The National Basketball Association (NBA) is one of the major professional sports leagues in the world when it comes to how it makes its money. It was reported that each of the 30 NBA teams are worth at least $1 billion and according to a Forbes report New York Knicks were one of the highest valued teams, the total revenue across the entire NBA was as much as $8 billion just a couple of seasons ago.
The main revenue streams for the NBA derive through the 2014 sale of TV rights for the next nine years with a deal done with ABC/ESPN and TNT that generates an annual revenue of $2.66 billion and $24 billion overall. Speaking shortly after the agreement was signed, ESPN President John Skipper said: “We believe at the end of the deal it will feel inexpensive”. Merchandising and ticket sales also play pivotal roles in propelling the league to being one of the top performing professional sports league in the world.
Such is the appeal of the NBA that many fans hail from around the globe with players coming from well over 30 countries as of last year, with notable names such as Rik Smits of the Netherlands (1988-2000) from the Indiana Pacers, Toni Kukoc from Croatia (1993-2006) who played a major role in delivering Michael Jordan’s second three-peat for the Chicago Bulls.
One component that is highly valuable to the NBA is the $1 billion contract which commenced with Nike in June 2015 and is due to end 2023. Merchandise plays a major role for the league from jerseys to the numerous sponsorships that van be found in arenas across North America to the sneakers that are worn by the players themselves such as Michael Jorden who wore the 1985 Peter Moore design of The Air Jordan 1.
This sneaker was banned when it was first released as was told in a recent study released by Betway Insider. This is hard to believe, but apparently the black and red colour scheme had not met the NBA’s regulations, which stated that players’ shoes must be at least 51 per cent white. It is said the Michael Jordan faced a fine of $5,000 every time he wore the sneakers, this is rumoured to have been paid by Nike.
The Air Jordan brand is now estimated to be worth well over $10 billion, such is the power of exposure of brands through the NBA that a more recent contract which was signed in 2013 between the Warriors’ Steph Curry and Under Armour nets the players $20 million, annually, in a deal that is expected to run until 2024.
However, this deal was close to being quashed following UA’s founder, Kevin Plank’s, apparent support of President Donald Trump in a tweet released in February 2017 as well as Curry’s annoyance with that sales of his signature Curry 3 shoe being weak in the summer of 2018.
Speaking with The Bay Area News Group at the height of the tensions, Curry said: “If I can say the leadership is not in line with my core values, then there is no amount of money, there is no platform I wouldn’t jump off if it wasn’t in line with who I am.
“So that’s a decision I will make every single day when I wake up. If something is not in line with what I’m about, then, yeah, I definitely need to take a stance in that respect.”
Both storms were averted as Curry was said to be promised to have a brand built around his name, a move reminiscent of what Nike did by creating the Air Jordan brand around the professional success of MJ on and off the court. That is why some can declare that the NBA is worth a lot both for money and exposure of brands.