Blog Entry

NBA is popular, but not seeing profits

Posted on: February 28, 2012 6:48 pm
 
Posted by Royce Young

It's almost becoming a weekly NBA press release. "[Insert game] was the NBA's highest rated in 15 years." The league's popularity is reaching incredible highs. Behind young starpower, an exciting product and an intriguing rumor mill, the NBA is soaring.

And yet, the league isn't making money. Deputy commission Adam Silver explained in Orlando.

"The league will not make money this year," Silver says. And next year? "Maybe."

Don't forget, and I'm sure you haven't, there was a lockout this season. Over exactly this stuff. As a result, the NBA reduced Basketball Related Income from 57 percent to 51.1 percent for the players. The system was tweaked and changed to benefit owners. By all accounts, there was really no excuse for the league to not make money. Especially with the rising popularity of the game.

So what's going on? Henry Abbott of TrueHoop explains:
The explanation from the league is that the cuts in player costs roughly match the losses from last year. But this year the league says there were an additional $200 million in losses related to the lockout, for instance due to lost ticket revenue and corporate sponsorships that didn't happen.

More importantly, popularity only equals big changes in revenue over years. The most obvious way that happens is with more lucrative national TV deals, but the old deals are still in place for two more years. High TV ratings have not meant new TV revenues for the league. Corporate sponsorships similarly take time to develop.

And according to the league, the popularity is nice, but not yet a cure for the league's financial distress.
You can't take a shortsighted view of the new collecive bargaining agreement. It's a 10-year deal and as Silver said after one negotiation in the fall, he believes the league will eventually be proven right with this deal. It's not about the present. It's about the future.

But there certainly is a difference in the game being healthy and popular and it being profitable. With all the concessions the owners got in the last negotiation though, if they aren't making money when the league is at all-time highs in popularity, then there's really nothing left to do than look in the mirror.
Category: NBA
Comments

Since: Sep 5, 2011
Posted on: February 29, 2012 5:23 pm
 

NBA is popular, but not seeing profits

With all the prices going through the roof because of the greed of the players/owners I decided a few years ago to just buy me a home entertainment center and spend my money on myself and family. I enjoy watching the games at home with my friends and family and enjoying my TV and stereo system. The prices are stupid to go to a game, your average family cant afford to take thier family to a game without taking a second mortagage out on thier homes. Until major league sports figures this out and lower the prices on tickets/parking/refreshments there will be more and more fans that will stay at home and invest into thier home entertainment center instead of wasting thier money on the greedy ba$tards.



Since: Jan 25, 2007
Posted on: February 29, 2012 2:26 pm
 

NBA is popular, but not seeing profits

It's more popular than it has been for the last 15 years, they know this because of the ratings, just because you and your friends don't watch the games doesn't mean the national population are not watching more bastketball.



Since: Jan 25, 2007
Posted on: February 29, 2012 2:23 pm
 

NBA is popular, but not seeing profits

He just explained to you how.



Since: Sep 19, 2011
Posted on: February 29, 2012 12:57 pm
 

NBA is popular, but not seeing profits

Popularity is based off of TV ratings.  TV ratings are skewed because people would rather stay at home and watch a game then go to an arena and pay double what they usually would pay for parking, ticket prices, concessions, etc... due to the lockout.  A ticket to the Washington Wizards-LA Clippers game last year was roughly $50-$60 for a pretty decent seat in the lower tier.  That same seat at the beginning of a lockout shortened season(prior to the CP3 trade might I add) was $115.  The lockout money has to be made up somewhere which is driving fans to stay home.  True the game is doing fairly well in popularity but it became evidently clear during the lockout that it was cheaper to stay at home and watch the game and see the same action, with replays and without the over the top antics of a trampoline dunking clown team.  To add to that, the compressed schedule (where your getting 8 games in 10 nights) definitely doesnt lead to the best product being on the floor.  Are you going to pay extremely high ticket prices to see a subpar performance when you can just pay your cable bill and still see the same game?

  



Since: Dec 4, 2010
Posted on: February 29, 2012 12:10 pm
 

NBA is popular, but not seeing profits

I do not watch the NBA at all.  My problem w/ the NBA is that they 'market' a few players and even fewer teams.  Only those few teams they market seem to be on nationally televised games.  The few players come down to the superstars in the BIG markets.  I wish someone would EXPLAIN how they can say they are providing 'exciting product' . And 'rumor mill'? Pleasse.  It's superstars are more popular than ever it seems.  The NBA is playoff driven. Most of my NBA fans say they never watch until the Conference championship series.



Since: Feb 6, 2011
Posted on: February 28, 2012 11:24 pm
 

NBA is popular, but not seeing profits

Can you say LIAR! LIAR! LIAR!
Fuzzy Accounting and a lack of Investigative Journalism!
The Good Ol' Boys are at it again!!!



Since: Sep 11, 2011
Posted on: February 28, 2012 9:02 pm
 

NBA is popular, but not seeing profits

More popular than Ever ? i used to watch games all the time and haven't watched a single game this year ! Alot of my friends haven't been watching either , I wonder how they figure more popular than ever. Haha



Since: Sep 4, 2007
Posted on: February 28, 2012 8:12 pm
 

NBA is popular, but not seeing profits

Posturing for the next round of talks no doubt.  I really wonder how popularity can be at an all time high but the teams are not profiting?  Sounds like poor executive skills at work to me.  Or maybe just a load of .....



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