The NBA Is ‘Open for Business,’ Looks to Invest In More Startups

Kim Bhasin, Bloomberg News

NEW YORK, NY - MARCH 12: An NBA logo is shown at the 5th Avenue NBA store on March 12, 2020 in New York City. The National Basketball Association said they would suspend all games after player Rudy Gobert of the Utah Jazz reportedly tested positive for the Coronavirus (COVID-19). (Photo by Jeenah Moon/Getty Images) , Photographer: Jeenah Moon/Getty Images North America

(Bloomberg) -- The National Basketball Association is looking to actively gain equity stakes in more startups globally as the league formalizes its investment arm and looks to grow its portfolio.

Chief Financial Officer David Haber said in an interview that the league is “open for business” to consider deals through its new NBA Equity division. It’s searching across categories including apparel, fitness, media, merchandising, fantasy sports, fan engagement and sports betting.

“It made sense for us to be more proactive,” Haber said. “That’s why we’ve structured our efforts.”

The NBA has nearly 20 companies in its portfolio, according to a person familiar with the matter, who asked not to be named because the information is private. The value of all those equity stakes put together is approaching $1 billion, the person said.

Over the past decade, the NBA has dabbled in investments but had taken a passive approach, pursuing deals only when it stumbled upon opportunities. That needed to change, said Haber, which prompted discussions between the league office and team governors. Earlier this year, the league started this new program, hired startup accelerator veteran David Lee to run it and entered talks with venture capitalists. Executives said the NBA isn’t a pure financial investor and only looks at businesses that could improve the league.

“Our goal is to be a strategic investor, so we have to have it be relevant to the NBA and make the product on the court and off the court elevated,” said Lee, vice president and head of NBA Equity.

Management is focused on early-stage rounds but Haber said they have a mandate to look at larger late-stage deals if they make sense. Recent investment recipients include New Era headwear, Sportradar data analysis, Sorare fantasy gaming, Zigazoo’s kids’ social network, Nextiles smart fabrics and event-management firm QuintEvents.

“If there’s a strategic fit, we’re able to look at companies at different points,” Haber said. “Taking an equity stake and being an owner in companies, that’s dramatically accelerated.”