SBJ/20090420/This Week's News

Basketball ticket revenue remains flat despite deep discounting by most clubs

The NBA cushioned the impact of a crumbling economy during its 2008-09 regular season by increasing attendance and keeping its gate revenue at last year’s record-setting level.

Average attendance rose almost 1 percent and the flat gate revenue comes even after tickets were deeply discounted by most of the NBA’s 30 teams in an effort to fill seats. While the league refuses to disclose its gate revenue, one source familiar with NBA finances said that last year’s record gate ranged between $800 million and $1 billion, with overall league revenue in the neighborhood of $3.5 billion.

While attendance held steady, the NBA’s television ratings were flat on Turner and ESPN, while ratings on ABC increased.

“We think our fans are responding to our game, our players, our style of play, in a very positive way,” said NBA Commissioner David Stern during his playoff conference call on April 13. “Despite a challenging economy, our attendance, regular season, in the 2008-2009 season will rank third all time. What we’re doing is we’re working closely with our teams and they’re working closely with each other to make sure that best practices take hold with respect to renewals of tickets, club seats, suites and sponsors.”

Through April 13, the NBA’s average attendance was 17,507, up from 17,368 from the same period last year, according to figures compiled by SportsBusiness Journal.

The NBA At The Gate
Biggest gains (through April 13)
New Orleans Hornets: 20.3%
Indiana Pacers: 17.5%
Philadelphia 76ers: 7.0%
Biggest drops
Sacramento Kings: 10.2%
Washington Wizards: 7.8%
Miami Heat: 6.4%
Source: SBJ research

For the fifth consecutive season, the NBA filled its arenas to 90 percent capacity.

The NBA protected its gate by having its teams sell the bulk of its season tickets — many at higher price points than the 2007-08 season — before the deepening recession.

In addition, league officials said that a late flurry of ticket sales provided enough momentum to keep gate revenue even with last year. A yearlong emphasis on group sales brought a 10 percent increase to the highest group sales level in league history.

“Given all the [economic] pressure, we are pleasantly surprised by both the attendance and the [gate] revenue,” said Chris Granger, NBA senior vice president of team marketing and business operations, who refused to disclose specific gate revenue figures. “The increase isn’t just from residual demand. We had a very strong close to the season. We learned early on in the season what [promotions] worked and we didn’t make any mistakes in the second half.”

Despite Detroit’s devastated economy, the Pistons were poised to lead the NBA in average attendance by drawing 21,877 fans a game through April 13.

Kevin Durant and the Thunder drew well
in their first season in Oklahoma City.

The Memphis Grizzlies seemed poised to rank last in NBA attendance with an average of 12,679 a game. The New Orleans Hornets saw their gate increase by 20 percent this season, the highest increase in the NBA, while the Sacramento Kings had the biggest drop in attendance with a 10 percent decline.

The NBA’s gate was also helped by the Oklahoma City Thunder’s inaugural season. The team drew 18,704 a game compared with the 13,355 fans a game the Sonics drew in their final season in Seattle.

Overall team sponsorship revenue was expected to increase a few percentage points, but as of press time, the league did not have its final total for the year.

On TV, the NBA on TNT through April 12 generated a 1.3 cable rating over 51 games of a 53 game schedule, the same rating as last season over 52 games. But total viewership increased 15 percent to 1.715 million viewers compared with 1.496 million viewers for the same period last year. The number of households grew 5 percent to 1.297 million compared with 1.230 million last season.

“Our households are up for a couple of reasons,” said Turner Sports President David Levy. “You’ve got strong brands like the Celtics and the Lakers winning, and you’ve also got rising stars like Chris Paul and Dwight Howard, along with stars that have been there, so there is a buzz about the NBA right now. From an advertising perspective, the NBA is not immune to the economy, but we sold a lot of inventory up front before the challenging times hit in January and February.”

Through April 5, ESPN’s NBA ratings were flat, with a 1.3 cable rating over 69 games, the same rating as last season compared with 66 games last year. But similar to Turner, the number of viewers grew by 15 percent to 1.686 million so far this year, compared with 1.467 million for the same period last year. The number of households increased 8 percent to 1.3 million, compared to 1.2 million last season.

The NBA on ABC through April 5 generated a 9 percent rating increase with a 2.4 broadcast rating over 16 games, compared with a 2.2 rating over 17 games through the same date last season. Total viewership increased 18 percent to 3.812 million from 3.225 million for the same period last year. The number of households rose by 12 percent to 2.77 million compared with 2.48 million households last season.

Ratings information was provided by the networks.

“We have had good matchups across the board,” said Doug White, senior director for programming and acquisitions for ESPN. “We are on track to have one of our highest-rated seasons, or at least one of the most-viewed seasons.”

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