Jerseys, bobble head dolls, limited edition shoes are just the icing to a very big financial cake. As much as we love the game and enjoy good basketball for basketball’s sake, money does make the ball go round.
The high cost of ads during sporting events is no secret. The NFL “charge[s] $4.2 million per 30-second commercial during their championship game,’ according to the cheatsheet.com. The NBA while not on par with the Super Bowl definitely brings in the bucks.
The NBA makes it revenue from a variety of sources, and it’s not relegated to a playoff only time structure. With the introduction of max player salary caps as a result of the lockout according to SBNation, individual teams, owners, and of course the league is making more than ever.
One thing that does limited the NBA is that Oracle Arena, the home of the warriors, can’t hold quite as many people as the University of Phoenix, (the location of the last SuperBowl) which roughly holds sixty-three to seventy-two thousand people, but basketball arenas have their fair share of seats.
CBS Sports has already remarked “NBA Finals ticket prices [are] sky high.” Because of the match-up between the MVP and the King, the NBA stands to make a huge profit and not just on beer and popcorn. Ticketcity currently has game one tickets available for thirteen thousand plus dollars.
Because of the stakes of each game being higher, game 7 tickets can be predictable more expensive. According to Time for the 2013 NBA Finals, courtside seats where priced at thirty thousand bucks per ticket. And this year, you can expect that to be even higher.
Endorsements and Team Deals
According to ESPN, the Los Angeles Lakers were the second worst team in the Western Conference. But because of their market, the Lakers are actually the richest and most financially successful team this year according to Forbes.
Stats like this epitomize why market and location is just as important as team success, the New York Knicks are the number two financial successful team on the aforementioned list by Forbes. The Knicks bring in a cool 2.5 billion, that’s not bad for being one of the worst teams in the league.
The NBA Collective Bargaining Agreement determines how much money the league makes off of teams, and dictates salary caps for players, coaches, and even all star game payments. So when teams sign lucrative deals with cable companies which typically happen after a precedent of success, it means big bucks for the NBA.
These deals offer the most money, and last through regular season thru playoff games. Additionally un-trackable revenue, big players like Lebron, Durant, and Curry bring in the form of jersey sales, increased tickets, and catalyst for long-term TV deals spells big dividends for the NBA.
Bleacher Report roughly reports that a million dollars is made for the NBA on Lebron Jersey sales, bobble heads, and iPhone cases.
Commercials and the Finals
Advertisements are paid commercials, announcements etc… that can be attached to programs that are broadcasted in any medium.
Last year, the NBA Finals made about 875 million dollars in ad revenue according to cheatsheet. That number is expected to rise. Especially, since the Spurs won 4-1 and the league missed out on potentially two games in ad revenue.
An NBA game can last anywhere from 3 hours and up. Statistics from deadspin.com also show that NBA playoff games are longer by about twenty minutes. Longer time on the court, means more breaks, TV timeouts, and more ads. And of course more ads mean more money.
In the end, the bump in sales and the ads that accompany throughout the playoffs are enough to keep the league quite happy. On Ballnroll.com, “37 per cent is how much the Miami Heat team’s value increased after they won their first championship in 2012, according to Forbes.”
Whether the Warriors or the Cavs take home on the championship, the real winner is the NBA.