We just unveiled our latest in a series of stories on the economics of the NBA and how the recession is affecting the basketball business. The topic of this one is the intense debate over revenue sharing. Check it out here, along with what I like to call the Class Warfare Index -- which illustrates the gap between the teams making money and the ones that are not.
Right on cue, sports business expert Darren Rovell of CNBC came out with a blog post in which he called out the majority of NBA teams for missing an important selling opportunity that could've given them a jump on what is expected to be a difficult environment for 2009-10 ticket sales.
A whole offseason and bad economy to think about apparently did little to inspire much creativity on the part of NBA teams. When the upcoming season schedule hit on Tuesday, many teams weren't ready to offer fans enticing ticket packages. Some teams had absolutely nothing to offer beyond season tickets. Most offered few specific deals that would make a fan want to get back into the arena.
Rovell credited the Bucks, Hawks, and Timberwolves -- all mentioned prominently in our piece Thursday about the growing disparity between high- and low-revenue teams -- for offering particularly creative ticket packages as soon as the 2009-10 schedule was released this week. He noted that the Spurs, Trail Blazers, and Warriors -- who all came out favorably in our study of league-wide ticket sales -- also offered some good deals.
Rovell's commentary raises an important question: In a bad economy -- coming off a season in which league-wide ticket revenue declined, and entering a season in which the NBA already has projected that overall revenue could decline between 2.5 and 5 percent -- why not ramp up your efforts to make some early sales? Why not take advantage of your fans' burst of enthusiasm once they see what the schedule looks like for next season? Now is when teams with expectations for a better season -- the Wizards and Pistons, for example -- could have capitalized on their fans' optimism. It's only August, and everybody's still undefeated.
UPDATE: In teams' defense, one plausible explanation for why they're not ramping up their individual ticket campaigns yet is the fact that they're still heavily involved in season-ticket sales, which are prioritized because they're more lucrative and provide a steadier revenue stream. But this subject also raises the larger point about why it will be so difficult for NBA owners to agree on changes to the league's revenue sharing model.
While the NBA is a business as a whole, it is made up of 30 individual and highly competitive businesses. Teams in certain markets have obvious advantages over teams in other markets. But if some teams are better at selling tickets and making money than others, so be it. So say the owners of the teams that know how to get out in front of a bad economy, sell tickets, and make a little extra dough while their competitors are apparently on summer vacation.
Ticket sales are down ... so why not try harder?
Posted on: August 6, 2009 2:49 pm
Edited on: August 7, 2009 2:58 pm