SBJ/April 29-May 5, 2013/Leagues and Governing Bodies

Pricing helps NBA set record for gate revenue

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NBA franchises posted record revenue at the turnstiles this year, as teams reported more per-game gate revenue for the 2012-13 season than in any prior campaign, according to league officials.

The NBA declined to disclose the specific amounts, but it did report closing out its regular season this year with a 6 percent increase in average per-game gate revenue, surpassing the record that came from the NBA’s lockout-condensed season last year.

On the flip side of the league’s season-ending report, television viewership for the NBA declined across ABC, TNT and ESPN this year compared with both the shortened 2011-12 season and the most recent prior full season, 2010-11.

Backed by an 88 percent season-ticket renewal rate, total gate revenue climbed well past the $1 billion mark this year, league officials said. More than 20 of the NBA’s 30 teams saw an increase in average per-game gate revenue, with more than $100 million in revenue coming from the sale of new season tickets.

“Full [season tickets] drive the gate, and we are better at pricing up on the highest-demand games to capture revenue, and we are better at pricing down on the lesser-demand games to drive additional sales,” said Chris Granger, executive vice president of team marketing and business operations for the NBA.

Nearly all of the NBA’s 30 teams have instituted variable and dynamic pricing strategies.

“We are still in the infancy of pricing, and that is why we are seeing such an improvement in revenue,” said Adam Kanner, former NBA executive and current chief executive officer of ticket reseller ScoreBig.com, which counts NBA teams as clients. “It is great that the NBA is waking up to the opportunity that better pricing provides.”

Average regular-season attendance for the NBA this year was 17,348 per game, up 0.4 percent from last year. The Chicago Bulls led the league with an average of 21,877; the Sacramento Kings ranked last, at 13,750.

Among other metrics, total team sponsorship revenue climbed by 4 percent compared with the full 2010-11 season and by 20 percent compared with last year’s 66-game schedule.

As for TV, NBA Commissioner David Stern said that last year’s lockout-condensed season affected this year’s NBA TV audience.

“The ratings are down a bit because they were super-juiced by the lockout in a way, but most important is that the story lines are great,” Stern said.

On TNT, viewership was down 20 percent this season after two seasons of record audience numbers (see chart). But the NBA on TNT this season generated the second-highest viewership of any full season, ranking behind only the 2010-11 season.

“There were some anomalies that have impacted the schedule, and one was that we had a Christmas Day game last year, and that was a big spike for us,” said Christina Miller, general manager of NBA Digital and senior vice president of strategy, marketing and programming for Turner Sports. Miller also pointed to Hurricane Sandy as a factor, as it temporarily knocked out television viewership across the Northeast just as the NBA season was starting, in October.

The NBA on ABC saw viewership drop 14 percent over last season and 8 percent over the 2010-11 season. On ESPN, viewership dropped 5 percent compared with last season and 11 percent from the 2010-11 season.

Doug White, senior director of programming and acquisitions for ESPN said “it is hard for us to be disappointed” given a long-term view of the numbers. “The league has been on a nice rise over the past several years,” he said, “and they will continue in that direction.”

On NBA TV, viewership was flat compared with last season but up 33 percent from the full 2010-11 season. The network since November 2010 has added 8 million homes to its distribution footprint and is now available in 61 million homes.

The NBA’s digital properties also saw gains this season, including new highs of 6.6 billion page views and 3.9 billion video streams on NBA.com.

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