BUSINESS PLANS

Hoop Dreams: New League Banks on Sisterhood

A look at a women's basketball league that is banking on grassroots marketing and worker solidarity.
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Upstarts

COMPANY: American Basketball League (ABL)

HEADQUARTERS: Palo Alto, Calif.

TYPE OF BUSINESS: Women's basketball league

FOUNDERS: Gary Cavalli, sports promoter; Anne Cribbs, Olympic gold medalist; Steve Hams, former General Magic executive; Bobby Johnson, Atlanta entrepreneur

CAPITAL: $3 million in seed money; additional $6 million from two private investors

KEY COMPETITION: Women's National Basketball Association (WNBA), owned by the National Basketball Association

COMPETITIVE STRATEGY: One-brand focus; grassroots marketing; worker solidarity

The American Basketball League's line of business--women's professional hoops--isn't quite your standard Silicon Valley fare, but CEO Gary Cavalli insists he comes "from the Silicon Valley mentality." That's good, for the ABL will need every play in the entrepreneurial book to avoid getting stuffed by the towering NBA, whose rival league tips off this month.

Created last year by four women's sports zealots, the Palo Alto­based ABL bears closer resemblance to its neighboring high-tech start-ups than to a traditional league. To keep salaries in check, it wholly owns each of its eight teams.

Marketing is grassroots. You'll find ABL players stumping for their employer at malls and church leagues. "Not having the big war chest," says Cavalli, "we take the product to the consumer."

And like any scrappy upstart, the league strives to make its employees feel united in a common purpose. There's worker empowerment--brainstorming sessions for player input "on everything from the size of the ball to the league's business plan," says Cavalli--and a profit-sharing plan. "This is a cause, a movement."

All the talk of sisterhood serves a purpose: retaining employees. Talent in the two leagues is fairly even (the ABL boasts Olympic starters Dawn Staley and Nikki McCray; the WNBA, Lisa Leslie and Sheryl Swoopes), but there's always the specter of the NBA's turning on its money spigot to attract players--it has already done so to lure foreign stars.

Another Silicon Valley trick: ABL contracts, which average $70,000, include noncompete clauses. "If your stars are playing in both leagues," reasons Cavalli, "their brand value is diluted."

The ABL also embraces the management buzzword focus. The league puts the women's game squarely at center court, whereas WNBA clubs are owned and operated by the men's franchises. "The WNBA is a product-extension strategy," says ABL cofounder Steve Hams. "It clearly doesn't measure up."

Still, it's the ABL that's on the short end of the size mismatch, confronting what WNBA president Valerie Ackerman calls "the organizational firepower" of the NBA's marketing juggernaut. The ABL has yet to land a network-TV contract, and though it has Reebok's backing, it hardly matches the WNBA's sponsorship roster (which includes Nike, Spaulding, and Sears). Its average attendance of 3,500 beat projections, but its Atlanta and Richmond teams were loss leaders. Cavalli hopes revved-up licensing will help the league halve its $4-million loss next season.

Some think the two rivals can find a peaceful coexistence as they play in different markets and different seasons. Then again, mercenary interests could prevail. Sisterhood is powerful, but it may also prove fleeting.


Resources

AMERICAN BASKETBALL LEAGUE, 1900 Embarcadero Rd., Suite 110, Palo Alto, CA 94303; 415-856-3225; www.ableague.com 23

WOMEN'S NATIONAL BASKETBALL ASSOCIATION, 645 Fifth Ave., New York, NY 10022; 212-688-9622; www.wnba.com 23

Last updated: Jun 1, 1997




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