SBJ/April 18-24, 2011/Leagues and Governing Bodies

Drama sells for NBA

League posts gaudy stats as labor issue looms

It began with the frenzy surrounding LeBron James and the onset of the evil empire Miami Heat, continued with midseason drama involving the game’s biggest stars, and ended with the resurgent play of the big market Chicago Bulls and New York Knicks. So compelling was the NBA regular season that it pushed leaguewide revenue to an all-time high of $4.3 billion, delivered a record television audience for its network partners and brought higher than anticipated gate revenue.

But against the backdrop of the league’s dizzying regular season, the NBA also recently reported to the National Basketball Players Association that it lost about $340 million during the 2009-10 season, following a $380 million loss for 2008-09. While the league does not yet know what the specific loss will be from this season, the most recent $340 million loss figure will be a key talking point as the league heads toward a June 30 expiration of its collective-bargaining agreement.

Overall, the league drew 21.3 million fans for the season, the fifth-highest attendance in NBA history, as story lines played out all over the league. There was the high-profile trade of Carmelo Anthony to New York, the emergence of superstar rookie Blake Griffin that made the Los Angeles Clippers relevant, and the challenge of the Kobe Bryant-led Los Angeles Lakers in defending their dominance.

“Top to bottom, the NBA has never been as competitive,” said Gary Stevenson, former NBA executive and sports consultant. “There were so many marquee matchups on any given night. But the big elephant in the room is labor.”

Average attendance this season grew by nearly 1 percent to 17,323 fans per game, in line with preseason estimates, league officials said. Nineteen out of 30 teams saw an average attendance increase, compared with 13 teams last season.

League officials would not disclose specific gate revenue or the rate of increase, but ticket sales typically account for about one-third of total league revenue, meaning that the league’s gate is an estimated $1.4 billion.

Ratings soared across all of the NBA’s network partners (TNT, ABC and ESPN) while about half the league’s 30 teams saw double-digit increases in local cable ratings.

Leaguewide team sponsorship revenue hit record levels, though league executives would not disclose specific figures. The average number of team deals stands at 100.

“We have great momentum and our teams are capitalizing on the great halo over our game right now,” said Chris Granger, executive vice president of team marketing and business operations for the NBA. “Revenue generation hasn’t been the problem; it is the cost of generating revenue that has been the issue.”

For example, Granger said, many teams have added ticket sales and service staff while investing in more sophisticated marketing and digital efforts in an effort to drive revenue.

The Chicago Bulls led the NBA in attendance this season, drawing an average of 21,792 fans per game, while the Indiana Pacers ranked last, averaging 13,538.

The largest percentage gain in attendance came in Miami, where the Heat, led by their offseason free agent acquisitions of James and Chris Bosh, saw their attendance jump 11.6 percent to a capacity 19,779 fans per game at AmericanAirlines Arena. The Detroit Pistons posted the biggest drop in attendance, with an 11.2 percent decline to an average of 16,660 fans per game.

Driving the increase in gate revenue are double-digits hikes in group sales and individual-game ticket sales.

Teams played to 90.4 percent capacity, the seventh consecutive season the league played to at least a 90 percent capacity mark.

“We had a good year on all fronts with very strong renewals, record full-season-ticket sales, and record groups and individual tickets sales,” Granger said.

NBA ratings this season on TNT rose 45 percent to a 1.6 U.S. rating (2,453,000 viewers) over 52 games compared with a 1.1 U.S. rating (1,728,000 viewers) over 53 games last season. By averaging more than 2.4 million viewers per game, Turner recorded its largest viewership for TNT since it began broadcasting the NBA in 1984.

“Even with our high expectations, this is a record-setting year,” said Christina Miller, senior vice president of strategy, marketing and programming for Turner Sports. “From the biggest free agency period in a very long time to a huge tip-off to now, there have been great story lines.”

Those story lines played well on the Web, as traffic on NBA.com grew to a record 5.9 million page views, up 35 percent, according to Turner, which runs NBA.com.

NBA games on ABC generated an average 3.0 U.S. rating (5,110,000 viewers) over 15 games, up 30 percent over a 2.3 rating (3,694,000 viewers) over 15 broadcasts last year.

The NBA on ESPN generated a 1.3 U.S. rating (2,025,000 viewers) over 71 telecasts, up 30 percent compared with a 1.1 U.S. rating (1,571,000 viewers) over 73 games last season.

This was the highest-rated and most-viewed season on both networks since ESPN acquired the NBA rights in the 2002-03 season.

“There have been so many plots and subplots that it is great television,” said Doug White, senior director of programming and acquisitions for ESPN.

On the corporate sales front, the NBA signed new leaguewide deals with American Express and BBVA Group this season. Up for renewal this summer are Gatorade, T-Mobile and Anheuser-Busch.

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