Overtime starting a basketball league that pays youth over $ 100,000

Are Extra Hour CEO Dan Porter going crazy?

The sports company’s co-founder recalled the reaction of former National Basketball Association commissioner David Stern when he launched the establishment of another rim league.

The extension announced on Thursday that it plans to start a basketball league for youth ages 16 to 18, allowing them to earn at least $ 100,000 a year.

The Overtime Elite league will allow players to bypass traditional high school and high school levels while building their brand before becoming eligible for the NBA. It will start in September with 30 players, and will be based on a single location, which is still under discussion.

In an interview on Wednesday, Porter confirmed that the extension would pay for all health insurance and allow players to earn bonuses and equity in the extension. He also remembered Stern’s skepticism.

“It is a very interesting opportunity,” said Porter of the start of OTE.

Overtime distributes original sports content on social media, including Snapchat, YouTube owned by Google and Instagram owned by Facebook, and sells clothing with their logos and brands. Most of the content revolves around high school or other amateur players, but does not license highlights or material from major sports leagues.

Porter and Zachary Weiner, both former executives of William Morris Endeavor, founded Overtime in 2016 with investments from Stern and others.

Since then, the company has built a huge Z generation of high school basketball players. The company has more than 40 million followers on its social media channels and has built credibility among NBA stars like Zion Williamson and Trae Young, owner of the Atlanta Hawks.

The company claims that its content is broadcast more than 1.7 billion times a month on all social platforms – mainly by Generation Z. Research suggests that this group of 13- to 24-year-olds prefers highlights and fast sports content rather than traditional formats, and they prefer basketball to other sports.

Overtime revenue comes from two sources. One is indirect alignment with brands, integrating them into their content and making money from video ads. The other is direct revenue via e-commerce, where Porter says the company earns “millions of dollars” from clothing.

“Just like a sports team, when you buy a hat or shirt,” said Porter, “people feel part of that community and buy clothes to represent that. We believe that there is a great opportunity to focus on what is fundamental about basketball. for young people and create a clothing brand. “

Overtime refused to disclose his finances.

With OTE, Porter expects the revenue model to change a little “from e-commerce and media to e-commerce, media, rights and licensing as a league”. He said that OTE eventually wants to sell its media rights.

“Not at first. Let’s take it easy,” said Porter.

Overtime is also involved in active conversations with brand partners and distribution for the league.

Porter said he spent two years talking with families of top athletes to seek information about OTE. He said that families have expressed disapproval of the current path for professionals, where prominent colleges earn millions with talent in exchange for a free education.

OTE says it will provide high quality education, residences and training, as well as advanced analysis of players’ performance to help them improve. But the big advantage is that OTE will give players the right to capitalize on their brands while being paid to participate.

“We are the only country in the world that forces you to go to high school and then to college to become a professional athlete, at least in basketball and football,” said Porter.

As part of its collective bargaining agreement, the NBA prohibits players under the age of 19 from joining the league. Some players attend at least one year of college while awaiting qualification; therefore, the popular term “completed”.

Porter referred to players like former NBA playmaker Brandon Jennings and playmaker Charlotte Hornets LaMelo Ball, who avoided college.

“We are doing this based on looking at how these young athletes are trying to change the system and make it work for them,” said Porter.

“We are a great platform and it makes us a good place to go out and find talent,” said Porter. “We are starting a league from scratch. We have no legacy left. We can build a model that looks like a 21st century model, both in terms of how start-ups and how digital companies are created.”

Porter said that OTE could serve as a new path for the NBA. The NBA already has a non-university route with its NBA G League Ignite program, featuring the best high school students Jalen Green and Isaiah Todd. This route allows younger players to train in the program until they become eligible.

If OTE players are not looking for a professional career, there will be an additional $ 100,000 to pay for college. But if young people participate in the league, players lose their NCAA eligibility because they are getting paid.

“It’s a professional path,” said Porter. “But, unlike a pure farm system, this is competition. We expect tens of millions of people to want to tune in and watch. And why do we expect that? Because they are already watching on our platforms today.”

Portland Trail Blazers striker Carmelo Anthony, an OTE investor and board member, said many athletes are not adequately prepared for the life of a professional athlete.

“We need to do a better job of empowering the next generation of players and preparing them for success,” he said. “OTE is leading the way on this front, offering players a comprehensive path that fully develops the athlete – not just basketball skills, but also education, economic empowerment and building their own brand. Having this kind of guidance for teaching players medium is essential in the scenario for a successful career, both on and off the court. “

Porter said the initial reaction around the league is positive and was built with NBA names that can help OTE operate efficiently.

In addition to Anthony, investors include Brooklyn Nets star Kevin Durant and Silicon Valley venture capital firm Andreessen Horowitz. The commissioner is former NBA executive Aaron Ryan, and former Sacramento Kings assistant general manager Brandon Williams will oversee the league’s operations.

“There’s a lot of NBA DNA in that,” said Porter.

But Stern was the most influential. He was Overtime’s first investor, helping it raise $ 2.5 million in 2017, three years before his death.

Porter remembered Stern telling him to avoid starting a league. “I spent 30 years doing this. You don’t want to do something like that, ”Porter remembers him saying.

“But we are irritatingly persistent,” he added.

As Stern watched Overtime take off among GenZ, he became convinced that OTE was a good idea and approved it, said Porter.

“He said, ‘I think not only can you do this, but you also need to do this,” recalled Porter. “We were like wow. It’s like a 180. That’s when we felt we could do that. When you build a company in this world, you can’t count on people giving you opportunities,” added Porter. “You have to make your own way.”