Taking a Corporate Approach to NJB Expansion

Current Process

The Northern California Region of National Junior Basketball (NJB) has reached a point where expansion has come to a halt. The last chapter created was Sequoia, when the Redwood chapter was split in half, five years ago. And even that expansion was as more the result of political needs for section balance than for adding any significant territory.  There are many factors which have led up to this condition, but the one which stands out the most is the current model for expansion.

Up until this day NJB has created chapters when organic demand welled up in an area and a group of parents organized to break off and serve an under served and often adjacent territory of an existing chapter. This could be called a passive approach. The result has been a hodgepodge of chapters which range widely in geographical size, constituent demographics, number of teams fielded, and organizational structure and internal processes. New chapters have not been uniformly successful, as many of these chapters are able to consistently field the full range of Divisional and All-Net teams, and several struggle with finding sufficient gym time and revenue to keep operations going year on year. And yet within that haphazard approach have emerged impressively organized full service chapters with solid balance sheets and even auxiliary programs.

This type of development conforms to what is commonly referred to in the business world as the hero stage. Results are neither repeatable nor clearly predictable. NJB is at the point that for expansion to continue and succeed from this point going forward, it is necessary to adopt a corporate strategy based on an ideal model.

The basic product is sound and desirable for many, a league which has seen NBA players like Jeremy Lin and recently lottery pick Aaron Gordon participate in their pre high school careers.  Almost seven thousand youth play in the Northern California section, in both the recreational Divisional leagues and the competitive All-Net leagues. In some neighborhoods more than 10% of all youth in the age range participate in the league. So there is great confidence that the product can reach into neighborhoods not now served and be well received.

However the model for chapter creation lacks structure and definition. To achieve that it is necessary to analyze the conditions required for NJB to be successful, and thus model an ideal franchise chapter. This means looking at the demographics where NJB succeeds and where it struggles to determine the factors necessary for success.

Definition of Success

The Foothill chapter, which I have been a board member of for the last ten years since its inception, is often held as the model for success. The chapter is the largest, boast fielding 63 teams (42 boys, 21 girls), including All-Net teams for every grade and gender, a strong balance sheet, a large deep board, a formal financial assistance program (model for most other chapters), and many supporting extras, such as a High School program, coach mentoring, and significant donations to local schools for facility upgrades.  While the chapter is a success by any measure, it is probably a bit larger than ideal, creating some impaction, especially for the competitive All-Net program. But size has advantages, including deeper discounts for volume purchase of uniforms, and the accumulation of money to handle any temporary cash flow issues. As a study case the chapter contains many high participation zip code zones, but also contains an equal number of very low participation zip code zones. This makes Foothill an ideal chapter to base a the conceptual ideal expansion chapter model on.

There are several defining points of success which one should look for in creating a new chapter which I enumerate here:
1. Territory which is likely to produce annually a consistent 350 to 450 players
a. This should include at least 25% girls
b. Size allows economies of scale, leverage in purchase (e.g., t-shirts and uniforms at bulk rates)
2. Sufficient gym space in the territory to accommodate the players who sign up
3. Territory which includes sufficient high educated parents, many with executive positions
a. Provide Board members, including CPAs and other skilled workers
b. Provide donation base to build up the treasury

The objective here, as with any franchise, is to create a standalone entity that can manage itself and support itself in terms of resources and money. The aim is also to have a chapter that supports within a few years all level of All-Net and have a viable girls program. One additional goal I would add would be to provide some disadvantaged zones access to the program for those who want to take advantage of it.

One element I do not include in my model, which was integral to the original NJB model for chapter creation, is the support of a local high school coach. We have found that having the support of a high school coach, while helpful for clinics and if they are inclined, mentoring parent coaches, they are usually not necessary for either gym procurement – usually handled by district administrators – and they are very much disinterested in taking on administrative roles. Parent run boards are both more stable and more capable of adapting.

Identifying Territory

Having established the criteria for measuring a successful chapter, the process shifts to identifying territory which will most likely produce an ideal franchise model chapter. To do this we need to analyze the membership in NJB and identify the characteristics of communities which are already covered by NJB.

In the Foothill chapter there are nine zip codes, which fall into four distinct levels of support. The highest support comes from the 94024 zip code covering Los Altos mostly, where some 240 players reside. The participation rate is roughly 10% of all 3rd to 8th grade children (in 2014 some 240 of roughly 2,400 resident children). In addition there are three zip codes, one each in Los Altos (94022), Mountain View (94040), and Sunnyvale (94087) which produce about 110 players each and have a participation rate of 6-8% of the eligible children. Beyond that we have three zip codes that produce just under 20 players each, and two more that average fewer than 3 players a year.

Los Altos 94024 age distribution curve 

The 94024 zip code of Los Altos has all the tell tale signs you would expect of a high participation youth sports neighborhood. This is immediately apparent when you look at the age distribution curve below. Immediately the characteristic two hump pattern of the archetypical traditional suburban bedroom community stands out.  The low number of 19 to 34 year olds shows that families here are typically in their second home, having moved up, in the early prime of their earnings, with a houseful of school age children. The fall off in residents past 55-60 years of age also shows that relatively few houses are occupied by retirees.

Several other factors stand out that explain the high participation rates and underscore the affluence of the community. Education is foremost, with 76.9 of all adults over 25 having at college degree, and further 44.2% holding a graduate or professional degree. Nearly 70% of the adults are currently married, less than 1% separated, and only 5.5% divorced. The medium household income stood at $166,742 in 2012 nearly triple the state average of $57,287. Only 32 of 7,835 households received food stamps. A whopping 91% of the households are owner occupied, accounting for virtually every detached house. All these factors describe a bedroom community where affluent educated professionals flock to raise school age children. Not surprisingly with all the high achieving parents that the schools consistently rate in the top 3% of the state. It is the ideal community for high participation and volunteer parent involvement for all youth activities.

Sunnyvale (Lakewood) 94089 age distribution curve

On the other end of the spectrum is the 94089 zip codes in north Sunnyvale (aka "Lakewood" neighborhood), which besides including a couple significant industrial zones, is what cane be best described as a starter neighborhood for younger adults. This is seen in  age curve which basically looks like an upside down image image of the curve above for Los Altos. This shows a large number of preschool children under age five and then a deep trough  for school age children into the mid-twenties. The population is dominated by the 25 to 35 age range. This starter neighborhood is reflected also in the surprisingly high 63.67% owner occupied households. But many of these are condominiums, not at all ideal for raising children, but good for building equity to later buy a house in a more appropriate neighborhood. The lower income, just $80,625 per household, is also upside down, with renters making more ($87,200) than home owners ($79,346). Those who remain in the neighborhood after the children reach school age are clearly much farther down the economic scale, less than half the income of Los Altos, and 60% less than  than their Sunnyvale neighbors to the south. This


Mapping the Terrain

When it comes to expansion analytics can play a key role, which can be seen in the South and East Bay maps below, where data is presented visually. Here is a map of Santa Clara, San Mateo, Alameda and much of Contra Costa counties. Blue indicates areas that have or should have high levels of NJB participation, while red indicates areas with very low, or even near zero participation can be expected. The  size of the dots indicates the number of school age children in grades 3-8.

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The data can be used also to predict the number of players a zip code is likely to produce. For a first pass at this I used a formula which includes the percentage of homes owned, the parental level of education, the household income of those owned homes, plus a constant value which reflects that as not all kids play sports, all to create a multiplier to predict the number of players. Since I only had the Foothill chapter data to work with there is likely a significant error that on account of factors I have not measured. But the first pass was not bad, as for the 94024 zip code it predicts 236 players, and in reality we had 242. Similarly the estimate predicts 140 players in the 94087 and we actually had 107. I believe there is a cultural element which I am not capturing, in particular the lower involvement in sports by Asian American children, especially first and second generation. That could account for some of the variance, notably the high number predicted for Cupertino (312 versus an anecdotal 120 to 150 sign ups my friends in the West San Jose Chapter inform me). I can only correct that with more sample data to play with the formulas to be more precise. Below is a map of the actual

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There are some areas for expansion which pop out. The first is centered on Burlingame and Hillsborough (94010) in San Mateo County, just beyond the current limits of NJB. But the richest untapped area is in the East Bay along Highways 680 with the bedroom communities from Pleasanton to Alamo, and along highway 24 with the Oakland Hills, Orinda, Lafayette, and Moraga area. Even my rough predicting calculates at least four chapters and well over one thousand new players can be expected; effectively a new section. This is intuitively obvious when you consider the strong EBAL High School league, almost on WCAL level, occupies that very territory and there are strong youth leagues for CYA soccer and Little League Baseball. Clearly that is the area to drill down more and look for expansion.

In my next report I will drill down these areas and also perform a similar analysis on the Sacramento area, especially the suburban areas north and west of the capital where over one million people reside in mostly bedroom communities.

A note about my NJB involvement:

I been involved with NJB as a volunteer coach since 2003, and a Foothill NJB Board member since 2004, serving variously as Vice President and Gym Coordinator, Chapter Director, and most recently as Database Coordinator. I have seen and helped direct the chapter from its founding by Roger and Sally Lapierre through its maturation under the capable leadership of Martin Silver, which has been passed down and continued to this day. It has been an excellent opportunity that has allowed me to learn and evolve as a coach, organizer, and volunteer.