Published January 19, 2023, 4:22 pmUpdated January 19, 2023, 5:02 pm
The NBA has never generated this much revenue. After two years of losses related to the health restrictions imposed by the Covid-19, the prestigious American basketball league he returned to Paris in Olympic financial health. The NBA generated more than $10 billion in revenue in 2022, a record.
For the second time at the Accor Arena, an NBA regular season game in France will be played this Thursday. But beyond the sporting issue between the Detroit Pistons and Chicago Bulls, the biggest basketball league in the world has come to the capital for representation. A showcase for an ATM that continues to internationalise. Matches moved abroad, including a new one scheduled for Paris in 2024, broadcasting of matches and “highlights”, the best moments, almost live on social networks… The league’s strategy to develop its influence abroad is increased in recent decades. Six figures to measure the size of the NBA business.
1. Revenue of $10B
During the 2021-22 season, the symbolic ten billion dollar bar in revenue was surpassed by the NBA. The NBA holding company has quadrupled its revenue since 2001 ($2.5 billion) and tripled since 2012 ($3.7 billion).
In the American sports entertainment industry, the NBA is now the second-highest grossing league, far behind the $18.7 billion NFL (American football), but ahead of MLB (baseball) and its 9, 6 billion. The NHL (ice hockey) comes in 4th place with $5.7 billion, far ahead of the last soccer market represented by the MLS ($1.2 billion).
2. An NBA team is worth an average of $2.86 billion
The average value of an NBA franchise is $2.86 billion, up 15% from a year earlier, according to Forbes’ annual ranking. In 2001, this figure was about $200 million. Booming over the past 20 years, the average value of an NBA franchise has increased 12-fold.
The defending NBA champion Golden State Warriors are now the league’s most valuable franchise with an estimated $7 billion, dethroning the New York Knicks ($6.1 billion), followed by the Lakers ($5, $9 billion), the Chicago Bulls ($4.1 billion) and the Boston Celtics ($4 billion).
3. $27 billion in TV rights
One of the NBA’s greatest assets is its lucrative TV rights deals. The current TV rights contract that binds the NBA to its broadcasters from 2016 until 2025 has been negotiated for the sum of 27 billion dollars (almost 24 billion euros). Channels TNT, ABC and ESPN contribute nearly $2.1 billion per season to the NBA.
The contract for the next few years that will have to be renegotiated shortly would be around 75 billion dollars and Amazon seems to have decided to play the game against the American television networks. The NBA also exports its entertainment internationally, particularly to China, where it brings together more than 500 million basketball fans. The league has a $1.5 billion-a-year deal through 2024-25 with Tencent to stream its games in the country.
4. Sponsorship revenue multiplied by 3 since 2010
For many brands, the NBA represents an opportunity to be broadcast on screens around the world. Revenue sponsorship have tripled since 2010, going from $536 million to $1.6 billion in 2022. According to the expertise of IEG Research, the arrival of jersey sponsorships brings the NBA and the 30 franchises 1.46 billion euros per year. year, an increase of 6% compared to last season. The small comma stitched on 30 basketball team jerseys in the league brought in nearly $200 million in 2021. As of 2017, the NBA also allows sponsors appear on jerseys and pitches through a naming strategy. Many brands such as Disney or PayPal allow each franchise to monetize their audience by several million dollars a year. For the Lakers and Warriors, their revenues are close to $15 million a year thanks to their partnerships with Bibigo and Rakuten. In 2021 the Crypto.com platform, for example, paid nearly $700 million to offer its logo on the floor of the Staple Center in Los Angeles.
5. A salary cap of over $110 million
In the NBA, the “salary cap” is the authorized payroll for each franchise. In constant inflation in recent years, the salary cap is set at $112.4 million for the current season.
NBA franchises have the option to override this when extending their players or through “exceptions”. An envelope that allows, for example, to afford the services of Stephen Curry (Golden State Warriors) for 48 million dollars this season, the most expensive player in the league.
6. A $1 billion private equity fund
At the end of 2022, the league formalized the launch of its investment arm named “NBA Equity”. According to Bloomberg, the NBA has nearly 20 companies in its portfolio, with holdings approaching $1 billion. Recent stock investments include the French unicorn Sorare clothing brand New Era, data analytics Sportradar, children’s social network Zigazoo, smart fabrics Nextiles, and event management company QuintEvents.