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USA Today via Reuters

USA Today via Reuters

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  Debate

Debate

With NBA team values skyrocketing, is basketball now America's favorite sport over football and baseball?

How has the NBA managed to have unprecedented growth whereas other American sports leagues struggle? As the NFL faces ongoing safety concerns and MLB’s fanbase declines, the NBA stands out, growing brighter than ever. Let’s be honest, Adam Silver’s league’s appeal seems unstoppable right now, doesn’t it? Innovation has been a cornerstone of the biggest hoops competition. Though some ‘inspiration’ is necessary from European football. Silver’s vision of an in-house tournament is in its second year of fruition.

Globally, basketball ranks just behind soccer in popularity. With its expanding modern-day audience, the NBA has seen impressive revenue growth. According to Forbes’ late October 2023 estimates, the average NBA team’s value now stands at $3.85 billion—about a 35% jump in just one year. Pretty wild, right? The league’s financial power only seems to be going up.

USA Today via Reuters

And who’s one of the main benefactors? Obviously the players. The prize money for the Emirates NBA Cup 2024 has been upped compared to last year. Players on the Cup winning team will get $514,970 each, a rise of almost $15,000 when compared to the inaugural season. Subsequently, players on the losing team of the final will make $205,988 each, an increase of $6,000.

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Players on the losing team in the semifinals will get $102,994 each and players on the losing team in the quarterfinals will earn $51,497 each. In contrast to $100,000 and $50,000 last year.

How is the NBA filling their players’ pockets? Well, it is credited to the tied growth of basketball-related income (BRI). I know, now what even is BRI? Don’t worry, we’ll explain everything.

What is BRI?

According to Investopedia, Basketball Related Income includes everything from TV rights and ads to merchandise and concessions. The NBA’s U.S. broadcast deal with ESPN and Turner Sports alone is set to pull in an average of $2.66 billion each season, through 2024-2025 too. That’s no small sum! It’s clear that the league’s financial machine is firing on all cylinders.

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With NBA team values skyrocketing, is basketball now America's favorite sport over football and baseball?

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Basketball-related income (BRI) encompasses most of the NBA’s earnings, including ticket sales, concessions, broadcast rights, and merchandise like jerseys and other team apparel. Certain revenue sources, however, don’t fall under BRI—such as expansion fees, fines collected throughout the season, and revenue-sharing funds.

Now, here’s why revenue sharing is kept separate: BRI is used to calculate the salary cap. If revenue sharing was included, teams with massive earnings, like the Los Angeles Lakers or New York Knicks, could artificially inflate the cap. This would force smaller-market teams to stretch their budgets just to retain talent, creating a financial imbalance across franchises. So, to keep the playing field fair, revenue sharing is excluded from BRI.

Broadcasting rights deals

Streaming services may be cutting into general TV viewership, but live sports have resisted this shift, keeping networks willing to pay top dollar for broadcast rights.

For the NBA, a nine-year, $24 billion deal with ESPN and Turner Sports—active since 2016—is set to end soon. Through this agreement, the NBA receives $2.66 billion per season, significantly more than the $930 million yearly fee under the previous 2007 contract. In this soon-to-be-lapsing deal, ESPN expanded its rights to cover television, digital content, highlights, audio, data, and international NBA broadcasts. Games are set to air on ESPN and TNT until the end of the 2024-25 season.

But this will change.

After months of back-and-forth, the NBA finalized a massive $76 billion media rights deal with ESPN/ABC, NBCU, and Amazon Prime Video. This 11-year contract, starting in the 2025-26 season, marks a 160% annual increase from the current agreement!

Under the new terms, ESPN and ABC, owned by Disney, will hold the largest package, paying $2.6 billion each season. This includes 80 regular-season games, with ABC airing at least 20, mostly on Saturday nights and Sunday afternoons.

Ticket sales and concessions

Ticket sales may not be the top revenue driver, but they still bring in significant income for NBA teams. The Chicago Bulls, for example, consistently draw large crowds, averaging 20,624 fans per home game in the 2023-24 season.

When it comes to the cost of attending games, the Knicks had the priciest tickets, but that’s no longer the case. The Warriors now top the list for the 2024-25 season, followed by the Lakers. Despite this, the Knicks still rank 3rd for the most expensive tickets.

To get a better idea of what it costs for a family of four to attend a game, we can look at the Fan Cost Index (FCI). This measure includes tickets, concessions, and parking. According to Team Sports Marketing, the FCI for an NBA game in 2023 was $444.12. That’s a hefty sum, isn’t it? And they say it’s not a major driver of revenue.

Licensing Agreements and Sponsorships

In 2017, the NBA and Nike inked a massive eight-year deal worth $1 billion, covering branded basketball shoes and apparel. This agreement marked a huge 245% increase in Nike’s yearly payment compared to the previous deal with Adidas.

Nike now dominates the U.S. basketball shoe market, holding a staggering 90% share. Big names like LeBron James, Kevin Durant, and Giannis Antetokounmpo have signed lucrative endorsement deals with the brand, further cementing Nike’s grip on the market.

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Pretty wild to think about how much influence they have, huh?

During the 2023-2024 season, the NBA set a new record by bringing in $1.5 billion from corporate sponsors.

The NBA’s global reach is expanding, thanks also to the growing number of international players. As the 2024-2025 season tipped off, 125 players from 40 countries were on active rosters, including Giannis Antetokounmpo, the two-time MVP from Greece.

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As this trend continues, the league is looking to capitalize on international markets to boost media coverage and merchandise sales. Who knows, we could even see teams from Europe? Someone tell this to Silver!

The NBA’s popularity has surged in recent years, both in the U.S. and overseas. With a $24 billion TV deal, a $1 billion agreement with Nike, and rising corporate sponsorships, the league is thriving. Average team values are now nearing $4 billion, securing the NBA’s reputation among the most valuable sports leagues in the world.

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