July 8, 2008 / 5:52 PM / in 10 years

College basketball could be hurt by defections

CHICAGO (Reuters) - The possibility a top high school basketball player may skip college to play professionally overseas has some analysts questioning whether the NCAA and its popular “March Madness” tournament can remain a cash cow that generates hundreds of millions of dollars.

Brandon Jennings, a top high school guard from Virginia, has caused a stir by expressing interest in going overseas for a year instead of playing in college before returning stateside to play in the National Basketball Association. Several analysts said such defections would hurt the National Collegiate Athletic Association financially.

“College would be a bunch of nobodies,” said David Bauman, president of Hoops Management, the basketball player agency arm of concert promoter Live Nation Inc. “TV interest would drop and the overall product would suffer.”

The NCAA currently enjoys the fruits of an 11-year broadcast rights deal signed with CBS in 1999 worth $6 billion. At about $546 million per year, the deal, which runs through 2013, more than doubled the prior agreement’s $216 million annual payment.

The NCAA also derives millions of dollars from its roster of corporate clients including AT&T Inc and Coca-Cola Co. Excluding separate deals with colleges, sponsors collectively spend about $165 million a year on rights fees with the NCAA, according to IEG Sponsorship Report.

Three years after the NBA and its players’ union implemented a requirement that a player be a year removed from high school, Jennings has some questioning whether the NCAA’s popular March tournament can remain so lucrative.

Once a player shows that Europe is viable, more will follow, said Sonny Vaccaro, a former marketing executive with Nike Inc, Adidas AG and Reebok. “Once one does it, we will have a migration of young people.”

Many top college players already leave college after just one year. This year, 12 freshmen were picked in the NBA draft on June 26, including Derrick Rose, Michael Beasley and O.J. Mayo in the first three picks.

While only the best few players could go overseas, it would be a painful hit in a star-driven culture, said Allen Sack, director of the Institute for Sport Management at the University of New Haven. “You start hemorrhaging those great players and the NCAA is going to have some problems.”

NCAA officials brush off such fears. “One person does not a trend make,” NCAA spokesman Erik Christianson said.

Top NCAA sponsors also are unfazed. “The college game is not just about the players themselves, but it’s about the teams and the schools, the esprit de corps,” said Nike Brand President Charlie Denson, adding the NCAA will remain a key investment.

Craig Esherick, professor of sports management at George Mason University in Virginia and former head basketball coach at Georgetown University in Washington, said the value of the NCAA’s next TV rights deal will be “off the charts.”

The impact of any top defections overseas likely would not be felt for several years and the situation could change again depending on what the NBA and the players’ union negotiate in the next collective bargaining agreement in 2011 or 2012.

Until then, NBA Vice President Tim Frank said the U.S. sports league has no position on Jennings’ decision. “A player can do what he wants.”

Clubs overseas remain open to the possibilities, which could include a salary of $200,000 to $1 million. An official with the Greek basketball federation said his group’s teams would look seriously at recruiting young U.S. players.

Additional reporting by Mark Elkington in Madrid and Karolos Grohmann in Athens, editing by Mark Porter

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