NBA and Its Many Successful Business Models

NBA and Its Many Successful Business Models

Every year, millions of people tune in to watch NBA games live.

The National Basketball Association (NBA for short) is a popular sports league. This gives it plenty of freedom and options when it comes to monetization, ranging from ticket sales, merchandising, and others.

Today, we will explore its key revenue sources and take a look at the figures.

Television revenue

Nowadays, less people tune in to watch the games from traditional TV devices since DVRs and streaming services have taken up their slice of the pie. Nevertheless, the numbers are still quite decent. In the 2016-17 season, the NBA stroke a $2.6bn deal with Turner Sports and ESPN. Compared to the deal they made in 2007 that totaled at $930m, that’s almost a 3x increase in value. The higher price comes with its fair share of benefits, including international NBA rights.

Overall, television is likely to stay an attractive way for viewers to tune in and watch the games – after all, it’s always freely available and it doesn’t cost a dime. 

Ticket sales

For some, watching the action unfold right in front of their eyes live is irreplaceable by any form of streaming or broadcasting. Hence, ticket sales will always remain a substantial money-maker for the NBA. Taking a look at the attendance rates, it becomes clear that the most popular teams like the Philadelphia 76ers can get roughly 20,000 viewers to attend their live home games.

On average, an NBA team generates $1.76m from ticket sales. Keep in mind that the more die-hard fans a sports team has, the more they can charge per ticket. Also, with ticket sales and live attendance, everyone makes money; the fast food sellers, parking lot operators, motels, etc.

Sports betting

Sports betting has always been the spirit of the game. Live Betting at Sportsbet.io is an example of a service where the odds constantly change depending on the state of the game, so experienced bettors always remain on the lookout to get it in when it counts. All of this contributes to the overall tension and excitement of the game. But what about the numbers?

The NBA has partnerships with several betting operators and it collects revenue through advertising, product fees, and sponsorships. It’s estimated that the NBA nets $400m-$600m from gaming-related revenue alone. Throw sponsorship deals and TV advertising into the mix, and that’s easily a couple of hundred million extra on top of that.

Merchandise deals

A substantial portion of NBA’s revenue comes from merchandise deals, estimated to reach more than $1bn per year. Note that with the season of 2017-18, ads started to get printed on NBA teams’ jerseys, which positively contributed to the overall revenues. On average, these ads brought in $9.3m on an annual basis. Among the big-name advertisers are Disney, Rakuten, and General Electric.

Sponsorships are another major contributing part of NBA’s merchandise deals. In 2015, the organization signed a deal with Nike that’s estimated to be worth $1bn.

International revenue

The NBA is expanding on a multi-national level, all of which generates new sources of revenue. China is a major contributing force, generating the organization about $500m per year. Tencent, a major technology player in China, is the NBA’s exclusive digital partner.

Increasing its international appeal garners the interest of several high-profile investors, with Alibaba being just one example. In recent years, the organization has taken a somewhat looser stance on who is allowed to advertise through ads printed on team jerseys, allowing several international advertisers to explore this promotional avenue.

Conclusion

Despite the fact that global catastrophes such as COVID-19 put a dent in its overall revenue streams, the NBA is alive and kicking and things are only picking up from here.

Disclaimer: This article contains sponsored marketing content. It is intended for promotional purposes and should not be considered as an endorsement or recommendation by our website. Readers are encouraged to conduct their own research and exercise their own judgment before making any decisions based on the information provided in this article.

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