The NBA's long-term growth prospects

InstaFace

The Ultimate One
SoSH Member
Sep 27, 2016
21,766
Pittsburgh, PA
Throwaway line from the gamethread is thread-worthy on its own:
Adam Silver is the best commissioner in sports right now. The NBA may end up overtaking the NFL in a few years.
Their shot at that is largely thanks to David Stern seeding the game globally decades ago, while the NFL still has yet to really commit to that. Stern gets crap for a few things, but he largely had the golden touch for 30 years, including who he anointed as his successor.

Mark Cuban, to no surprise, is the most outspoken on the subject. He has expounded on NBA-vs-NFL many times before, on many different subjects: the NFL's greed and expansion to thursdays, the long-term prospects with respect to concussions and safety, the decline in youth participation, and the marketability of the NBA's stars. He makes good points, though obviously from an extremely self-interested point of view. Fortune did an analysis of this, but it's now paywalled.

First, the stats:

- The NFL made $16.9B in 2019, of which ~$9.1B was TV revenue. Their major TV rights deals all end in 2022, with a 50%+ increase anticipated. The league has stated they want to get to $25B in annual revenue.
- MLB made $10.7B in 2019, of which only $2.1B was from TV (including all the RSNs). Their national TV deals are up after 2021 and expected to bring substantial hikes.
- NBA made $8.0B in 2019, of which $2.6B was from TV - and last year was the first time it was closer in top line ($8.0) to MLB than it was to the NHL ($5.1B). Its revenue is still growing at a faster rate than MLB.

But what of it, Port Cellar Dwellers? Could that happen in 10-20 years?


In my view, for the NBA to really accelerate its ascent, a few things need to happen:

1) Firstly, they need to consider expanding, not just 1-2 teams but aggressively, to leverage the sport's advantages. The cost to establish a new NBA team is pretty low relative to other major sports, with fewer players to retain, many more arena options (until you build your own), and a league office that isn't a disaster and has the capacity to help you with various startup things. The talent pool is clearly sufficient to sustain the product, which just can't be said for NFL QBs or MLB relief pitching. More importantly, with the way the salary cap works, smaller-market teams have more of a shot than they do in MLB, so the minimum efficient scale is smaller. Here are the biggest TV markets (by Nielsen DMA rank) that the NBA is not yet in:

#12 Tampa - St Pete (perhaps Orlando claims territorial rights?)
#23 St Louis (recently abandoned by the NFL, soon to be added-to by MLS)
#24 Pittsburgh, #26 Baltimore, #27 Raleigh-Durham, #28 Nashville, #29 San Diego
...not to mention Vancouver and its 2.8M metro-area population.

There's a few that have ZERO Big 4 sports-league presence:
- #33 Hartford
- #36 West Palm Beach
- #40 Austin (getting MLS in a year or two)
- To that, add that #27 Raleigh-Durham and #34 Columbus OH have only the NHL at present

(they are, however, in some smaller ones: #35 Milwaukee, #43 Oklahoma City, #50 New Orleans, and #51 Memphis - and the latter three of those are by way of relocations)

2) Continue helping the game grow globally, remain a collection of global all-stars, and thereby maintain the NBA's preeminence in the minds of sports fans around the world. Do this by expanding preseason scrimmages against foreign teams, maybe including some world teams in the in-season tournament, maybe a summer Club World Cup in an Olympics/FIBA off-year, where the NBA teams can't send any of their starters (or maybe just one, for marketing). They're doing a lot right by having players give clinics and fund courts around the world, and of course scouting for talent. There's always more room to give a boost to a decently-run foreign league by lending them some legitimacy (Japan comes to mind). This is partly an investment in future license-revenue growth, but also a hedge against being able to seize a greater share of the viewership pie domestically, which might be close to tapped-out as far as demographics go.

3) It'd really help if basketball was just as good a viewing experience with stadium crowds of 30,000 as opposed to the current 18-20k capacities that nearly all NBA teams have. Yes, you don't want to over-build for your market, and you can always raise ticket prices if you start to sell out, but revenue maximization improves when you can offer more tiered prices to a larger market. The USA team played Australia in a pre-world-cup tune-up in what was basically a football stadium, capacity 55,000, and it was way too NFL-like: you couldn't really follow the subtle movements, it lacked the intimacy that makes an in-person NBA game so vivid an experience. I'm willing to bet you can do 30k stadiums in the next wave of stadium construction and still maintain that intimacy.

4) On the flip side, China is a huge risk factor: The league generates at least $500M / yr from China, perhaps as much as double that. And they have, as we here all well know, largely sold their souls to the CCP as far as refraining from commenting on social issues there. But then again, the NBA is the #1 sports league in China, ahead of even the Premier League, so to a certain extent they may have leverage they have yet to exercise, both financially and socially. Perhaps there's room for Silver to be less of a hypocrite on the subject, or perhaps not, but it's something of a skeleton in the league's closet.

...and probably 5) some continued stumbling by the NFL (particularly safety / concussions) and MLB (pace-of-play).

Basketball, as a sport, has an advantage the other 3 big leagues don't (and which it shares with soccer): Just about anybody can find a recreational game, just about anywhere. You can go down to a park or playground and find a pickup game of either, kids and adults both. Whereas you have to be a part of organized, pricey rec teams to play baseball past childhood, and likewise hockey; other than flag football, nobody plays full-contact gridiron football as a casual thing. That's helped basketball become the second most widely-played sport worldwide, which means Pro Basketball writ large will probably continue growing strongly even while the NFL stagnates due to its US-centricity and declining individual participation. But the question is, how can the NBA continue to get an outsized share of that growth, to the point where their popularity (and the TV contracts to show it) zoom past other leagues?
 

The Social Chair

Member
SoSH Member
Feb 17, 2010
6,082
The NBA is my favorite sport, but I think Adam Silver has a better chance of becoming NFL commissioner than the NBA has of overtaking the NFL in the next 25 years.

The NBA is nowhere close to the NFL in the metrics you mentioned (revenue, TV ratings, TV contracts). The NBA ratings are coming down from the peak 2012 - 2018 era while the NFL ratings continue to grow (and they are stocked with young QB talent). There is some concern that America isn't taking to the new 3 point heavy style of play.

I do think the NBA will catch MLB eventually. The NBA is more popular nationally and with the 18 - 49 demo.

Behind a paywall but a good read if you have The Athletic.

View: https://mobile.twitter.com/SherwoodStrauss/status/1204060395880665088
 
Last edited:

Kliq

Member
SoSH Member
Mar 31, 2013
22,673
A big question is what does popularity mean? The NFL blows the NBA away and will presumably continue to do so for a long period of time in the main revenue driver, which is TV viewership.

A big part of the NBA's rise (unfortunately, imo) is that so many fans don't actually watch the games, they follow along on social media and talk/listen to discussion about the league, but they don't watch the games which is the main revenue driver of pro sports. The NBA has a lot of peripheral stuff that drives some form of fan engagement (sneakers, off-court drama, 2K, fashion, close alliance with popular music, etc.) but will that eventually translate to interest in watching NBA games? Perhaps that doesn't matter, the league can be the most popular and not necessarily the most financially powerful.
 

Spelunker

Member
SoSH Member
Jul 17, 2005
11,863
Throwaway line from the gamethread is thread-worthy on its own:

Their shot at that is largely thanks to David Stern seeding the game globally decades ago, while the NFL still has yet to really commit to that. Stern gets crap for a few things, but he largely had the golden touch for 30 years, including who he anointed as his successor.

Mark Cuban, to no surprise, is the most outspoken on the subject. He has expounded on NBA-vs-NFL many times before, on many different subjects: the NFL's greed and expansion to thursdays, the long-term prospects with respect to concussions and safety, the decline in youth participation, and the marketability of the NBA's stars. He makes good points, though obviously from an extremely self-interested point of view. Fortune did an analysis of this, but it's now paywalled.

First, the stats:

- The NFL made $16.9B in 2019, of which ~$9.1B was TV revenue. Their major TV rights deals all end in 2022, with a 50%+ increase anticipated. The league has stated they want to get to $25B in annual revenue.
- MLB made $10.7B in 2019, of which only $2.1B was from TV (including all the RSNs). Their national TV deals are up after 2021 and expected to bring substantial hikes.
- NBA made $8.0B in 2019, of which $2.6B was from TV - and last year was the first time it was closer in top line ($8.0) to MLB than it was to the NHL ($5.1B). Its revenue is still growing at a faster rate than MLB.

But what of it, Port Cellar Dwellers? Could that happen in 10-20 years?


In my view, for the NBA to really accelerate its ascent, a few things need to happen:

1) Firstly, they need to consider expanding, not just 1-2 teams but aggressively, to leverage the sport's advantages. The cost to establish a new NBA team is pretty low relative to other major sports, with fewer players to retain, many more arena options (until you build your own), and a league office that isn't a disaster and has the capacity to help you with various startup things. The talent pool is clearly sufficient to sustain the product, which just can't be said for NFL QBs or MLB relief pitching. More importantly, with the way the salary cap works, smaller-market teams have more of a shot than they do in MLB, so the minimum efficient scale is smaller. Here are the biggest TV markets (by Nielsen DMA rank) that the NBA is not yet in:

#12 Tampa - St Pete (perhaps Orlando claims territorial rights?)
#23 St Louis (recently abandoned by the NFL, soon to be added-to by MLS)
#24 Pittsburgh, #26 Baltimore, #27 Raleigh-Durham, #28 Nashville, #29 San Diego
...not to mention Vancouver and its 2.8M metro-area population.

There's a few that have ZERO Big 4 sports-league presence:
- #33 Hartford
- #36 West Palm Beach
- #40 Austin (getting MLS in a year or two)
- To that, add that #27 Raleigh-Durham and #34 Columbus OH have only the NHL at present

(they are, however, in some smaller ones: #35 Milwaukee, #43 Oklahoma City, #50 New Orleans, and #51 Memphis - and the latter three of those are by way of relocations)

2) Continue helping the game grow globally, remain a collection of global all-stars, and thereby maintain the NBA's preeminence in the minds of sports fans around the world. Do this by expanding preseason scrimmages against foreign teams, maybe including some world teams in the in-season tournament, maybe a summer Club World Cup in an Olympics/FIBA off-year, where the NBA teams can't send any of their starters (or maybe just one, for marketing). They're doing a lot right by having players give clinics and fund courts around the world, and of course scouting for talent. There's always more room to give a boost to a decently-run foreign league by lending them some legitimacy (Japan comes to mind). This is partly an investment in future license-revenue growth, but also a hedge against being able to seize a greater share of the viewership pie domestically, which might be close to tapped-out as far as demographics go.

3) It'd really help if basketball was just as good a viewing experience with stadium crowds of 30,000 as opposed to the current 18-20k capacities that nearly all NBA teams have. Yes, you don't want to over-build for your market, and you can always raise ticket prices if you start to sell out, but revenue maximization improves when you can offer more tiered prices to a larger market. The USA team played Australia in a pre-world-cup tune-up in what was basically a football stadium, capacity 55,000, and it was way too NFL-like: you couldn't really follow the subtle movements, it lacked the intimacy that makes an in-person NBA game so vivid an experience. I'm willing to bet you can do 30k stadiums in the next wave of stadium construction and still maintain that intimacy.

4) On the flip side, China is a huge risk factor: The league generates at least $500M / yr from China, perhaps as much as double that. And they have, as we here all well know, largely sold their souls to the CCP as far as refraining from commenting on social issues there. But then again, the NBA is the #1 sports league in China, ahead of even the Premier League, so to a certain extent they may have leverage they have yet to exercise, both financially and socially. Perhaps there's room for Silver to be less of a hypocrite on the subject, or perhaps not, but it's something of a skeleton in the league's closet.

...and probably 5) some continued stumbling by the NFL (particularly safety / concussions) and MLB (pace-of-play).

Basketball, as a sport, has an advantage the other 3 big leagues don't (and which it shares with soccer): Just about anybody can find a recreational game, just about anywhere. You can go down to a park or playground and find a pickup game of either, kids and adults both. Whereas you have to be a part of organized, pricey rec teams to play baseball past childhood, and likewise hockey; other than flag football, nobody plays full-contact gridiron football as a casual thing. That's helped basketball become the second most widely-played sport worldwide, which means Pro Basketball writ large will probably continue growing strongly even while the NFL stagnates due to its US-centricity and declining individual participation. But the question is, how can the NBA continue to get an outsized share of that growth, to the point where their popularity (and the TV contracts to show it) zoom past other leagues?
A small nit in your spoiler, but I'm sad that you left out Seattle.
 
Last edited:

NoXInNixon

Member
SoSH Member
Mar 24, 2008
5,299
If the NBA catches the NFL, it won't because of the growth of the NBA, but because of the decline of the NFL.
 

Devizier

Member
SoSH Member
Jul 3, 2000
19,470
Somewhere
The NBA is my favorite sport, but I think Adam Silver has a better chance of becoming NFL commissioner than the NBA has of overtaking the NFL in the next 25 years.
25 years is a long time.

I think the safe bet is that the NFL continues to be the biggest deal in the US. One thing that it can draw from is that college football has been consistently popular for like 120 years.

But as a global league, the NFL is probably not going to make the leap. The opportunity was there a generation ago, but honestly our national brand fucking sucks and there just aren't enough people worldwide who are going to clamor for a distinctly American sport. The NBA already has its foot in the door all over the place, and they will continue to be very popular internationally much like the Premier league. However, most international basketball will probably grow under existing international structures (euroleague, CBA, etc.) Basketball already outstrips US-style football by a large amount worldwide and that gap will only grow.
 

InstaFace

The Ultimate One
SoSH Member
Sep 27, 2016
21,766
Pittsburgh, PA
A big question is what does popularity mean? The NFL blows the NBA away and will presumably continue to do so for a long period of time in the main revenue driver, which is TV viewership.

A big part of the NBA's rise (unfortunately, imo) is that so many fans don't actually watch the games, they follow along on social media and talk/listen to discussion about the league, but they don't watch the games which is the main revenue driver of pro sports. The NBA has a lot of peripheral stuff that drives some form of fan engagement (sneakers, off-court drama, 2K, fashion, close alliance with popular music, etc.) but will that eventually translate to interest in watching NBA games? Perhaps that doesn't matter, the league can be the most popular and not necessarily the most financially powerful.
In my mind, the easiest metric for popularity is simply revenue. Number of eyeballs times the value of those eyeballs.

As for the value of those eyeballs: A big part of what sets the NFL apart is that their telecasts reach people who aren't otherwise sports fans. The infrequent, holiday-esque nature of an NFL game on fall weekends captures people who watch with their friends or at a bar in a social atmosphere that they'd otherwise not bother with, or have better things to do. Whereas NBA or MLB fans are likely going to watch NFL too. So advertising with the NFL gets you incremental ad reach, over and above whatever any other sports property could do for you - beyond just the ever-increasing importance of live sports as a reason to advertise on TV at all in a DVR era.

With other metrics, you start to run into material differences between the sports' business models that aren't apples-to-apples. Nobody's catching MLB's total game attendance; nobody's touching the NFL's per-game attendance. The NBA has set itself apart through its social media engagement, and the level of personal celebrity it can confer on its top stars (who aren't 1 of 9 in a lineup or anonymized behind huge helmets). But then we're comparing differences, rather than comparing things that are, well, comparable.

From what I can tell, the rate of growth of the NBA's revenue exceeds that of the NFL and has for a few years now, but only because the NFL has 9-year TV contracts that run out in 2 years. 2 years from now we'll see a huge jump for them. On the other hand, what edge the NFL has in domestic TV, the NBA can make up in no small part due to their ability to command international broadcast revenue - the only problem is, the games generally won't be shown live except in South America, so you lose the main marketing edge that sports telecasts bring. I don't know how that nets out, maybe @Dehere has some useful knowledge.