The NBA is a multi-billion dollar business, with business being the key phrase. To the NBA's credit, it has done a phenomenal job marketing the league. From global expansion to strategic business partnerships, today we explore why the NBA has increased so dramatically in value, along with the teams that are managing their payrolls most effectively.
Expanding Global Reach
One of the primary drivers behind the NBA's growth in value is its increasing global appeal. The league has made concerted efforts to expand its presence beyond North America (started by David Stern and then expanded by Adam Silver), actively promoting basketball in international markets. With initiatives like the NBA Global Games and the establishment of NBA Academies worldwide, the league has successfully cultivated a massive global fan base. This international expansion has attracted a diverse audience and opened up lucrative opportunities for revenue generation through broadcasting rights, sponsorship deals, and merchandising.
Rise of Superstars and Dynamic Storylines
The NBA's ability to consistently produce captivating storylines and showcase exceptional talent has played a significant role in its growing value. The league has been blessed with charismatic superstars like Michael Jordan, Magic Johnson, Larry Bird, Kobe Bryant, and LeBron James, whose transcendent skills and captivating narratives have captured the imagination of fans worldwide. These iconic players have helped drive television ratings, ticket sales, and merchandise revenue, elevating the league's overall value. The current NBA tv deal, which expires at the end of the 2024-2025 season, will have earned the NBA approx. $2.7 billion per season! Current negotiations imply that the amount on a future deal could triple!
Embracing Digital Media and Technology
The NBA has embraced digital media and technology to engage fans in new and innovative ways. The league has been at the forefront of leveraging social media platforms, streaming services, and interactive digital experiences to connect with fans across the globe. Through online streaming services like NBA League Pass and robust social media presence, the NBA has expanded its reach beyond traditional broadcast mediums, allowing fans to consume content anytime, anywhere. This strategic embrace of digital platforms has not only enhanced fan engagement but also provided new avenues for revenue generation.
Strategic Partnerships and Business Ventures
The NBA's value has been further bolstered by its strategic partnerships and business ventures. The league has collaborated with global brands, securing lucrative sponsorship deals and endorsements. Additionally, the NBA has ventured into various business sectors, including media, entertainment, and technology. Investments in ventures such as e-sports, content creation, and international partnerships have expanded revenue streams and contributed to the league's overall growth.
NBA Teams & Payroll Productivity
With the rise of analytics around the League, you can bet that I'm not the only one looking at this. In the charts below, you'll see each NBA team, along with the number of players on each team making $10 or million during the 2022-2023 season. In addition, you'll see the total team payroll, regular season wins, and dollar spent per win.
There are some interesting conclusion to draw here.
1. The Rockets finished tied for the western conference's worst record with 22 wins. However, they also had a payroll of only $48 million.
2. The Clippers had the highest payroll in the league at $191 million. Not only did they only win 44 games, but their first round playoff exit to the Suns puts this business on the list of glaring under performers.
3. Teams like the Hornets and Trailblazers are in no man's land. They're not spending enough to be in that tier of teams, but they're also winning too many games to not get top draft picks. Both of these franchises need some direction.
4. The Warriors only had 4 players making more than $10 million this season. However, those 4 were all making north of $25 million! This is a tremendously top heavy roster. If Wiggins and Green aren't performing like stars, they are two of the most overpaid players in the League.
(Shout out to Hoops Hype for the data)
Thoughts, comments, questions? Shoot us a note in the comments section below.
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John Willkom is the author of Amazon best-selling basketball books: Walk-On Warrior and No Fear In The Arena. John is an avid reader, sports fan, and father to two incredible little girls.
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