• Stephen Pelkofer

The NBA Has Deep Pockets


The NBA has been in a rapid growth mode the last few years. As was advertised this summer, player contracts exploded to heights we've never seen before. Many factors such as TV and sponsorship deals, international impact, star power and higher team values are leading to substantial revenues and increased league popularity.

The new TV deal the NBA signed is $24 billion over 9 years, which is $2.66 billion dollars annually. That's almost triple the previous contract. Because of the league's collective bargaining agreement, the players receive 51% of basketball related revenue. This is the main reason we're seeing guys like Timothy Mozgov get paid $16 million per year... yikes. The league also is switching to Nike starting in the 2017-18 season. The deal is worth over $1 billion dollars, double their previous deal with Adidas. Not to mention, the start of jersey sponsorships is coming up, the league's present and future earnings are in good shape.

Forbes rates teams in terms of value every year, and this year’s NBA values were records across the board. The average NBA team is now worth $1.25 billion dollars. Five teams are above $2 billion, led by the New York Knicks at $3 billion. Both the Knicks and the Lakers are now two of the top ten most valuable franchises in the world. With the global popularity rapidly increasing, the NBA can pass the MLB and catch up to the NFL in terms of being the most valuable American sports league.

There are now over 100 international players in the NBA and the sport is becoming increasingly popular overseas. The China and European markets are huge opportunities for the NBA to cash in on financially. More people want to watch and play basketball than ever before. The NBA has changed playing times on weekends to increase international viewership in recent years. Before retiring, David Stern even flirted with the possibility of an international division in the near future. The NBA Finals are still the second biggest draw in the US behind the Super Bowl, but internationally, basketball has a chance to compete with soccer in becoming the world’s most popular sport.

Perhaps the biggest factor for the NBA’s rise is the star power. LeBron James is the biggest sports superstar in the country, and it’s probably not even close. Steph Curry might be number two, but if not, him and Kevin Durant are certainly in the top five. Guys are just way more recognizable in the NBA than any other league. Michael Jordan, LeBron James and Kevin Durant have the three highest endorsement contracts in sports history. In total, the NBA players make up seven of the fifteen highest ever. The star power in the NBA has been and will probably always be strongest in the NBA.

The league is in the best spot it has ever been in. Adam Silver has done an incredible job in his time as commissioner so far. Increased revenues, team values, international popularity and a group of star studded players will continue to propel the NBA into taking over the sports world.

#StephenPelkofer #NBA #NBABusiness

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