Development of a Sustainable Strategic Framework for the Bsn – Puerto Rico’S Pro Basketball League

EDGAR X. VARGAS ACEVEDO DEVELOPMENT OF A SUSTAINABLE STRATEGIC FRAMEWORK FOR THE BSN – PUERTO RICO’S PRO BASKETBALL LEAGUE

Final Master Thesis

Study program: Sport Business Management State code 6211LX001

Supervisor: Assoc. prof., dr. Renata Legenzova Head of Graduate Studies of Faculty of Economics and Management

Defended: Assoc. prof., dr. Rita Bendaravičienė Dean of the Faculty of Economics and Management

Kaunas, 2021

Abstract

Edgar X. Vargas Acevedo. DEVELOPMENT OF A SUSTAINABLE STRATEGIC FRAMEWORK FOR THE BSN – PUERTO RICO’S PRO BASKETBALL LEAGUE: Final Master Thesis in Sport Business Management/ Assoc. prof., dr. Renata Legenzova / Vytautas Magnus University, Faculty of Economics and Management, Graduate studies. – Kaunas, 2021. – number of pages p. 84

SUMMARY

Throughout the years, the professional basketball league of Puerto Rico – Baloncesto Superior Nacional (BSN) – has been recognized as one of the top competitions of the Americas continent. Its beginnings date back to as early as 1930 - making the league one of the oldest in the world with 90 continuous years of serving basketball to the Puerto Rican community. BSN’s preparation, production and post-tournament activities generate a significant impact in Puerto Rico’s economy, the island’s natural ecosystem and on local communities of the participating franchises. As with any mega- sporting event, the BSN also presents risks related to the increased use of limited natural resources, as well as to the health, safety, and well-being of all its stakeholders. Using a mixed-method research design (804 online surveys and 30 one-to-one meetings), this final master thesis seeks to develop a sustainable strategic framework for the BSN organized according to three pillars: governance, people, and environment.

Keywords: Basketball in Puerto Rico, Sustainability, Sustainable Development, Sustainability Development Goals, Sports, and Sports Business

TABLE OF CONTENT

ABSTRACT...... 2 INTRODUCTION...... 5 I. LITERATURE REVIEW ON SUSTAINABILITY AND SUSTAINABLE DEVELOPMENT IN SPORTS ……………………………………………………………………………………………..8 1.1 The Concept of Sustainability...... 8 1.2 Sustainable Development ...... 10 1.2.1 The Five P’s of Sustainable Development …………………………………………………..11 1.3 United Nation’s 2030 Agenda for Sustainable Development ...... 14 1.3.1 Sustainable Development Goals (SGDs) …………………………………………………….14 1.3.2 SDGs Challenges …………………………………………………………………………….17 1.4 Sports as Drivers for Sustainable Development …………………………………………….….17 1.5 Advantages of Sustainable Sporting Organizations…………………………………………….19 II. FIELD OF ANALYSIS: ASSESMENT OF SDGs IMPLEMENTATION IN THE BSN ...... 21 2.1 An Overview of the Baloncesto Superior Nacional (BSN)...... 21 2.2 Analysis of BSN’s Business Model...... 24 2.2.1 Value Proposition……………………………………………………………………………..24 2.2.2 Customer Segment…………………………………………………………………………….25 2.2.3 Channels……………………………………………………………………………...……….27 2.2.4 Customer Relationships……………………………………………………………………….32 2.2.5 Resources ……………………………………….…………………………………………….32 2.2.6 Activities ……………….……………………………………………………………………..34 2.2.7 Partners ……………………………………………………………………………………….35 2.2.8 Revenue Structure …………………………...……………………………………………….36 2.2.9 Cost Structure ………………………………………………………………………….……..37 2.3 Sustainable Strategic Framework Development Process …………………...……………...... 38 III. BSN’s SUSTAINABLE STRATEGIC FRAMEWORK AND OBJECTIVES...... 41 3.1 Governance Pillar………………………………………………..……………………………...43 3.1.1 Strategic Planning ………..…………………………………….…………………………….43 3.1.2 Transparency, Accountability, and Compliance …………………………………..…………44 3.1.3 Economic Performance …………….……………………………………………………...…45 3.1.4 Sporting Integrity …….…………………………………………………………………..…..48 3.1.5 Safety and Security …………………………………………………………………………..48 3.1.6 Infrastructure …………………………………………………………………………………49 3

3.2 People Pillar………………………………………………………...... 50 3.2.1 Workforce Development ……………………………………………………………………..50 3.2.2 Community Cohesion ………………………………………………………….……………..51 3.2.3 Cultural Understanding …………………………………………………………………...….52 3.2.4 Diversity and Anti-Discrimination…………………………………………………………....53 3.2.5 Accessibility ……………………………….………………………………………...……….54 3.2.6 Workers’ Living Conditions ………………………………………………………………….54 3.3 Environment Pillar...... 55 3.3.1 Energy Emissions and Mobility………………………………………………………………56 3.3.2 Waste…………...……………………………………………………………………………..56 3.3.3 Water……….…………………………………………………………………………………57 CONCLUSIONS...... 58 REFERENCES...... 60 ANNEXES ...... 64

INTRODUCTION

Relevance and topicality. Over the years, the term sustainability has taken roots within the sports industry. As stated in the Brundtland Commission of the United Nations in 1987, sustainability was defined as meeting the needs of the present without compromising the ability of future generations to meet their own needs. This concept is usually analyzed through three core elements: environmental protection, economic growth, and social inclusion. In 1997, British entrepreneur John Elkington popularized the concept applied in business on his book Cannibals with Forks: The Triple Bottom Line of 21st Century Business. In here, he defined a business as ‘sustainable’ when it lives up to what he calls the “Triple Bottom Line”. In this framework, Elkington assesses business performance based on the three main pillars – what he calls the 3 P’s of sustainability: planet (environmental protection), profit (economic growth), and people (social inclusion). In this context, sustainability was defined as the place where the three P’s overlap. Throughout the years, the professional basketball league of Puerto Rico – Baloncesto Superior Nacional (BSN) – has been recognized as one of the top competitions of the Americas continent. Its beginnings date back to as early as 1930 - making the league one of the oldest in the world with 90 continuous years of serving basketball to the Puerto Rican community. BSN’s annual preparation, production and post-tournament activities generate a significant impact in Puerto Rico’s economy (around twelfth million dollars in gross income per year), the island’s natural environment, and on local communities of the participating franchises. Despite basketball’s popularity among the island of Puerto Rico, where it is considered the island’s primary sport, its professionalization as a business has left much to be desired. Although the league had an explosion in its commercialization during the 2000s, it has been suffering from an economic crisis during the past decade. Every year there are fewer franchises competing in the league, lower budgets for each team, higher owners’ contributions, lack of different revenue streams, less government contribution for each team, and more debts in the operation of the remaining franchises. Although BSN’s outreach has significantly been reduced in recent years, the league is still considered Puerto Rico’s preferred league among fans. Reality is that the direction the league is heading is negatively alarming. For this reason, it is necessary to develop a sustainable strategic framework that guarantees the progress of the BSN in the long term and ensures the well-being of all its stakeholders for the subsequent years. The research problem addressed in this paper is – what is the economic performance, social inclusion, and environmental impact of performing each year the BSN, and what sustainable strategic framework can be implemented to enhance this impact for the league in the long-term. The research object is sustainable development strategy of the BSN.

The research aim of this final master thesis seeks discuss key concepts as sustainability, sustainable development, and sustainable development applied in sporting organizations in order to develop a sustainable strategic framework for the BSN organized according to three pillars: governance, people, and environment. To do so, this document explores three key areas: • Sustainability and sustainable development in sports (literature review): In this part, reference information was obtained from the Vytautas Magnus University and the University of Puerto Rico-Mayagüez’ databases, and the official website of the United Nations. o Define terms such as sustainability and sustainable development. o Address United Nations’ 2030 Agenda for Sustainable Development. o Understand sports’ importance as sustainable development drivers. o Identify key advantages for sustainable sporting organizations. • Assessment of sustainability in the BSN (field of analysis): After an in-depth analysis of the BSN’s current situation in which were gathered 804 online surveys and conducted 30 one-to- one meetings, a list of sustainable topics (economic, social, and ecological) linked to the league’s annual execution was developed by: o Evaluation of the BSN’s current context (Analysis of the BSN’s business model, and a benchmark analysis with some of the best practices from major sporting events and professional leagues around the world). o Identification of strategic priorities across BSN’s stakeholders (players, coaches, team owners, tournament organizers, commercial affiliates, attendees, workforce, supply chain, participants, governing bodies, and communities), using a standard deviation analysis. • BSN’s sustainable strategic framework (results and conclusions): Define a sustainability framework (organized according to three pillars: governance, people, and environment) to form the foundation of the BSN’s Sustainable Development Strategy during the annual execution of the BSN.

Research methods. To accomplish the objectives of the research, the study implemented a mixed methods model which is a combination of both qualitative and quantitative approaches. Information sources. The study used verified internet sources to explore the various sources of secondary data like government publications, official and certified websites, books, and lastly, published journal articles, that have relevant information relating to the topic of study to provide accurate and reliable evidence regarding the subject matter. After gathering this data, a 30-question survey was conducted to understand the actual fan base of the BSN. A total number of 804 responses were collected and analyzed. After the analysis, an assessment of the BSN’s sustainability was

6 undertaken through an in-depth analysis of the BSN using documents administered by the league and engaging in one-to-one interviews with 30 league stakeholders.

I. LITERATURE REVIEW ON SUSTAINABILITY AND SUSTAINABLE DEVELOPMENT IN SPORTS

1.1 The Concept of Sustainability

Sustainability has become one of the most common buzzwords during the past three decades. In almost every aspect of today’s world, we hear sustainability in one context or another. Maybe we have used certain products or services labeled as ‘sustainable’, or we are aware of cities or companies that focus on sustainability as their main goal within their day-to-day operations. Although the term’s awareness has increased significantly in recent years, there are doubts and uncertainty about what it really means and how it can be accomplished. Throughout the years, sustainability’s definition has been linked to a natural connotation, focusing mainly on the preservation and conservation of the world’s natural resources. Yes, it deals with preserving the environment, but sustainability addresses so much more. The Cambridge Dictionary (1995) defines sustainability with two different definitions. First, as the quality of being able to continue over a period of time. Secondly, as the quality of causing little or no damage to the environment and therefore able to continue for a long time. The most common definition of sustainability comes from the United Nations’ Brundtland Commission in 1987. Here, sustainability was defined as meeting the needs of the present without compromising the ability of future generations to meet their own needs (Brundtland report, 1987). While the meaning of sustainability varies from place to place, it is certain that this term deals with preserving natural spaces and the wise use of resources for present and future practices of all human beings. Sustainability seeks to understand the relationship between societal growth and environmental deprivation, in a way that allows human societies and economies to grow without compromising the natural resources and ecosystems in which they exist. Sustainability is often addressed as a three pillar-concept: environmental protection, economic growth, and social inclusion. In 1997, John Elkington popularized the concept applied in business on his book Cannibals with Forks: The Triple Bottom Line of 21st Century Business. According to Elkington (1997), the methods by which a company measures value should not only include a financial component (profit or loss), but also a social and an environmental one. In his book, he coined the concept of “sustainable business” as the new managerial model for the 21st Century capitalism society. Cannibals with Forks defines a business as ‘sustainable’ when it lives up to the “Triple Bottom Line”. In this framework, Elkington assesses business performance based on the three P’s: planet (environmental protection), profit (economic growth), and people (social inclusion). As viewed in

Figure 1, sustainability could be defined as the place where the three P’s overlap. This concept allowed businesses to understand that long-term success requires more than just financial equity. In other words, there is more in business success than just profits.

Figure 1 – The three pillars (with examples) of John Elkington’s Triple Bottom Line Framework to a

sustainable business. (Avramenko, 2018)

Broadly, business sustainability refers to economic growth of organizations from a structure that integrates ethics, transparency, and responsibility as way of doing things. There are hundreds of studies exploring sustainable strategies within business organizations, and the relationship between those strategies with their financial performance. Although results are diverse, there are three main strategies for business sustainability: resource optimization in business processes and supply chains, protecting brand value through stakeholder engagement, and selling to a niche market of green consumers ready to buy product and services at a premium price (Mahajan & Bose, 2018). On the other hand, environmental sustainability aims to understand how the organizations measure its impacts on the environment, and take action from a socket decisions based on adequate information, to minimize and reduce this impact . As stated in the book Sustainability: The Corporate Challenge of the 21st Century, environmental sustainability focuses on how business can accomplish positive economic outcomes without doing any harm, in the short- or long-term, to the environment (Dunphy, Benveniste, Griffiths, Gollan & Sutton, 2000).

Finally, social sustainability focuses on maintaining and improving relationships among people while allowing individuals to satisfy their needs. It is mandatory to define what is a need to explain the social pillar of sustainability. In 1991, Manfred A. Max-Neff published a book called Human Scale Development to define the different types of need for human beings, and how they were classified. In his book, he identified nine different types of needs that were present in every culture of the world: subsistence (we need food and water), protection (we need a safe place to live in), participation (we need to be part of the decisions that affect our lives), understanding (we need to learn about things), affection (we need to have love and friends), idleness (we need to be able to enjoy free time and time to relax), creation (we need to innovate and engage on creative practices), identity (we need to have a sense of belonging), and freedom (we need to be able to choose how we live our lives). Broadly, this dimension of sustainability refers to the relationship’s entities maintain with society: both with the communities like the employees themselves. We can conclude that sustainability is a strategic, proactive, and long-term bet of an organization that seeks to create value while addressing its activity impact within its ecosystem. In terms of business, this term can be simplified as managing today while preparing for tomorrow. In 2016, Schaltegger, Hansen and Lüdeke-Freund proposed that “a business model for sustainability helps describing, analyzing, managing and communicating key elements like a company’s sustainable value proposition to its customers, and all other stakeholders; how it creates and delivers this value; and how it captures economic value while maintaining or regenerating natural, social and economic capital beyond its organizational boundaries” (Schaltegger et. al., 2016, p.6). Although it is often viewed as a cost within companies’ day-to-day operations, when it is viewed under the right lenses, sustainability helps businesses drive value while addressing the most important challenges (Hart & Milstein, 2015).

1.2 Sustainable Development

Commonly, people tend to confuse the definition of sustainability with sustainable development. As British environmentalist and writer Sir Jonathon Porritt once said, “sustainable development is one of those ideas that everybody supports but nobody knows what it means” (Sir Jonathon Porritt cited in the FinancialTimes, 1998). Sustainability is often used as a replacement or a synonym of sustainable development. Although they are similar concepts, key differences may be noted. Porritt analyzed the distinction between both terms in his book Capitalism as if the World Matters. In here, he defines sustainability as the capacity for continuance into the long-term future. Meanwhile, he describes sustainable development as the process or journey by which we move to sustainability (Porritt, 2005). A slightly different view was provided by the American professor

Roderick Eggert in his book What Sustainability and Sustainable Development Mean in Mining. He suggests that sustainability is often used as a one-dimensional concept (“environmental sustainability”, “economic sustainability”, and “social sustainability”). In other words, it deals with only one of those three pillars at a same time. On the other hand, he explains sustainable development as a multi-dimensional concept that integrates all three dimensions at the same time. Although definitions vary from one place to another (like in sustainability’s case), sustainable development relies on the big picture. But it’s also about the details - that means it seeks economies to grow, companies to thrive and people to have decent work. It relies on improving the lives of everyone while achieving all this together in every part of the world. Differently to sustainability, sustainable development adds two additional dimensions: peace and partnership.

Figure 2 – The five P’s of sustainable development (Sow, 2017)

1.2.1 The Five P’s of Sustainable Development

• Planet

First of all, we must take care of our planet. In planet Earth we have national ecosystems that must be balanced to allow us to live here. Almost everything we develop, buy or trade starts with nature. The smarter we use Earth’s natural resources

11 and the better systems we create for fair distribution, the more sustainable we are going to be as a planet. As stated in the United Nations’ 2030 Agenda for Sustainable Development, we are determined to protect the planet from degradation, including through sustainable consumption and production, sustainably managing its natural resources, and taking urgent action on climate change, so that it can support the needs of the present and future generations (United Nations, 2015). Philipp Babcicky in his article “Rethinking the Foundations of Sustainability Measurement: The Limitations of the Environmental Sustainability Index (ESI)”, addressed some of the environmental sustainability and concluded that it consists in tracking changes to the quality and condition of air, water, land, and ecological systems and their resident fauna.

• People

We, as human beings, are also very important resources for the world – just like the four basic elements of nature: earth, air, fire, and water. We have people with extraordinary minds that can create the most creative things under the strangest environments. To improve our sustainable development, we must seek to live in a world where we can become best versions of ourselves. But, to do so, there are some things that must be in order – like having equal opportunities for education, safety, food and medicine. As summarized by the United Nations, we are determined to end poverty and hunger, in all their forms and dimensions, and to ensure that all human beings can fulfil their potential in dignity and equality and in a healthy environment (United Nations, 2015). Carina Weingaertner and Åsa Moberg identified in their research “Exploring Social Sustainability: Learning from Perspectives on Urban Development and Companies and Products” seventeen key components that people should have access to in a sustainable development environment: accessibility (e.g. access to employment, open spaces, local services, resources); social capital and networks; health and well-being; social cohesion and inclusion (between and among different groups); safety and security (real and perceived); fair distribution of income and employment; local democracy, participation and empowerment (community consultation); cultural heritage (e.g. local heritage and listed buildings); education and training; equal opportunities and equity; housing and community stability; connectivity and movement (e.g. pedestrian friendly, good transport links); social justice (inter-generational and intra-generational); sense of place and belonging;

12 mixed use and tenure; attractive public realm; and local environmental quality and amenity.

• Prosperity

As expressed by the United Nations, we are determined to ensure that all human beings can enjoy prosperous and fulfilling lives and that economic, social, and technological progress occurs in harmony with nature (United Nations, 2015). Broadly, this statement means that regardless of age, race, gender, ethnic origin, disabilities, and sexual orientation, we must ensure that everyone from anywhere around the world has all the tools (economic, social, and technological) at their disposal to flourish within their respective realities. As suggested by Andrea Colantonio and Tim Dixon in their paper “Measuring Socially Sustainable Urban Regeneration in Europe”, prosperity ‘concerns how individuals, communities and societies live with each other and set out to achieve the objectives of development models which they have chosen for themselves, also considering the physical boundaries of their places and planet earth as a whole’ (Colantino and Dixon, 2009).

• Peace

As specified by the United Nations in the 2030 Agenda for Sustainable Development, peace, justice, and strong institutions are three essential values for the improvement in the three core areas: planet, people, and prosperity. There can be no sustainable development without peace and no peace without sustainable development (United Nations, 2015). This sustainable development dimension seeks to create a peaceful, inclusive, tolerant, and just world for human rights and human dignity, race, ethnicity, and cultural diversity.

• Partnership

One key aspect within sustainable development is strengthening the capacities of all stakeholders to work together for a greater purpose. It is crucial to develop all kind of partnerships so can knowledge and expertise be shared, and we can learn how to address challenges in a collaborative perspective. In the 2030 Agenda for Sustainable Development, the United Nations expresses that need of establishing 13

global partnerships focused on the needs of the poorest and most vulnerable, while bringing together governments, the private sector, and civil society by activating all available resources.

1.3 United Nation’s 2030 Agenda for Sustainable Development

On September 25th of 2015, the United Nations presented to the world their worldwide action plan to accomplish sustainable development by the year 2030. In here, the 193 members of the United Nations unanimously adopted seventeen (17) Sustainable Development Goals (SDGs) with 169 targets that set out the building blocks of inclusive prosperity for the 21st century.

1.3.1 Sustainable Development Goals (SDGs)

According to the United Nations, the 17 SDGs intend, between the years 2015 and 2030, to “end poverty and hunger everywhere; to combat inequalities within and among countries; to build peaceful, just and inclusive societies; to protect human rights and promote gender equality and the empowerment of women and girls; and to ensure the lasting protection of the planet and its natural resources. We resolve also to create conditions for sustainable, inclusive, and sustained economic growth, shared prosperity, and decent work for all, considering different levels of national development and capacities” (2015). These set of goals were implemented with the intention of completing the work that the Millennium Development Goals (MDGs) started in the year 2000. At the beginning of the 21st century, leaders from 189 countries agreed on a vision for the new millennium, based on eight goals which they called the MDGs (figure 3). These objectives were proposed to eradicate extreme poverty and hunger; to achieve universal primary education; to promote gender equality and empower women; to reduce child mortality; to improve maternal health; to combat HIV/AIDS, malaria, and other diseases; to ensure environmental sustainability; and to develop a global partnership for development by the year 2015 (United Nations, 2015).

Figure 3 – United Nations’ Millennium Development Goals (MDGs) (United Nations, 2015)

As reported by the United Nations, among the key MDGs achievements (United Nations, 2015) are more than 1 billion people have been lifted out of extreme poverty (since 1990), child mortality dropped by more than half (since 1990), the number of out of school children has dropped by more than half (since 1990), and HIV/AIDS infections fell by almost 40 percent (since 2000). Although innumerable accomplishments by the MDGs, there was more work to be done. Implementing the SDGs across the 193 countries of the United Nations allowed governments, businesses, and civil societies to confront a range of interconnected economic, social, and environmental issues – while creating value that lasts forever. These seventeen goals with 169 targets envisioned a worldwide change by the year 2030 addressing three key pillars: economic growth, environmental protection, and social progress.

Figure 4 – United Nations’ Sustainable Development Goals (SDGs)

(United Nations, 2015)

As confirmed by the United Nations (United Nations, 2015), the 17 SDGs are: • Goal 1. End poverty in all its forms everywhere. • Goal 2. End hunger - achieve food security and improved nutrition and promote sustainable agriculture. • Goal 3. Ensure healthy lives and promote well-being for all at all ages. • Goal 4. Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all. • Goal 5. Achieve gender equality and empower all women and girls. • Goal 6. Ensure availability and sustainable management of water and sanitation for all. • Goal 7. Ensure access to affordable, reliable, sustainable, and modern energy for all. • Goal 8. Promote sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all. • Goal 9. Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation. • Goal 10. Reduce inequality within and among countries. • Goal 11. Make cities and human settlements inclusive, safe, resilient, and sustainable. • Goal 12. Ensure sustainable consumption and production patterns. • Goal 13. Take urgent action to combat climate change and its impacts. • Goal 14. Conserve and sustainably use the oceans, seas, and marine resources for sustainable development. • Goal 15. Protect, restore, and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss. • Goal 16. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable, and inclusive institutions at all levels. • Goal 17. Strengthen the means of implementation and revitalize the Global Partnership for Sustainable Development.

1.3.2 SDGs Challenges

According to Kumar and Vivekadhish (2016) there are four major challenges that need to be addressed for achieving the SDGs: high costs, the threat to international peace, measuring progress, and accountability. Implementing SDGs have proven to be highly costly. For example, as reported by author Adeyinka Olumuyiwa Osunwusi in her paper "The Nigerian Education Milieu in the SDG Era: The Roles, Values, Challenges and Prospects of ODL and Lifelong Learning”, the cost of eradicating extreme poverty worldwide is about $175 billion per year. Also, she states that around 8.6% of the world, or 736 million people, live in extreme poverty on $1.90 or less a day, according to the World Bank (Olumuyiwa Osunwusi, 2020). Maintaining peace is critical for sustainable development. A threat to international peace is emerging as a major factor for both developed and developing countries. In January of 2020, after a collapse in negotiations between the Trump administration and Kim Jong Un, North Korea threaten the United States with a nuclear attack. Monitoring progress is a key element within SDGs implementation and depends on the accessibility of information and the ability to quantify it. Theorists agree on that there are three levels of monitoring sustainable development: national, regional, and global. Monitoring SDGs on a national scale is the most significant level of reporting because each country responds to their national priorities and needs. For this reason, national indicators tend to vary from country to country. In regional reporting, knowledge is shared and accountability for regional challenges and opportunities is promoted. Finally, global monitoring is a vital complement to national and regional reporting. It will ensure global coordination and will indicate which countries or areas need the greatest assistance. Accountability is perhaps the most significant challenge when implementing the SDGs. Since SDGs do not present indicators that measure progress nor accountability, these two topics have been greatly debated. In general terms, we are all responsible for the world’s sustainable development - not only should governments be responsible, but so does the private sector.

1.4 Sports as Drivers for Sustainable Development

Historically, sports have played an important role in all societies. They are part of our culture and promote positive values such as effort, perseverance, teamwork, and spirit of improvement.

Therefore, it’s very important for organizations to incorporate a sustainable dimension within their day-to-day operations. The organizations that do so, will be more prepared for the future and will be more likely to ensure a long-term success. After the adoption of the Millennium Development Goals (MDGs), the United Nations recognized sports as a tool for development and peace for decades (United Nations, 2015). With the overarching aspiration of bringing people and the planet closer together and leaving no one behind, the United Nation’s 2030 Agenda represented a unique opportunity to inspire global action for development worldwide, including in the field of sport for development and peace. Among the most intricately connected SDGs with sports are Goals 3 (Good Health and Wellbeing), 4 (Quality Education), 5 (Gender Equality), 8 (Decent Work and Economic Growth), 10 (Reduced Inequalities), 11 (Sustainable Cities and Communities), 16 (Peace, Justice and Strong Institutions) and 17 (Partnerships). As stated by Wilfried Lemke, Special Adviser to the United Nations Secretary-General on Sport for Development and Peace, in the article The Role of Sport in Achieving the Sustainable Development Goals, sport is an important enabler of sustainable development. According to Lemke, the United Nations recognize the growing contribution of sport to the realization of development and peace in its promotion of tolerance and respect and the contributions it makes to the empowerment of women and of young people, individuals, and communities as well as to health, education and social inclusion objectives (United Nations, 2015). In fact, sports in society are so vital that the United Nations declared them a human right in their 67th General Assembly in 2013. According to the Assembly, “sport and play are human rights that must be respected and enforced worldwide; sport has been increasingly recognized and used as a low-cost and high-impact tool in humanitarian, development and peace-building efforts.” (United Nations, 2013). While they recognize sports positive aspects within society, they also acknowledge that, at times, it can negatively influence society with corruption, scandal, and the incitement of violence. In the Assembly was added that “sport has a unique power to attract, mobilize and inspire. By its very nature, sport is about participation. It is also about inclusion and citizenship – it stands for human values such as respect for the opponent, acceptance of binding rules, teamwork and fairness, all of which are principles which are also contained in the Charter of the United Nations.” In 2018, the SDG Fund Secretariat through the support of the Principality of Monaco from United Nations launched The Contribution of Sports to the Achievements of the Sustainable Development Goals: A Toolkit for Action”. In here, it may be seen how developed organizations and sports companies have used sport and recognized its value as a far-reaching tool for development and peace. According to the United Nations, this toolkit aims to raise visibility and understanding of the SDGs while also showcasing and promoting the contribution of sports and best sports practices in

18 relation to the SDGs by relevant stakeholders including United Nations entities, Member States, sports-related organizations, non-governmental organizations, sports associations, foundations, civil society, academia, and the private sector (United Nations, 2018). After highlighting practices from major events like the Olympics and the FIFA World Cup, this toolkit offers a series of recommendations to leverage the potential of sports to achieve the SDGs. Some of them include (UN, 2018): • Sports is a cost-effective and powerful tool for promoting important social values, like work ethic, teamwork, dignity in labor, sense of belonging and community, tolerance, and unity in diversity. • Sports encourage healthy lifestyle choices among children and youth by helping them remain active (Goal 3). • Sports represent an enormous platform in which it could be raise awareness against world poverty (Goal 1), hunger (Goal 2), environmental protection (Goals 6, 7, 9, 12, 13, 14, and 15), and inequalities (Goal 10). • Sport contributes to making cities and communities more inclusive (Goal 11). • Sports promote gender equality (Goal 5), social inclusion (Goal 16), partnerships (Goal 17). • Combined with a school curriculum, physical activities and sport are necessary for a comprehensive education (Goal 4). • Sports has the potential to create jobs and represents a solid economic industry (Goal 8).

As Nelson Mandela once said, sports can bring hope where there was only despair. Undoubtedly, sports are drivers for the development and well-being of societies. Also, they represent a lucrative industry around the world. As a matter of fact, Statista reported that the global sports market was valued at approximately 471 billion U.S. dollars in 2018. As the industry continues its exponential growth, the need for sports entities to make their businesses ‘sustainable’ has become more prevalent than ever.

1.5 Advantages of Sustainable Sporting Organizations

Undoubtedly, sustainability has real and tangible benefits that allow sporting organizations and teams to enjoy a long-term success. Some of the advantages of being sustainable are the following:

• Brand Image: In today’s economy, more and more people, consumers, and clients value organizations with good behavior and image. Therefore, a franchise or club that is very strongly linked to his city and community, a sustainable way of doing things can be a differential element that bring courage and a feeling of pride to fans.

• Increase in Income: Improving a sporting organization can led to a betterment in its reputation for being recognized as a "sustainable entity", which can open new opportunities for profit generation. For example, sponsorships agreements with companies that want to link to that image of sustainable can be accomplished.

• Cost Savings: In general, many of the measures to improve sustainability are related to increasing efficiency and saving resources, so a side effect is cost savings.

• Legal Compliance: Integrating sustainability into the activity of a sporting organization also implies paying special attention to regulatory compliance and the establishment of management systems, which ultimately improve the entities' ability to be up to date in compliance with all applicable legislation.

• Talent Attraction: In modern times, sharing a vision and values with the organization has taken a primary importance within employees. Consequently, achieving an image of a sustainable sports organization will also attract workers who identify with those values, and increase employee commitment.

II. FIELD OF ANALYSIS: ASSESMENT OF SDGs IMPLEMENTATION IN THE BSN

2.1 An overview of the Baloncesto Superior Nacional (BSN)

To understand the basis under which the BSN was founded, it is mandatory to comprehend the socio-economic reality that permeated around the island of Puerto Rico during the 1930s. The invasion of the United States to Puerto Rico in 1898 had innumerable political and economic implications. Additionally, historic archives prove that Puerto Rico’s main value for the Americans was its strategical geographic position, which allowed them to control the routes of the Caribbean Sea and the Panama Canal. After devaluing and eventually eliminating the peso (the national currency) to impose the American dollar, the foundations for the new political and economic regime were laid. The Great Depression of the United States in 1930, and the damages of hurricanes San Felipe (1928) and San Cipriano (1932) led to a crisis within the Puerto Rican economy – which was back then based on the island’s agriculture. In response to a decline in the coffee industry (Puerto Rico’s primary agriculture product), the sugar rose as the primary economic industry of the island. A worldwide increase in sugar’s price increased, combined with a significant investment of capital from the American government, Puerto Rico became one of the principal sugar producers internationally. Despite this, the sugar industry required many laborers who were submitted to conditions like those of slavery. While the wealth of the island in the wake of sugar increased significantly every year, poverty and hunger among the island's population were larger. Additionally, nationalist movements (against the injustices that permeated around the island, and the United States government) were increasingly abundant. Broadly, Puerto Rico during this time was a poor, hungry island with a desire for change. Under this critical economic situation, Puerto Rico disputed its first professional basketball season in 1930 – originally called the Liga Superior de Baloncesto – with ten teams (San Juan, Floral Park, Loíza, US Army (65 de Infantería), Bayamón, Ciales, Arecibo, San Germán, Quebradillas, and Isabela). Initially organized by the Puerto Rican government via the Department of Parks and Recreation (DRD) Puerto Ricans saw in the league an escape of their immediate reality and access to free post-grad education. After San Juan’s championship at the end of the first season, the league embarked on a path of almost ninety continuous years of serving basketball to the Puerto Rican community. In 1931, radio station WKAQ broadcasted San Juan versus Arecibo – BSN’s first official game on the radio. Twenty-three years later, in 1954, as an effort to refresh, promote and separate basketball as a private entity, the now supervisor – Federación Insular de Baloncesto (FIB) – founded the Circuito de Baloncesto Superior de Puerto Rico (CBS). Among CBS’s accomplishments was the creation of the National Basketball Federation of Puerto Rico or FBPUR in 1955, FIBA’s affiliation

21 in 1957, and sending to Chile the first delegation of Puerto Rican players to compete in the 1959’s FIBA World Cup. Given the rise in popularity, around the 1960s, municipalities of the island decided to create indoor coliseums (Coliseo Arquelio Torres Ramírez in San Germán was the first one in 1954) - previously, the games were held in baseball parks. Although the league was on the rise, its players were still considered amateurs. Back then, basketball did not represent a determinant source of income for the players. For example, Juan "Pachín" Vicéns, considered one of the best players in the history of Puerto Rican basketball, labored as a bank manager while serving as a player from 1952 to 1966. Additionally, Raúl “Tinajón” Feliciano served as a judge while he disputed his thirteen-year career in the BSN (1947-1956, 1961, 1963, and 1967). Even so, in 1969, Bayamon won its fourth franchise championship after defeating Río Piedras in a game 7 in the Hiram Bithorn Stadium in front of 17,621 fans (biggest attendance recorded in a single game, until today). During the 1970s, the arrival of the television to Puerto Rico and the Nuyoricans (North Americans with Puerto Rican heritage - sons or grandsons - that were born and raised in New York) led the league to burst in popularity. Players like Raymond Dalmau, Neftalí Rivera, Héctor “El Mago” Blondet, Angelo Cruz, Georgie Torres, and Rubén Rodríguez became fan favorites through the national reach of the television. For the first time in its history, the product of the BSN reaches all the homes across the island through the iconic voice of Manuel Rivera Morales. Even though it increased in popularity, competitiveness-wise, the league was still a long way to go. As a matter of fact, during that decade the franchises of Quebradillas (1970, 1977, 1978, and 1979) and Bayamón (1971, 1972, 1973, 1974, and 1975) won nine of the ten possible championships. As a measure to increase competitiveness throughout the league, in 1980 former league president Genaro "Tuto" Marchand approved the arrival of the first imports of the league (paid by the league itself) as a benefit for the low-tier franchises. Therefore, the Panamanians Mario Butler and Roland Frazer arrived at the franchises of Morovis and Aibonito, respectfully. Historians agree that both are the two of the best imports that have ever played in the BSN. This measure of 1980 was one of great impact for the competitive level of the league, to the extent that of only three champions in the 1970s (Quebradillas, Bayamón, and Río Piedras), in the 1980s there were a total of six different champions (Guaynabo, Bayamón, Canóvanas, San Germán, Aibonito, and Morovis) and only a couple of consecutive championships (Canóvanas in 1983 and 1984). The league’s competitiveness attracted sponsors all-around the island and began BSN’s commercialization. According to San Germán’s former franchise holder (1983-86), Armandito Torres, the league sold its commercial television rights to WAPA Television for almost $1,000,000.00 per season during the 1980s.

For many people, the 1990s can be considered the "Golden Age" in the BSN. It was here where the best teams (arguably) in the history of the league competed. For example, Ponce started the decade with three championships in the first four seasons (1990, 1992 and 1993) led by Javier “Toñito” Colón, Bobby Ríos, Charlie Lanauze, and José “Papote” Agosto. Meanwhile, San Germán proclaimed itself once again monarchs of the BSN with the campaigns of 1991, 1994 and 1997. Also, Bayamón claimed the 1995 and 1996 championships, and Santurce (formerly Aguadilla) arrived at the Island’s capital and undertook one of the greatest dynasties in the history of the league. Led by legendary coach Julio Toro (top winner in the history of the league) and players José "Piculín "Ortiz, Carlos Arroyo and Orlando “Guayacán" Santiago, Santurce Figure 5 – Piculín Glitter Hair Styling conquered for four consecutive seasons (1998 to 2001). Gel According to some historians, José “Piculín” Ortiz was the first player to achieve individual sponsorships, which significantly exceeded his earnings on the court. For example, Piculín had his own hair styling gel which was distributed by Johnson & Johnson and generated over $5,000,000.00 in sales. (See Figure 5). In 1996, the league reached its peak in competitiveness with eighteen teams (San Germán, Villalba, Guayama, Arecibo, Fajardo, Caguas, Isabela, Carolina, Mayagüez, Ponce, Guaynabo, Quebradillas, Aibonito, Morovis, Bayamón, Aguada, San Juan, and Aguadilla). Prior to the 2001 season, due to some dissatisfaction in how the league was being operated, the owners of the different franchises decided to part ways with the FBPUR and run the league independently as a private entity with its own president. Additionally, in a response to threats from the BSN’s Players Association (Asociación de Jugadores de Baloncesto de Puerto Rico or AJBPR), the league created a draft for new players and a free agency in 2004. As a result, the league exploded in its commercialization and max contracts for top players reached $250,000.00 per season (five months) during the 2000s. With the arrival of the franchise of Santurce to San Juan in 1998, the role of the franchise holder was revolutionized with the performance of Angelo Medina. After his background in the entertainment industry (former manager of Ricky Martin), Medina recognized basketball as a form of entertainment. In every home game of Santurce, Coliseo Roberto Clemente (and then Coliseo José Miguel Agrelot – two of the biggest stadiums on the island) fans could enjoy from a high-quality entertainment show (dancers, pregame and halftime artists performances, in-game promotions from sponsors, and much more). Additionally, Angelo was responsible for the television coverage of the league nationwide from 2001 to 2009. For approximately $150,000.00 per season,

Medina and his own television channel (Deportes 13) could acquire (through its channel, Sports 13) the exclusive broadcasting rights of the BSN (paying himself the production costs). Even so, at the local level, franchises could sell their broadcasting rights to some regional channels (for example, Caguas with Liberty Cablevision of Puerto Rico, Coamo with Centennial Cable TV, and Mayagüez with WORA TV). Since then, the television has been BSN’s main marketing vehicle. In figure 6, a ten-phase process of the league’s commercialization is presented. Since the debacle in the Puerto Rican economy at the end of the 2000s, the BSN has been suffering from economic problems and the league is more unstable that has ever been. During the last season, nine franchises (Santeros de Aguada, Leones de Ponce, Vaqueros de Bayamón, Piratas de Quebradillas, Indios de Mayagüez, Cariduros de Fajardo, Atléticos de San Germán, Capitanes de Arecibo, and Brujos de Guayama) competed and max contracts for top players were $40,000.00 per season. Today, the collective salary CAP for each team is $400,000.00 with a hard CAP of $550,000.00, of which teams who exceed this amount ($400,000.01 to $550,000.00) would be subjected to a luxury tax. The salary CAP for max players is $40,000.00 per season (without bonuses for classification to semifinals, finals, and championship).

Figure 6 – BSN’s Commercialization Process (1930-2019)

2.2 Analysis of BSN’s Business Model

2.2.1 Value Proposition Differently to other leagues around the world, the BSN could be considered a hybrid league between the European and North American models. In terms of its objectives, traditionally it has been based on the European model and its utility maximization. Throughout the years, according to former president Lcdo. Fernando Quiñones, profits never have been the league’s primary objective. 24

Meanwhile, they focused on raise enough profits to run the league every year with the lowest operational costs. Basketball competitiveness is and has always been the league’s primary objective. Therefore, according to BSN’s Bylaws, the league’s value proposition is to promote, organize and develop men’s basketball in Puerto Rico through professional teams with a highly competitive level that get the maximum support of the fans. Also, promote a talent development platform for the National Basketball Team of Puerto Rico.

2.2.2 Customer Segment BSN’s customers or consumers can be classified into two different groups: spectators (in attendance or in the digital landscape) and sponsors (league and team sponsors).

Spectators experience the sporting event throughout two different ways: attendance in the event and experience through a given media (television, radio, webpage, mobile app, or social media). After extensive research among BSN’s personnel and different franchises’ front offices, it was visible that there was no data from past customers. League, nor the owners, know who were the customers that attended to any games during the past season, when they decided to be present in given games, why they attended to given games, and what were the most important factors in their decision-making process. Therefore, a 30-question questionnaire was developed and administered (personal and online) to people around the island. With a sample of 804 answered questionnaires, was concluded that 75.9% of BSN’s customers are men, while 24.1% of women. Also, the predominant age range between BSN’s customers is 25-34 years with 24.7% of the sample’s total (see figure 7)

Figure 7 – BSN Fans’ Age Range Figure 8 – BSN Fans’ Education Level

Of the sample, 42.7% of the customers is married and 50% of them have a bachelor’s degree as the highest level of education reached (see figure 8). Also, 31.7% of the sample earns $25,000.00 or less, annually (see figure 9)

Figure 9 – BSN Fans’ Annual Income

In the digital landscape, around 66% of the league’s total global fan base is men, and 34% women. Additionally, as responded in the questionnaires, the two biggest range of ages are 25-34 and 35-44 years (see figure 10).

Figure 10 – BSN’s Social Media Fan Base (Facebook, Instagram, and Twitter)

Questionnaires proved that the league’s history was the main reason customers become fans of the league (68% of total sample), for more than 10 years (88%). Of the 580 people who went to a game last year (2019 season), 66% of them came to the game from home, and 64% of them returned to their home right after the game. Also, 90% went to the games either their family, couples, or friends. Of those 580 respondents, 62% of them consumed food and beverages during the games.

Meanwhile, sponsors are also BSN’s customers. Sponsors choose what to support – events, teams, individual players, and league. In the case of the league, last season they partnered with 33 companies of which industries range from alcoholic beverages like Destilería Serralés & Don Q, to Artificial Intelligence Technology as WSC Sports.

2.2.3 Channels BSN uses different distribution channels to deliver its product to its customers: physical (attendance to games, television, and radio) and virtual channels (digital media).

• Attendance During the last five years (2015-19), BSN suffered a 34% decreased in its total attendance. As shown in figure 11, BSN reported a total attendance of 830,513 fans in 2015. Four seasons after, that number decreased to 549,836 (-34%).

Figure 11 (BSN’s Regular Season, Postseason, Semifinals, and Finals Attendances from 2015 to 2019)

Although tickets prices could range from $3.00-$45.00, customers affirmed in the questionnaire (77% of total responses) that prices were reasonable and preferred to buy the tickets in the stadium (73%) over the internet (27%). Also, the 804 answered questionnaires proved that almost 30% went to 2 to 5 games every season. Surprisingly, 27% of the sample went to 18 or more games during the last season (see figure 12).

Figure 12 – BSN games attended by

fans per season.

According to the questionnaires, of the 580 people who went to a game last year (2019 season), 66% of them came to the game from home, and 64% of them returned to their home right after the game. Also, 90% went to the games either their family, couples, or friends. Of those 580 respondents, 62% of them consumed food and beverages during the games.

• Television In 2009, with the arrival of former president Lcdo. Carlos Beltrán (2009- 2015), the league regained its broadcasting rights and the teams’ (national and locally) and signed deals with channels Choice, OneLink and local channel CV 24 and increased on a 53% the number of games broadcasted during the season (32 to 68) – which pathed the way to a massification on the league’s television strategy (see figure 13).

Figure 13 – Total Number of Games Broadcasted on the BSN from 2007 to 2019

In the 2011 season, BSN sold its broadcasting rights to eight different television providers or channels around the island (Dish, Liberty, Choice, OneLink, DIRECTV, TeleIsla, MegaTV, and Deportes 13). Upcoming the 2012 season, BSN signed a multiyear deal with WAPA Television (BSN’s official broadcaster during the 1980s) that led them to become the league’s official television channel. Since then, nationwide channel WAPA Televisión (through its subchannel WAPA Deportes) has broadcasted most of the BSN's television games. In 2014, the league broadcasted through WAPA Deportes, Dish, and DIRECTV 63% (138/219) of its games – the most in its history.

Last season, the BSN broadcasted, through WAPA Deportes and Liberty, 97 of its total 201 games (48%). As in stadium attendances, Nielsen Ratings have reported a decreased during the years – excluding Households and Persons 50+ years who have maintained constant during the last five years (2015-2019). For example, Households and Persons 50+ years have averaged 5.8 and 4.8, respectfully (see figure 14).

Figure 14 – BSN Finals’ Nielsen Ratings (2016-2019)

• Radio Since its arrival to the league in 1931, the radio has played a crucial role within the BSN and the franchises’ marketing plans. Like its television deal, the BSN had until the 2018 season a partnership with radio station WKAQ in which games – different from the ones on television – were broadcasted. During the past two seasons, the league decided to use the radio’s annual budget ($30,000.00) and invest it on social media. Anyway, six 29 of the nine franchises broadcasted all of their last season’s games through a local radio station (Aguada – 850 AM, Ponce – 550 AM, Bayamón – WIPR 940AM, Quebradillas – 1120 AM, San Germán – 760 AM, and Arecibo – 1230 AM).

• Traditional Media Historically, El Nuevo Día (known as ENDI) has been the BSN’s official newspaper. ENDI is the largest newspaper in Puerto Rico. Its content is distributed through a print edition from Monday to Sunday, the digital edition (El Nuevo Día e- paper), the most visited local news website in the country (endi.com), a mobile application and social networks. In 2014, ENDI printed over 210,000 copies from Monday to Saturday, which were distributed among the island’s 78 municipalities. On Sundays, ENDI printed over 235,000 copies. During the past years, ENDI and BSN’s partnership consisted of an exchange valued at $150,000 dollars in commercial spots on the newspaper printed edition, which the BSN used at its discretion during the season. On Sundays (when the BSN normally published it), half-page black and white commercial spot cost is $4,189.68 (if it has color, +$2,000.00 extra). Full-page black and white commercial spot cost is $7,632.00 (if it has color, +2,000.00 extra). In last season, the exchange’s value was $100,000.00. Through these commercial spots, the BSN Additionally, the BSN has a similar strategic partnership with billboard media industry leader bMedia.

• Digital Media In 2016, with the arrival of former president Lcdo. Fernando Quiñones (2016-2019), the league engaged in an incredible digital revolution (social media, webpage, and mobile APP). a) Social Media After the development of well-defined digital strategy in January of 2018, the league increased over 14% in its global digital fan base (league digital fan base + team digital fan bases + player digital fan bases) in a two-year lapse (see figure 15). League-wise, digital fan base (Facebook, Twitter, and Instagram) accounts for 399,314 users – making them the fifth league in the Americas with the largest fan base. Throughout social media, the BSN promotes games and events, enhances player qualities and performances, broadcast live games, engage with fans through creative and innovative content, and much more. According to the developed 30 questionnaires’ answers, 86% of the total of 804 respondents follow the BSN on social media platforms.

Figure 15 - BSN’s Big-3 Global Digital Fan Base in 2019 (Facebook, Twitter, and Instagram) b) Webpage In www.bsnpr.com, the BSN presents its annual calendar, provides real- time game data, delivers content (news, pictures, and videos), provides historic and current information from all its players, and promotes its sponsors. According to league records, after its refurbishment prior to the 2019 season, its website has been one of the biggest innovations during the past five years. After recording 31,521 users during the 2018 season, in 2019 a record – 204,271 users were documented (+548% from 2018 to 2019). Additionally, in 2018, 259,136 visits were recorded. On 2019, visits reached 1,849,546 during the season (+613.7% from 2018 to 2019). Age range from 25-34 years is the predominant sector among the total users that visited the webpage during the 2019 season (see figure 16).

40% 34% 30% 28%

20% 16% 12% 10% 5% 5%

0% 18-24 25-34 35-44 45-54 55-64 65+

bsnpr.com

Figure 16 - www.bsnpr.com's users age range (2019) 31

c) Mobile APP Through their mobile APP, the BSN presents its annual calendar, provides real-time game data, engage with fans through creative and innovative content, and much more. Available on iOS and Android operative systems, over 30,000 cellphones have downloaded and installed the BSN App.

2.2.4 Customer Relationship This segment of the BSN’s Business Model Canvas refers to how businesses find, keep, and grow their customers. After identifying the BSN’s two different kinds of customers: spectators (in attendance or in the digital landscape) and sponsors (league and team sponsors), it is mandatory to present how the league communicates and relates with them. In the case of spectators, league and teams rely on its basketball games competitiveness as its primary tool to attract, maintain, and reach more fans (customers). In the digital landscape, league and teams focus all their efforts on social media as the fan’s primary engaging tool. Meanwhile, for sponsors, historically has been a league’s president task. League president oversees finding as much as possible sponsors, to run (at the lowest cost) the league. Therefore, the league president is the one in charge of finding prospective sponsors and furnish actual sponsors into a long-term alliance.

2.2.5 Resources

• Political Relationship with the United States Historically, the political relationship between the United States and Puerto Rico has greatly benefited Puerto Rican basketball. Being a Commonwealth of the United States, opened the door for children and grandchildren of Puerto Ricans (what were called Nuyoricans) born on the island to play like natives in both the local league (BSN) and in the national team. During the 1970s, the first Nuyoricans arrived at the island. Legendary players like Raymond Dalmau, Neftalí Rivera, Rubén Rodríguez, Georgie Torres, and many other players arrived at the BSN and elevated significantly the league’s competitiveness. Prior to the 2000 season, FIBA banned the usage of these players in the BSN. In 2007, Nuyoricans were once again allowed and have been playing since then. As a matter of fact, 32% of the league’s native players and 58% of Puerto Rico’s National Team’s roster are considered Nuyoricans.

• Stadiums A great resource that BSN has in its favor is the stadiums where its teams play. Unlike many stadiums in the Americas, all the BSN’s coliseums have air conditioning systems, and their spectator capacity is high (see figure 17). Coliseum’s maintenance has left much to be desired (especially the stands and the locker rooms). All the coliseums are properties of the municipalities of the towns they play in and are operated day-by-day by designated personnel by the municipalities themselves.

Figure 17 – BSN’s Coliseum Capacity

• League’s Brand and History From the developed and administered questionnaires, it was acknowledged that from the total 804-sample, 68% of the respondents said that they became fans (71% of the total sample) of the league because of its history, its teams, and its players. Being one of the oldest leagues in the world has led the league to have a solid brand and history among the island. Even with all its erratic behaviors from management and economic problems, the BSN is way far ahead from every other league in Puerto Rico – in terms of its following and commercialization.

• Passionate Fans Although baseball is the sport with the biggest success among the island, basketball is undoubtedly the most followed sport across Puerto Rico. In the world, only Lithuania, Philippines, and Puerto Rico have basketball as their number one sport. Every time the National Team plays, the 33 whole island of Puerto Rico bursts in support of its team. As a matter of fact, in April of 2019, FIBA reported that Puerto Rico ranked fourth in its FIBA World Cup Qualifiers’ total attendances, with 48,732 fans (an average of 8,826 per game) among the 80 countries that participated in the qualifying system.

• Players, Coaches, and Referees Quality According to FIBA’s NIKE World Basketball Ranking, Puerto Rico’s Men National Basketball Team is ranked 17th among a total of 164 teams. Historically, Puerto Rico has been one of the best basketball countries around the world. Its main actors (players, coaches, and referees) are top tiers within their unique categories. For example, Puerto Rican players compete in different leagues around the world and when they finished their seasons (October to May), they travel to Puerto Rico and play in the BSN from May to July. In recent years, coaches from Puerto Rico have also participated in different leagues of America. For example, in this year’s season in Mexico, 7 of their total 17 teams had Puerto Rican coaches at the helm. Also, Puerto Rican referees are excellent quality (although they are highly criticized during the BSN season by the fans). During the last FIBA World Cup, Puerto Rico had three referees participating among the total 56.

2.2.6 Activities During the year, the BSN conducts a series of activities that are key within their operation: basketball games, all-star weekend, marketing partnerships, TV production, and player and coaches’ development.

• Basketball Games During the past years, BSN’s franchises play around 32-36 games per season, with equal local and away games. Last season, a total number of 162 games were played during the regular season (March 1st to June 7th), where each team played 18 home and 18 away games. This is the BSN’s main activity every year. • BSN All-Star Game Every brand has a star product. In the case of the BSN, the flagship event and product have been the All-Star Weekend (Wikén de Estrellas), for the past three seasons (2017, 2018, and 2019). After 2011’s All-Star Game in Arecibo, former president Carlos Beltrán affirmed that under his presidency (2010-2015) there were not going to be any more All-Star Games because of the huge economic loses it represented to the league. In 2017, the BSN brought back its All-Star Game, but in an All-Star Weekend concept (Wikén de Estrellas) to Aguada – league’s attendance leader back then. In its weekend event, the league 34 reported two back-to-back sold outs. The event’s first day was based on a Celebrity Game, in which artists and pop singers around the island played in front of over 6,000 fans. In Wikén de Estrellas’ second day, the All-Star Game had a similar success that year.

• Marketing Partnerships Every year, finding and developing long-lasting relationships with sponsors around the island was one of the most important tasks of the league’s president. The league had 33 marketing partnerships during the last season (2019).

• Television Production During the last season, BSN produced through a local broadcast company (The Production Crew) a total of 97 games (48% of league’s total games), through the channel of WAPA Deportes (69 games) and Liberty’s television provider (28 games).

• Coaches and Player Development As BSN’s mission states, the league must promote a talent development platform for the National Basketball Team of Puerto Rico – which includes league and players. Puerto Rico’s National Basketball Team 12-man roster was integrated by 9 actual or former BSN’s players. Additionally, all its coaching staff works for different teams around the league.

2.2.7 Partners By being Puerto Rico’s biggest professional league, the BSN has a big number of partners that play a key role during each season. First, and most importantly, its actual nine franchises and its franchises owners – which are the league’s Board of Directors. Secondly, the fans who have enjoyed every single season since 1930. Thirdly, players (135 players; 15 players per team) and coaches (around 45 coaches; an average of 5 coaches per team). Other crucial partners are referees (30) and scorers (30). Since its foundation, the Government and the municipalities of each franchise have played a vital role within the league. As a matter of fact, from 1930 to 1954, the Government’s agency Department of Parks and Recreation managed the league. Other important actors within the league’s operation are the media, agents, service providers (The Production Crew), TV providers (WAPA Deportes and Liberty), and data providers (Genius Sports).

2.2.8 Revenue Structure As stated in the 2019 Bylaws, the BSN makes money through seven means: sponsorship agreements; its television broadcasting rights; team’s participation, and ticketing fees; All-Star Weekend; league’s new franchises; and basketball-related income (fines).

• Sponsorship Agreements Marketing partnerships are the BSN’s main revenue stream. The BSN’s sponsorship related income from 2013 to 2017 are reported in figure 18. The league had 33 marketing partnerships during the last season (2019).

Figure 18 – BSN’s Annual Sponsorship Related Income (2013 – 2017)

• Television Broadcasting Rights Television broadcasting rights could be BSN’s second-biggest revenue stream. After face-to- face interviews with the presidents of all the other professional leagues in Puerto Rico (LBPRC, LPR, LVSM, LVSF, and BSNF), it was acknowledged that the BSN was the only league of the island where a specific channel pays for the league’s broadcasting rights. All the other leagues divided its television commercial spots with the channel – BSN does it also with actual television partners. During the last season, the league earned over $400,000.00 by selling its broadcasting rights to its two different television partners (WAPA Deportes and Liberty).

• Team’s Participation and Ticketing Fee According to the league’s bylaw, each team must comply with the quotas established by the league (participation fee and ticketing fee). Every franchise must pay the league $20,000.00 as a participation fee during the regular season, and $10,000.00 for every postseason series participation (teams that reached the finals are supposed to pay $50,000.00). Additionally, franchises must pay $0.50 for every sold ticket with a max of $25,000.00 per team. Annually, these quotas averaged $550,000.00 for the league – which constituted almost the league’s yearly budget. Due to the franchises’ economic problems, former president Lcdo. Fernando Quiñones decided not to charge them the participation ($1,300,000.00) and ticketing fees ($812,563.50) during his presidency (2016-2019), which led to a saving of $2,112,563.50. From 2009 to 2015 teams paid $2,380,000.00 in participation fees, and $1,539,596.28 in ticketing fees.

• BSN All-Star Weekend After being considered a colossal expense for the league, the All-Star Weekend (Wikén de Estrellas) has been since the 2017 season another revenue stream for the BSN.

• League’s New Franchises and Basketball Related Income Additionally, the cost for a new franchise within the league is $500,000.00, which could be paid on a payment plan. In recent years, this amount has been reduced to $250,000.00 for the next three years or until the league reaches ten competing franchises.

2.2.9 Cost Structure Two of the BSN’s biggest expenses are its annual FBPUR’s affiliation and its television production. Additionally, other expenditures like administrative expenses are important to emphasize.

• FBPUR’s Affiliation Fee After parting ways with the National Basketball Federation of Puerto Rico (FBPUR) prior to the 2001 season, the BSN committed to pay $130,000.00 for the FBPUR’s annual affiliation. In exchange, the BSN was accorded to receive FBPUR’s affiliation and the marketing rights of Puerto Rico’s Men National Basketball Team (which has not been received since 2015).

• Television Production Historically, this has been the BSN’s biggest expense. TV’s production costs for the whole season could round up to an average of $445,014.60 (2013 to 2018). BSN’s television production cost per game can reach up to $5,000.00. 37

• Other Expenses (Administrative Expenses) The BSN’s administrative expenses could reach as much as $500,000.00 per year. In the BSN’s offices, there are only three employees (director of operations and two executive assistants) and six service providers (president, vice-president, tournament director, director of communications, director of digital media, director of referees).

2.3 Sustainable Strategic Framework Development Process

To safeguard the well-being of the BSN and all its components in the long-term, a sustainable strategic framework was developed in this research paper divided into three main pillars: governance, people, and the environment. To achieve this, the process consisted of six fundamental steps:

• Understand the fan base and audience of the BSN: For this, a questionnaire of 30 questions (see Annex 3) was distributed in person and digitally. Here several general conclusions could be reached such as the main consumer of the BSN belongs to the age range of 25 to 34 years (24.5%, see figure 7), has a high school (50%, see figure 8), earns less than $ 25,000.00 USD annually (31.7%, see figure 9) and attend 2-5 home games of their favorite team during the season (29.5%), see figure 12).

• Benchmark Analysis: Here some of the best sustainability practices and strategies in the sports industry were analyzed. Among the leagues and entities studied were the sustainability strategy of the FIFA World Cup 2022, the sustainability strategy of the Tokyo Olympics 2021, the sustainability strategy of LaLiga in Spain and the sustainability activities that the two leagues execute annually. most important basketball games worldwide: NBA and EuroLeague.

• List of 30 sustainability related topics linked to the BSN: Following the technique of the sustainability strategy of the FIFA World Cup 2022, 30 relevant sustainability topics (out of the 100 that were identified by FIFA) were chosen when executing the BSN season annually.

• Personal interviews: In one-to-one meetings with 30 BSN actors, the 30 topics identified were prioritized according to each one's reality during each BSN season on a scale of 5 to 1, with 5 being the most important, and 1 not important (see annex 2).

• Response analysis: Once the 30 personal meetings were completed, the total responses were analyzed through a standard deviation analysis to identify the variability in the responses of each of the interviewees. In this way, we could observe (see figure 19) which of these 30 identified topics had more importance and therefore be able to abound in explanation and recommendations on these topics when developing the strategic sustainability model.

BSN's Sustainabilty Topics' Standard Deviation Topic 1 - Accesability 1.134920032 Topic 2 - Adaptability of 1.187434209 infrastructure and services Topic 3 - Air, light, noise, and other forms of pollution 0.722315119 Topic 4 - Climate change 0.710939366 Topic 5 - Community cohesion 0.489897949 Topic 6 - Compliance and accountability 0.374165739 Topic 7 - Cultural understanding 0.489897949 Topic 8 - Diversity and anti-discrimination among participants and attendees 1.326649916 Topic 9 - Diversity and anti-discrimination in the workforce 0.714142843 Topic 10 - Economic performance 0.40824829 Topic 11 - Freedom of expression 1.962635272 Topic 12 - Healthy living 0.707106781 Topic 13 - Human trafficking and abuse 1.160178647 Topic 14 - Land use and biodiversity change 0.509901951 Topic 15 - Local value chain and business development 0.637704216 Topic 16 - Match integrity and anti-doping 1.640121947 Topic 17 - Post-tournament asset use 1.011599394 Topic 18 - Community development and engagement 0.781024968 Topic 19 Safety and security for attendees, participants, and communities 0.822597512 Topic 20 - Traffic flow 1.118033989 Topic 21 - Transparency and anti-corruption 0.476095229 Topic 22 - Volunteerism 0.734846923 Topic 23 - Waste generation 1.041702898 Topic 24 - Water production and use 0.943398113 Topic 25 - Workers’ families’ and communities’ welfare 2.179449472 Topic 26 - Workers’ living conditions 1.166190379 Topic 27 - Workers’ health and safety 1.05902713 Topic 28 - Workforce development 1.022816624 Topic 29 - Working conditions 0.92736185 Topic 30 - Youth education and empowerment 1.322875656 Figure 19 – BSN’s sustainability identified topics standard deviations.

• Sustainable Strategic Framework: Based on what was analyzed, a sustainable strategic framework was developed divided into three fundamental pillars (governance, people, and the environment) with 15 objectives and recommendations per pillar to guarantee the well-being of the BSN and all its components in the long-term run.

BSN’s Sustainable strategic framework development process

Understand the Benchmark List of 30 1 fan base and 2 analysis 3 sustainability audience of the related topics BSN linked to the BSN

One-to-one Bsn’s sustainable Response personal strategic framework 6 analysis 5 interviews

Figure 20 – BSN’s Sustainable Strategic Framework Development Process

III. BSN’s SUSTAINABLE STRATEGIC FRAMEWORK AND OBJECTIVES

To enhance BSN’s progress in the long term and guarantee the well-being of all its stakeholders for the subsequent years, a sustainability strategic framework was developed to set the groundwork of BSN’s Sustainability Strategy. Organized in three fundamental pillars (governance, people, and environment), includes 15 strategic objectives relevant to the annual execution of the BSN (See Figure 21).

Figure 21 – BSN’s Sustainable Strategic Framework Main Pillars

BSN’s Sustainable Strategic Framework: 15 Objectives

Sustainability Objectives SDGs Alignment Pillar

-Strategic planning

-Transparency, accountability, & compliance

-Economic Performance GOVERNANCE -sporting integrity

-Safety & Security

-Adaptability of Infrastructure & Services

-Workforce Development

-Community Cohesion

-Cultural Understanding

pEOPLE -Diversity & Anti-Discrimination Policies Among Participants, Attendees & Workforce

-accesibility

-Workers’ Living Conditions

-energy emissions and mobility

-Waste Environment

-Water

-sustainable construction

Figure 21 – BSN’s 16 Sustainable Strategic Framework objectives organized according to SDGs alignment and sustainable pillars.

5 6

2 2

5 4

Franchise Owners Former League Presidents General Managers Players Coaches Referees Other

Figure 22 – BSN’s stakeholders who participated in the one-to-one interviews during the strategy development process.

3.1 Governance Pillar

The social exposure that professional sports has, in addition to its economic relevance as an industry, means that the good ethical and governance behavior of all the actors that make it up must be exemplary. A sustainable sporting entity in this pillar is one that has ethics, integrity and regulatory compliance in its well-established governance and management systems, and that applies it from this area at all levels of the organization. Sporting entities must ensure that all its principles, practices, policies, and procedures are known and met in terms of security, integrity, transparency, privacy, and compliance.

3.1.1 Strategic Planning:

According to the Cambridge dictionary, strategic planning is defined as the process in which a company’s executives decide what they want to achieve and the best actions and use of resources for doing this (1995). Broadly, strategic planning consists of having an articulated plan for an organization – mission, vision, values, objectives, and goals. To convert that articulate plan to a strategic one, market data such as what your customers think of your product or services, how do your competitors see your business, what’s happening in your environment or industry, etc. must be added to the equation. Having a strategic plan drives organizational engagement through individual

43 goals allowing everyone within the organization to know what their role is within the global strategy and what must be accomplished from their end. Everyone must be aware of their piece in the puzzle. Having an articulated plan complemented with market data and organizational engagement leads to an organizational transformation in terms of actions and behaviors. In administrative terms, strategic planning is practically non-existent at BSN. However, in technical-tactical terms, if it is practiced among the coaches at the beginning of each year, the strategy for their respective teams is outlined. Without a doubt, introducing this plan to the BSN would be of great help in the long term and would greatly contribute to the synergy between all its stakeholders, and would help in the overall direction of the league in administrative terms. At BSN there is no long-term planning, all administrative decisions are made from season to season - from global league decisions to individual decisions for each of the participating teams. To eliminate the improvisation that reigns in the BSN year, it is recommended that a strategic plan be established for the BSN for the term of each president (four years) where the goals, objectives, and annual budgets are established by each of the league departments. Likewise, the league should require each of the franchises to do the same. To ensure compliance with the provisions of the selected strategic plans, it is recommended that semiannual and annual meetings be held between the BSN and the managers of the different franchises.

3.1.2 Transparency, Accountability, and Compliance

The level of professionalization of basketball has increased enormously in recent years, largely thanks to the commercialization of audiovisual rights, which has allowed the industry to gain enormous economic weight. This professionalization implies that basketball franchises need to adapt their structures and implement management systems, define functions, formalize procedures and policies; all with the aim of scrupulously complying not only with the regulations that apply to them but also incorporating all those best practices followed by listed companies, which are more advanced in these matters. In this sense, the transparency and compliance requirements of the markets have also evolved, demanding greater informational openness to society and the availability of more financial and non-financial information, making organizations to improve their information, and reporting systems. This objective relies on the application of transparency, accountability, and compliance policies, procedures, and practices throughout all the stakeholders involved in the annual execution of the BSN. If the BSN intends to increase its business sustainability, it needs improve its access to team’s financial data. Although BSN’s Bylaws indicate that every franchisee must submit to the league their respective account statements and financial reports, they do not do so. According to the

44 league bylaws, if a team does not submit the documents before the 31st of December of each year, the franchise is subjected to $5,000.00 fine and it cannot compete on the upcoming season until it does so. According to the former president Lcdo. Fernando Quiñones around three teams submitted their documents – no fine was also administered. In order to have a clear idea of the team’s financial data, for the purpose of this investigation, face-to-face interviews with team owners were conducted (see annex 4). Additionally, per request of the BSN’s Players Association (Asociación de Jugadores de Baloncesto de Puerto Rico or AJBPR), the amount of money of each players’ contracts must be classified and it cannot be available for the general public. Each contract has an NDA – Non- Disclosure Agreement. Some people believe that this request was intended in order to players submit different amounts when filling state contributions. During the past season, the average salary of BSN’s players was $20,132.15. Although the max contracts of players are $40,000.00 per season, it is rumored that all teams violate this cap. They sign two contracts with each player: the one they report to the league (that includes the max of $40,000.00) and the one they don't report (which can exceed the $40,000.00). According to a league source, there are players in the league earning over $200,000.00 per season. A possible solution to this dishonest problem is establishing a financial regulatory system, like Euroleague’s Financial Stability and Fair Play Regulations. This way, the league can ensure good financial practices, guarantee financial transparency and credibility of participating teams, and ensure the financial stability of the teams and the league. Also, this financial regulatory system will drive franchises to install internal financial systems, and provide a structured audit report by external entities at the end of every season. On the other hand, compliance and accountability refer to how league and franchises officials comply with internal and external league policies and regulations, while guaranteeing accountability for good or bad actions being engaged. In the past, we have seen major flaws around compliance with the BSN bylaws according to various situations (mostly regarding to players’ salaries). In fact, in the one-to-one interview process, all the interviewees agreed that this topic related to economic sustainability should be the main priority with respect to the BSN on the long-term. For example, if we analyze the standard deviations of the 30 sustainability topics analyzed, we can see that the lowest value was this topic with 0.374166 (see figure 19). Measures such as the implementation of the financial fair system will help greatly to correct this problem.

3.1.3 Economic Performance

Historically, the professional basketball industry has been used to existing with significant financial problems and large debts, because the usual dynamic was to prioritize sports results over

45 the business perspective. However, since the introduction of the Financial Fair Play concept by UEFA in the soccer industry, progress has been made towards a consolidation of the teams’ economy that has improved their economic and financial solvency. The teams have assumed that, although the essence of their activity is sport, they must find a balance between the orientation towards sporting results and the perspective business, to last over time. Economic control is therefore the fundamental basis that allows teams to move towards greater professionalization and business focus. A favorable economic situation will allow teams to invest resources to progress in the implementation of a strong government, care of the environment and contribution of value to society; the three main pillars of sustainability. This topic addresses the economic value that the investment to produce each year the BSN may generate before, during and after the tournament each tournament in Puerto Rico. BSN’s annual preparation, production and post-tournament activities generate a significant impact in Puerto Rico’s economy (around twelfth million dollars in gross income), the island’s natural environment, and on local communities of the participating franchises. Without a doubt, each of the teams in the BSN represents an economic injection for each town. Although there is no data or economic studies to help prove it, businesses around the stadiums and in the towns where the BSN is competing have confirmed the increase in sales that each of their businesses presents during game days. Despite basketball’s popularity among the island of Puerto Rico, where it is considered the island’s primary sport, its professionalization as a business has left much to be desired. Although the league had an explosion in its commercialization during the 2000s, it has been suffering from an economic crisis during the past decade. Every year there are fewer franchises competing in the league, lower budgets for each team, higher owner contribution, lack of different revenue streams, lower TV ratings reported by Nielsen each year, less government contribution for each team, and more debts in the operation of the remaining franchises. Although BSN’s outreach has significantly been reduced in recent years, the league is still considered Puerto Rico’s preferred league among fans. Reality is that the direction the league is heading is negatively alarming. In fact, this sustainability topic was the second with the least amount of variability among stakeholder responses (see figure 19) with 0.408248 - indicating that all interviewees agree that the BSN has an immediate need to generate money, and that the franchises should be self-sustaining. Interesting is the fact that although everyone agrees with this need, teams have been doing the same traditional economic practices year after year. The franchises are not tempered to the technological reality in which we live and updated with the best practices across the industry. For this reason, innovation should be the spearhead of BSN's economic performance in the near future. There’s a need to identify new ways of doing business - what we commonly call in entrepreneurship "getting out of the box".

In today’s volatile and unpredictable digital area, innovation within sports organizations plays a vital role. What a sports organization communicates, when it communicates it, where it communicates it, to who it communicates it, and how it communicates it has changed in recent years due to the technological outreach. Therefore, teams and leagues must discover new and innovative ways to communicate and interact with their consumers, the fans. Teams and leagues that enhance innovation tend to achieve greater results in their day-to-day business operations. Also, innovation allows teams and leagues to enter markets faster and deeper and helps them to sustain longer success in their business operations. According to Everett Rogers’ Diffusion of Innovation theory (see figure 23), team owners are considered by fans to be laggards - the last to adopt an innovation.

Figure 23 - Everett Rogers’ Diffusion of Innovation

Excluding the league’s investment on its digital platforms over the past two years (which led to astonishing results, but unfortunately the league did not renew the contracts of the people in charge of it after the past president ended his time at helm), innovation among teams and the league is almost non-existent. Therefore, teams and the league must identify possible ways to innovate the channels in which fans consume the BSN (in the arena, television, radio, traditional media, and digital media). A possible alternative to this problem could be the creation of a league’s Business Operations and Club Services Department or BOCS (like the one Euroleague created in 2017). In here, the league will help to work with its teams across all commercial areas to maximize revenues and create long- term business sustainability. This department will provide custom-made advice and consultation to each team of the BSN on a wide variety of business topics (which include, but are not limited to sponsorship, ticketing, premium seating, digital, merchandising and licensing, communications, fan engagement, arena usage, venue development, organizational structure, and executive recruitment). Also, this department will make available to its teams the best global business practices among the 47 worldwide sports industry. The BSN will gather quantitative and qualitative data from professional teams and leagues all around the world, which will be organized, analyzed, and shared with all the teams to provide key benchmarking of the best practices in the sports industry.

3.1.4 Sporting Integrity

In the sports industry, integrity is an element of special relevance for leagues and teams since gambling and doping is an activity regulated and therefore legal breach entails administrative and criminal sanctions that can seriously injure a team or its players; also affecting the reputational field of all the industry. Beyond mandatory legal compliance, dishonest practices in sport have several negative consequences and are one of the biggest threats to basketball globally. These practices reduce the credibility of the sport and industrial and affect the quality and ultimately to the proper value of the competition. Education and awareness play a role vital in the prevention of fixes: all club members must understand the relevance of keeping the competition clean and honest. Likewise, the mechanisms established by the league and teams to ensure this principle, as well as to detect and manage possible cases. The BSN should hold annual integrity workshops with league stakeholders, to let them know what is allowed and what is not. Right now, betting is prohibited in the BSN due to its operation in Puerto Rico (an island where sports betting is not allowed by law), and due to the lack of economic resources, and how expensive doping tests could be, controls on this type have not been carried leaguewide since the 2015 season, where it cost the league over $ 30,000.00 to provide tests to all its players. Since then, the BSN’s Board of Directors has decided not to do them again.

3.1.5 Safety and Security among Stakeholders

The league and all its franchises are obliged by law to comply with all measures regarding the organization of matches in their sports venues. The requirements that the Puerto Rican law requires teams in this matter are intended to always guarantee the safety of fans during sporting events, ensuring effective management of basketball matches in the organization, risk analysis, crisis and emergency management. To effectively comply with these measures, teams must have a preventive and integrated security and risk strategy, and an adequate implementation of the compliance system. Failure to comply with these requirements means that all team workers are exposed to all kinds of responsibilities. In recent years, the BSN has paid more attention than ever to this topic. Providing a

48 space of trust and safety to the fan has been a priority in recent seasons. At such a level, that each team is obliged to identify a safety director and present their safety plan for each game they carry out in their respective stadiums. Now more than ever, with the COVID-19 pandemic, ensuring the health and safety of all BSN stakeholders must be the priority. In fact, in the interviews it was confirmed the priority that this topic should have in the possible sustainability strategy that is developed since it was one of the lowest values with 0.822597512 (see figure 19).

3.1.6 Infrastructure

Leagues and teams have the responsibility as organizers of their sporting events, and for any event that may occur in it. That is why current regulations require teams to comply with a series of requirements in their facilities, to guarantee spectator safety, universal accessibility, and an adequate and effective response to possible emergency situations. In addition, the stadium infrastructures must also meet certain standards to guarantee the quality of the show and the audiovisual product. For all these reasons, it is essential that teams know the regulations in this regard and make sure that their facilities are properly prepared. The nine stadiums where the BSN matches are held belong to the municipality. The administrators of said infrastructure is the department of recreation and sports of each town. For this reason, the structures have suffered from marked deterioration and lack of maintenance due to the political corruption that has reigned on the island in recent years. All teams, except Ponce, who pays the municipality a monthly fee for the use of his arena (around $50K per season), have free leasing agreements (including the cost of utilities) for the length of the season (4 to 5 months). To be able to maximize operations and monitor other sources of income for each of the teams, it would be ideal for each of the corporations that operate each franchise to be the administrators of the structure. Each franchise should reformulate its contracts with each municipality and aim for it to be annual and not just for the length of the season. This would help teams to be able to generate income (that goes beyond basketball) with other activities such as concerts and restaurants. It is worth mentioning that in this renewal the teams should aspire for the municipality to take charge of the payment of utilities (water and electricity) since it is extremely high and is not cost-effective for them. In the past, teams such as the Cangrejeros de Santurce (with the Roberto Clemente Coliseum) and the Capitanes de Arecibo (with the Manuel Petaca Iguina Reyes Coliseum) have carried out this practice and it has been of great benefit. In Santurce's case, Angelo Medina, owner of the Cangrejeros, used the coliseum to his advantage and sold sponsorship packages that housed all the shows that would take place in the coliseum. Therefore, being the only coliseum in Puerto Rico in the capital at

49 that time (prior to 2004), it was of great benefit to the operation of the team during the offseason months.

3.2 People Pillar

The evolution of professional basketball has given rise to a global industry of prominence, that its social impact now goes beyond constituting an economic engine through job creation. Given the nature of the business, the social sphere must be central to the strategy of all teams and league. As representatives and visible image, they should be an example of good practices and awareness. To this end, the establishment of prevention and action policies, support for equality and the fight against discrimination, must be added new policies aimed at making the work environment a more inclusive, healthy and conducive place for the development of people. This pillar acts in two different dimensions simultaneously: internal (employees and workers) and external (society and community). Internal social management is the branch of this pillar that affects employees and industry workers. Establishing policies to improve labor relations is the best way to have employees involved and motivated, translating into greater productivity. In turn, this will affect the external perception of the club as an employer brand. Meanwhile, external social management is the area that affects the community. Leagues and teams have an inherent responsibility to society, and especially to the community of which they are a part.

3.2.1 Workforce Development

The basketball industry is becoming more and more relevant not only socially speaking, but also from an economic point of view. The increasing professionalization of the sector demands that teams adopt practices that make them increasingly like listed companies. Among these practices is the attraction and retention of talent, a key element for the growth and creation of value of organizations. Ensuring that employees form the best possible team, that they are motivated and believe in the entity's project, constitutes today a challenge for most companies and organizations. Trends show that, increasingly, factors other than salary are the most relevant when it comes to attracting and motivating people: work-life balance, identification with values , or the type of environment that the company can offer, among many others. Establishing policies, improving communication, and offering development and promotion opportunities will help teams position themselves as attractive employers. As for the BSN decision-makers, the vast majority are businessmen who have been successful in other industries and come to the sport with the illusion of repeating the achievements in this

50 industry. Sometimes it works, but sometimes the peculiar nature of the sports industry forces them to fail. Likewise, the general managers and directors of most of the teams are professionals without any kind of academic preparation in sports management. For this reason, many decision-makers do not have the necessary academic preparation to strive in these kinds of positions. For this reason, the BSN should aspire in the future to provide academic training to its workers. The league, as the main league in the country, could establish alliance ties with university entities in Puerto Rico and develop some type of online education program with topics such as sports marketing, sports medicine, scouting and analytics, sports journalism, etc. In this way, the league could gradually develop leaders capable of guiding it with the necessary experience and knowledge towards a better future. Additionally, improving continuity in personnel is key. Since its birth in 1930, the BSN has had a total number of 27 presidents. The average length of each presidency is three years. Of the 27 presidents, Genaro “Tuto” Marchand (1978-1988) and Héctor “Hetin” Reyes (1989-2000) has been the longest at the helm with 11 and 12 years, respectively. During the past four presidents (Henry Neumann, Félix “Felo” Rivera, Carlos Beltrán, and Fernando Quiñones), every time the presidency changes league-personnel does so, as well. Like in politics, every president - once elected among the team owners - fires the previous staff and brings his own personnel. Therefore, continuity in personnel and business processes is non-existent in the BSN. If the league aspires to improve its business sustainability, this is something that requires immediate change. For example, in the best basketball leagues around the world the presidents held their titles for 30 years (for example, David Stern in the NBA from 1984-2014) and 20 years (for example, Jordi Bertomeu in the Euroleague from 2000 - present). To many, the golden age in the BSN was the 1980s and 1990s. Therefore, during these years, there were only two presidents in the league - Genaro “Tuto” Marchand and Héctor “Hetin” Reyes. Allowing presidents and their personnel for more than four years guarantees long-term planning and projections for the BSN.

3.2.2 Community cohesion

In general, sporting organizations have understood and assumed the great role they have as agents of social change, and at the same time the responsibility they maintain with their community. For this reason, it is common for many teams to have social projects or volunteer in social initiatives. This approach is correct, but to move towards a sustainable club management model, social action and social responsibility must be integrated into the business management and strategic vision. To do so, the socio-economic needs of the club environment must be identified to establish a strategic plan and respond to those social demands. In this way, the actions carried out by the league or teams will

51 be guided with a purpose and responding to the real needs of its community. On the other hand, the intrinsic activity of the basketball industry generates a social impact, especially at an economic level, which is generally positive. Leagues must work to maximize the positive social impact of their activity and minimize negative impacts, especially through proper planning of their events in coordination with local authorities. The NBA has mastered the application of this concept within a professional basketball league with its social responsibility program called NBA Cares. Through this program, and its eight subdivisions, the league has achieved astonishing results that strive to end poverty, ensure world prosperity, and protect the planet for future generations. Therefore, the BSN must emulate this initiative like the EuroLeague did with its One Team program and emerged itself within the Puerto Rican communities with initiatives that aspire for the worldwide welfare. To improve this area, the BSN needs the help of its protagonist – the players. Having them engaged in the idea will guarantee success not only for the league but for the player as well. The BSN’s players must acknowledge that this type of social responsibility program helps their image and enhances their “hero” quality among youth. Additionally, these programs must be built on the foundation of strong partnerships with internationally recognized community organizations, which continue to positively impact lives around the world. These strategic partnerships will provide the BSN and its teams and players the opportunity to address a variety of social issues. Beyond representing a physical activity that promotes personal well-being, sport could represent a school of life for youth. It provides a development platform for all types of skills, from the importance of teamwork to the sense of accountability for one's own work. In the past, we have seen how BSN teams have decided to invest resources in the development of basketball in their towns and have paid dividends. Being able to offer a life education to youth must be the north of any club or franchise that decides to invest in its minor categories. Although the BSN regulation stipulates that all teams must work with the development of youth basketball, only two teams right now invest time and money in the youth of the town. Therefore, premise of the regulation must be regulated more rigorously since it implies many benefits not only for the boys and girls of the community, but also for the team that carries out this practice in the long term.

3.2.3 Cultural understanding

Without a doubt, cultural understanding is one of the BSN's greatest tools. Given its beginnings in 1930, the BSN has accompanied Puerto Ricans throughout history. In its 90 years of basketball, the BSN has been able to create a sense of identity and belonging throughout the Puerto Rican consumer. In fact, in the interviews carried out this premise was one of the topics with the least

52 variability in the responses of the stakeholders with a standard deviation of 0.489898 (see figure 23). Everyone is clear about the importance of the BSN in the Puerto Rican idiosyncrasy. Even with all their history, the BSN fails to recognize their legends that have been grounded in the popular culture of the towns they represented while they were professional players. The BSN should aspire to create a hall of fame and be able to honor the contributions of players, coaches, and promoters of the sport to Puerto Rican culture through basketball. As the legendary coach Flor Meléndez, the coach with the most victories in the league, says "the tool that God gave me to defend his homeland was a basketball."

3.2.4 Diversity and anti-discrimination The commitment to generational, cultural, and gender diversity and the integration of people with disabilities constitutes a lever for creating value for sporting organizations. In the first place, due to their marked social role, leagues, and teams must be agents of change in this area, promoting, among others, trends such as equality and diversity. To promote these values, it is essential that the organizations first apply and embrace them internally. Additionally, a good perception of the workers regarding the inclusion and equality of the league and teams will affect their performance and their commitment to it. In addition, there are benefits of a reputational nature, which in addition to generating commitment among employees, will contribute to creating a socially responsible employer brand image, while supporting the dissemination of these values among the community. Leagues and teams must ensure that they preserve and promote the positive values of sport: effort, camaraderie, sportsmanship, solidarity, and respect. These are the elements that add value to the industry, and they go further: they are a fundamental part of its legacy. Discrimination of any kind, therefore, cannot have a place within the organization, which must set an example by applying the principle of equal treatment and opportunities, without discrimination being allowed in the development of labor relations in the club direct or indirect. Following some modifications to ticket prices, the diversity in the BSN fan base increased substantially. For the low price of $3.00, anyone could go to the stadium and support their favorite team. Even so, there is still a long way to go regarding the workforce. For example, of the current 9 franchise owners are white males from 45-54 years old, there are no blacks or women. Additionally, there are only 2 women working in managerial positions across the nine teams. Also, only 1 woman commenting on television matches.

3.2.5 Accessibility

It is essential to internalize that disability is understood as a matter of respect for human rights; universal accessibility is the necessary precept so that all people can fully exercise their rights. Therefore, the lack of accessibility constitutes a violation of the right to equal opportunities for people with disabilities and there is a significant reputational risk for those teams that do not respect it, directly or indirectly, since they will be incurring discrimination. While, little by little, this approach from human rights is permeating society, governments, and institutions; the breadth of groups that the concept of accessibility encompasses is not yet fully understood and assumed. In general, there is a tendency to associate accessibility with reduced mobility, when contemplating people with any type of disability: hearing or deaf problems, reduced or blind vision, intellectual disabilities, others. In addition, older people are often people with disabilities or have some difficulties in mobility or in other areas such as vision or hearing, and therefore can benefit from the improvements made in accessibility. The same can happen with children, and with more people than we would initially associate with the concept of accessibility, without forgetting the people around them - family, friends - who also attend the events. Ensuring accessibility is a legal and ethical obligation, but it also represents an opportunity to reach more people and has an impact on improving the quality, comfort and experience of all viewers and users. Although the stadiums where BSN matches take place are one of the league's greatest resources, due to their capacity (the average capacity in the 10 BSN stadiums is around 7,500 seats - see figure 17), they are not enabled for this sector of the population. For this reason, it is difficult to make the product accessible to this sector due to the deficiencies of the stadium itself. Beyond improvising and placing these people in random places when they arrive at the games, the BSN should develop a rigorous policy and planning for these types of situations (make sure that the payment of this sector is on par with the place where they would be watching the game, sometimes they pay as the public - $5.00 - and due to logistics, the team is forced to place them on the court - $50.00).

3.2.6 Workers’ Living Conditions

In terms of the BSN, most workers provide their professional services to one of the participating franchises via two forms: verbal agreements and contractual agreements. In the past, verbal agreements were the norm of the day at BSN. Although there has been substantial progress in this area, many verbal agreements remain across the multiple teams. For example, equipment managers of each team and some game-day employees still maintain these kinds of relationships with

54 the teams. These relationships consist of only pay for the worker’s services – nothing more. No medical plan, nor marginal benefits. In terms of players and coaches, everything is different. Due to the nature of each season, they get benefits and amenities that normally don’t get in other professional leagues. Additional to pay established through a contractual agreement – normally for the length of the season, players and coaches also receive from teams’ housing (normally, apartments in front of beautiful beaches), vehicles (so they can travel across the island from game to game), medical services, three meals per day, and much more benefits. Until this day, none of them receive medical plans for their services. From the league's perspective, none of its workers (both service providers and formal employees) receive a health plan or fringe benefits beyond biweekly pay. Without a doubt, something that could be considered in the long term to improve the living conditions of all BSN stakeholders is to formalize a league medical plan, either by projecting the service in its entirety or a discount to anyone who is part (legally) of the league or some of its teams.

3.3 Environmental Pillar

Society is increasingly demanding with organizations in terms of their commitment to the environment. The sporting industry cannot be left behind in responding to these demands, especially because of their great social bond. Sport is a vehicle for transmitting ethical and responsible values, and therefore it must set an example with its behavior towards our environment. Basketball, like any activity, causes considerable impacts on the natural environment. Most of these impacts come from the day-to-day activities of the teams among leagues: the consumption of water and energy in all its facilities; the generation of waste that is accentuated on match days. Special mention deserves the impact associated with transport. The displacements of the teams and professionals of the teams and of the fans to the sporting events, emit a considerable amount of greenhouse gases, which cause climate change. Today, climate change constitutes the most alarming environmental problem at the global level, being the main cause of droughts, floods, desertification, and extreme weather events that ultimately cause migration, displacement, and inequality in communities. The basketball industry must be aware of its role in this global problem, and of its responsibility to take the necessary measures to mitigate it. Although environmental sustainability practices through BSN are non-existent, the league must aspire to achieve good environmental performance, it is essential to have indicators that allow performance to be measured. In this way, you will have a starting point and you can measure evolution, and even set goals. To carry out this follow-up, it is recommended to have professionals

55 who are assigned this role. The indicators allow the improvement actions that are put in place to be directed, efficient and effective.

3.3.1 Energy Emissions and Mobility

This section refers to the management of direct and indirect emissions of greenhouse gas (GHG) emissions, specifically those associated with energy consumption. Energy consumption is the total energy expenditure of the teams, including that attributable to all facilities (stadium, training areas, offices, and shops) and the sporting events themselves. The main challenges for sports entities focus on establishing short, medium, and long-term indicators and objectives that allow performance monitoring in energy management. Initiatives must pursue optimization in the use of energy resources and the use of renewable energies. Create awareness is definitely something the BSN could engage on in order to promote de responsible use of energy.

3.3.2 Waste

In recent years, the problem around plastic waste has generated great social alarm and has focused on the environmental impacts generated by waste. This has provoked numerous responses from institutions and organizations, which try to promote the circular economy as a productive model to follow to minimize this problem. The sports industry generates a high volume of waste, so this issue must be managed in the best possible way following the approach of reducing, reusing, and recycling. To minimize waste, it is necessary to prioritize the acquisition of those products that are strictly necessary, and that generate the least amount of waste possible, or are easily recyclable. Then, the means must be put in place to ensure adequate treatment of the waste generated, through the selective collection of waste and the awareness of professionals and spectators. In addition, it should tend to eliminate waste that is not recyclable Without a doubt, the amount of garbage that is wasted during game days is substantial. As the stakeholders mentioned very well during the one-to-one interviews, they might think that implementing practices related to waste disposal is expensive, but it is not as much as they might think. For example, the BSN could invest in recycling containers (paper and plastic) and initiate its ecological sustainability strategy in this way. Also, strengthen ties with a recycling companies could be established and dispose all waste in optimal ways.

3.3.3 Water

Water is one of the most precious natural resources, on it depend the economic and social prosperity of the world. It is no longer enough to make a responsible consumption, but also soon the reuse of water will have a capital weight. Due to their impact, sporting organizations should become the main actors in strategies for saving and minimizing water consumption. Knowing the main consumptions that a club has and establishing objectives and measures for its reduction should be an important part of its environmental management. In addition, sporting organizations must take on the challenge of reusing water as an opportunity, not only to improve their environmental sustainability, but also to achieve an economic benefit in the medium-long term. Once the teams become the administrators of the coliseums in their entirety, a practice that they could implement in the long term to increase ecological sustainability is to recycle rainwater (especially in a Caribbean island with as much humidity as Puerto Rico) and use it for air conditioning system use.

CONCLUSION

Defining what sustainability means for your business is not an easy task, especially in the sports industry. Although definitions vary from place to place, the most common explanation of sustainability comes from the United Nations’ Brundtland Commission in 1987, where it was defined as meeting the needs of the present without compromising the ability of future generations to meet their own needs. Although sustainability’s definition has been linked to a natural connotation throughout the years, the term is often addressed as a three pillar-concept: environmental, economic, and social. Commonly, people tend to confuse the definition of sustainability with sustainable development. Although they are similar concepts, key differences may be noted. As stated by British environmentalist and writer Sir Jonathon Porritt in his book Capitalism as if the World Matters, sustainability refers to the capacity for continuance into the long-term future. Meanwhile, sustainable development relies on the process or journey by which we move to sustainability (Porritt, 2005). Although definitions vary from one place to another, both rely on improving the lives of everyone while achieving all this together in every part of the world. Although it sounds as a utopian, this is sustainable development and there is a plan for this. All the 193 countries of the United Nations agreed on a joint 15-year plan looking for ways to do business differently so that everyone gains and can aspire to become the better version of themselves. With a plan that consists in 17 Sustainable Development Goals (SDGs), the United Nations provided a guide so we can achieve this and live in a world where the planet, economy and people could coexist and benefit from each other. Throughout the years, the professional basketball league of Puerto Rico – Baloncesto Superior Nacional (BSN) – has been recognized as one of the top competitions of the Americas continent. Its beginnings date back to as early as 1930 - making the league one of the oldest in the world with 90 continuous years of serving basketball to the Puerto Rican community. BSN’s annual preparation, production and post-tournament activities generate a significant impact in Puerto Rico’s economy (around twelfth million dollars in gross income), the island’s natural environment, and on local communities of the participating franchises. Despite basketball’s popularity among the island of Puerto Rico, where it is considered the island’s primary sport, its professionalization as a business has left much to be desired. Although the league had an explosion in its commercialization during the 2000s, it has been suffering from an economic crisis during the past decade. Every year there are fewer franchises competing in the league, lower budgets for each team, higher owner contribution, lack of different revenue streams, lower TV ratings reported by Nielsen each year, less government contribution for each team, and more debts in the operation of the remaining franchises. Although BSN’s outreach has significantly been reduced in recent years, the league is still considered Puerto

Rico’s preferred league among fans. As with any mega-sporting event worldwide, the BSN also presents risks related to the increased use of limited natural resources, as well as to the health, safety, and well-being of all its stakeholders. Reality is that the direction the league is heading is negatively alarming. To safeguard the well-being of the BSN and all its components in the long-term, a sustainable strategic framework was developed in this research paper divided into three main pillars: governance, people, and the environment. To achieve this, the process consisted of six fundamental steps: The first step consisted of a questionnaire of 30 questions (see Annex 3) that was distributed in person and digitally. In here, several general conclusions could be reached such as the main consumer of the BSN belongs to the age range of 25 to 34 years (24.5%, see figure 7), has a high school (50%, see figure 8), earns less than $ 25,000.00 USD annually (31.7%, see figure 9) and attend 2-5 home games of their favorite team during the season (29.5%), see figure 12). Here some of the best sustainability practices and strategies in the sports industry were analyzed. Among the leagues and entities studied were the sustainability strategy of the FIFA World Cup 2022, the sustainability strategy of the Tokyo Olympics 2021, the sustainability strategy of LaLiga in Spain and the sustainability activities that the two leagues execute annually. most important basketball games worldwide: NBA and EuroLeague. Following the technique of the sustainability strategy of the FIFA World Cup 2022, 30 relevant sustainability topics (out of the 100 that were identified by FIFA) were chosen when executing the BSN season annually. In one-to-one meetings with 30 BSN actors, the 30 topics identified were prioritized according to each one's reality during each BSN season on a scale of 5 to 1, with 5 being the most important, and 1 not important (see annex 2). Once the 30 personal meetings were completed, the total responses were analyzed through a standard deviation analysis to identify the variability in the responses of each of the interviewees. In this way, we could observe (see figure 19) which of these 30 identified topics had more importance and therefore be able to abound in explanation and recommendations on these topics when developing the strategic sustainability model. Based on what was analyzed, a sustainable strategic framework was developed divided into three fundamental pillars (governance, people, and the environment) with 15 objectives and recommendations per pillar to guarantee the well-being of the BSN and all its components in the long-term run. In the future, another area with the possibility of being studied would be the individual finances of each of the teams (Annex 4) which, for the most part, have been directly responsible for the BSN economic crisis.

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ANNEXES ANNEX 1 – Glossary of Terms

1. Sustainability: Meeting the needs of the present without compromising the ability of future generations to meet their own needs (Brundtland report, 1987). Sustainability seeks to understand the relationship between societal growth and environmental deprivation, in a way that allows human societies and economies to grow without compromising the natural resources and ecosystems in which they exist. Sustainability is often addressed as a three pillar-concept: environmental, economic, and social. 2. Business Sustainability: The efficient use of resources to maintain company profitability over time. There are three main strategies for business sustainability: resource optimization in business processes and supply chains, protecting brand value through stakeholder engagement, and selling to a niche market of green consumers ready to buy product and services at a premium price (Mahajan & Bose, 2018). 3. Environment Sustainability: Aims to enhance human prosperity through the protection of natural resources (land, air, water, minerals, etc.). Environmental sustainability focuses on how business can accomplish positive economic outcomes without doing any harm, in the short- or long-term, to the environment (Dunphy, Benveniste, Griffiths, Gollan & Sutton, 2000). 4. Social Sustainability: Focuses on maintaining and improving relationships amongst people while allowing individuals to satisfy their needs. 5. Sustainable development: Process or journey by which we move to sustainability (Porritt, 2005)

ANNEX 2 – Relevant sustainability topics prioritization across BSN stakeholders (instrument to gather data)

ANNEX 3 – BSN’S Market Research Questionnaire

ANNEX 4: BSN’s franchises revenue streams (2019 season)