand. Although such platforms enable them to reach global audiences, creators must adopt new business models and strategies to monetize amidst a sea of free content on internet intermediary platforms. Another challenge is that such platforms remain immune from liability despite hosting entities that traffic in products that violate copyright and other intellectual property rights protecting their creative goods and services.

It should also be mentioned that when it comes to cultural and creative experiences, digital and virtual are not forcing the extinction of an analog experience. Before COVID-19, New York City’s Broadway was achieving record sales. World class museums like the Guggenheim and cultural zones like West Kowloon Cultural District in Hong Kong attracted their share of visitors. The Comic Market in Tokyo still drew global fans of Japanese manga and anime.

my visual

Put On Your Thinking Cap

Creativity is rapidly becoming a condition for competing in the globalized economy. It has become among the top ten skills sought by employers. The application of creativity is not limited to cultural goods and services. Scientific creativity drives the pursuit of new ways to study, experiment and resolve societal problems. Creative thinking is applied to design new products, new production processes and commercial practices.

Ernst & Young analysts point out that the world is young – and that young population is increasingly literate, has more means and a global outlook. If policymakers view creativity as a significant economic asset, and nurture and protect it as such, countries can leverage creative output to support jobs and growth.

And – if we can manage to protect freedom of expression and the ability to trade in cultural and creative works – we can simultaneously promote cross-cultural experiences, preserve traditions and heritage, and celebrate diverse aesthetics, which might just make our world more civilized.

___________________________________________________________

Andrea Durkin is the Editor-in-Chief of TradeVistas and Founder of Sparkplug, LLC. Ms. Durkin previously served as a U.S. Government trade negotiator and has proudly taught international trade policy and negotiations for the last fifteen years as an Adjunct Professor at Georgetown University’s Master of Science in Foreign Service program.

This article originally appeared on TradeVistas.org. Republished with permission.

Consumer Insights and Collaboration to Boost E-commerce Incentives

China’s largest social commerce platform, Taobao Marketplace, and Bilibili, a leading online entertainment platform, confirmed a business collaboration to focus on, “content-driven e-commerce and commercialization of Bilibili’s intellectual property (“IP”) assets,” (EIN).  The company’s will do this by utilizing consumer insights while integrating the platforms and the visibility between content creators, merchandise, and users.

Chairman of the Board and Chief Executive Officer of Bilibili, Rui Chen commented:

“This business collaboration with Taobao is a remarkable testament to Bilibili’s commercial potential and closely aligns us with China’s leading and most successful e-commerce platform,” said Mr. Rui Chen, Chairman of the Board and Chief Executive Officer of Bilibili. “We can now leverage Taobao’s gigantic platform and seasoned e-commerce operating capabilities to further help our content creators realize and improve their commercial values, thereby building a more-virtuous content community and commercialization-focused ecosystem.”

“Through this collaboration, we will better incentivize the creativity of our young people and will utilize each other’s strengths and resources to generate more premium content. We look forward to working with Taobao to fulfill the tremendous entertainment and consumption needs of the young generations in China, and importantly, in turn, we look forward to increasing the value we bring to all of our stakeholders,” he said.

With the resource sharing that automatically comes with the collaboration, both companies are enabled to better understand consumer needs as well as how to tap into potential markets.

“Early in 2015, Taobao rolled out a program to encourage bloggers, writers and online experts to post content on various channels on Taobao, to amplify the value of creative content. Over 1.6 million content creators, including anime, comic and games (ACG) experts, were actively supporting the Taobao App and helping brands on our platform engage with consumers,” said Fan Jiang, Vice President of Alibaba Group and President of Taobao. “Through deep cooperation with IP holders and content creators, Taobao has experienced the great potential of ACG. We greatly value Bilibili’s unique online hub themed around ACG, and appreciate “Gen Z” demographic expertise and believe there is a great, natural synergy between us. Together with Bilibili, we are devoted to tapping into the significant business value of this coveted demographic and bringing rich content and products to the young generations.”

Source: EIN Presswire

Deluxe Opens Post-Production Facility in France

Burbank, CA – Media and entertainment services provider Deluxe has opened a new post-production facility for audio and dubbing services in France.

The new Deluxe facility is located in the Saint-Cloud area, just west of central Paris and features five ADR stages, two 7.1 theatrical mixing stages, and a 5.1 mixing stage. 

Deluxe offers comprehensive localization, post-production, distribution and asset-management solutions for media and entertainment around the world.

It’s parent, Deluxe Entertainment Services Group Inc., provides production and post-production services for film, video and online content, from capture to consumption.

Founded in 1915, Deluxe has worked with Hollywood studios, independent film companies, TV networks, exhibitors, advertisers and others, offering best-in-class solutions in production, post-production, localization, distribution, asset and workflow management and new digital solution-based technologies.

With operations in Los Angeles, New York and around the globe, Deluxe employs nearly 6,000 professionals worldwide. The company is a wholly owned subsidiary of MacAndrews & Forbes Holdings Inc.

08/08/2014