Posted Jan 19, 2023, 4:22 PMUpdated Jan 19, 2023, 5:02 PM
Never has the NBA generated so much revenue. After two years of losses linked to the health restrictions imposed by Covid-19, the prestigious American basketball league is back in Paris with Olympic financial health. THE NBA generated more than $10 billion in revenue in 2022, a record.
For the second time at the Accor Arena this Thursday will be played an NBA regular season game in France. But beyond the sporting issue between the Detroit Pistons and the Chicago Bulls, the biggest basketball league in the world has come to the capital for representation. A showcase for a cash machine that continues to internationalize. Matches relocated abroad, including a new one scheduled for Paris in 2024, broadcast of matches and “highlights”, the best moments, almost live on social networks… The league’s strategy for developing its influence at abroad has increased in recent decades. Six figures to measure the size of the NBA’s business.
1. Revenue of $10 billion
During the 2021-22 season, the symbolic bar of ten billion dollars in revenue was crossed 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 NFL’s $18.7 billion (American football), but ahead of the MLB (baseball) and its 9 .6 billion. The NHL (ice hockey) comes 4th with 5.7 billion dollars, far ahead of the most recent football market represented by MLS (1.2 billion dollars).
2. An NBA team is worth an average of $2.86 billion
The average value of an NBA franchise is $2.86 billion, an increase of 15% over the previous year, according to the annual ranking compiled by Forbes. In 2001, this figure was approximately 200 million dollars. Booming over the past 20 years, the average value of an NBA franchise has increased 12 times.
The Golden State Warriors, reigning NBA champions, 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 greatest resources of the NBA is based on very juicy TV rights contracts. The current TV rights contract that binds the NBA to its broadcasters since 2016 and until 2025 was negotiated for the sum of 27 billion dollars (nearly 24 billion euros). The TNT, ABC and ESPN channels contribute nearly $2.1 billion in revenue per season to the NBA.
The contract for the coming years which must be renegotiated soon would be around 75 billion dollars and Amazon seems to have decided to play the match against the American television networks. The NBA also exports its show 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 matches in the country.
4. Sponsorship revenue multiplied by 3 since 2010
For many brands, the NBA represents the opportunity to be broadcast on screens around the world. Sponsorship revenues have tripled since 2010, rising from $536 million to $1.6 billion in 2022. According to the expertise firm IEG Research, the arrival of sponsorship on jerseys brings in $1.46 billion euros per year to the NBA and the 30 franchises, an increase of 6% compared to last season. The little comma sewn on the league’s 30 basketball team jerseys brought in nearly $200 million in 2021. Since 2017, the NBA has also allowed sponsors to appear on jerseys and court floors through a of naming. Many brands like Disney, or PayPal allow each franchise to monetize their audience for several million dollars per year. For the Lakers and Warriors, their revenues are close to $15 million per year thanks to their partnerships with Bibigo and Rakuten. In 2021, the Crypto.com platform, for example, spent nearly 700 million dollars 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 payroll authorized for each franchise. In constant inflation in recent years, the “salary cap” is set at 112.4 million dollars for the current season.
NBA franchises have the ability to override it when extending their own players or through “exceptions.” An envelope which allows, and 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 branch called “NBA Equity”. According to Bloomberg, the NBA has nearly 20 companies in its portfolio, with holdings approaching $1 billion. Recent equity investments include French unicorn Sorare, clothing brand New Era, data analytics Sportradar, children’s social network Zigazoo, smart fabrics Nextiles and event management company QuintEvents.
