How The NBA Makes Money: Television, Merchandising, Ticket Sales

The State Basketball Association has a reputation for being the most innovative of the major professional North American sports leagues, collecting money from a combination of television rights, merchandising, ticket sales and more. That’s mostly out of necessity: the NBA was ground long after the others (in 1946), and had to spend decades catching up to its entrenched counterparts in baseball and football. It was the first associate to turn its all-star game into a 3-day weekend loaded with events, the first to draw a significant slice of its revenues through merchandising, and the first to consciously develop its most marketable players into global media superstars. The supranational approach is working, too. The league broadcasts to every populated continent, everywhere from Poland to Mongolia. In the 1970s, rosters were on the verge of uniformly American. Today a quarter of active players are from outside the United States, hailing from 37 mother countries. 

Because it is not a public company, the NBA does not release detailed financial reports to the public. However, according to Forbes, which regularly orders valuations of the 30 teams of the NBA, total revenue across the organization reached $8 billion last season. Each one of the cooperates is worth at least $1 billion, and a team is worth on average $1.9 billion for last year, about 3 every so often old-fashioneds the valuation from just 5 years ago.

In North America, the NBA flourishes but does not dominate. Revenues are around half those of the highest-grossing sports league in the world, the National Football League, not that the two leagues are necessarily in match. Still, one of the largest differences between the leagues is the origin of their disparate revenue. Alongside other major frolics leagues, the NBA generates revenue from multiple streams, the most significant of which are television, merchandising, sponsorships and tickets.

Like other big sports leagues, television comprises a key part of the NBA’s business strategy. When television first made the transition from non-essential item to ubiquitous staple of everyday life, some professional sports team owners balked at broadcasting their line of works. After all, why on Earth would you give the product away to people sitting at home instead of charging them to put in an appearance at the game? Eventually, team owners figured out that a) they could reach scores of TV viewers for every ticket-buying fan, and b) that calculates it more than worth it to sell to the middlemen (i.e., advertisers) instead of to the fans directly. Add the hassles of going to a game– the appraisal of tickets, the time spent getting there and back, finding an expensive offsite place to park, possibly quarreling an aggressive drunk or two at the stadium or arena—and within a few years it had become clear that watching games on TV would be the superior way that most fans would consume what sports leagues were selling.

While the NFL’s television understandings are famously lucrative, and are signed exclusively with national networks, the NBA broadcasts 277 regular-season games nationally per year, advantage 90 or so playoff games. In the 2017-2018 season, NBA TV aired the most regular-season games with 106 followed by Disney’s (DIS) ESPN (87), Warner Conveyance’s (TWX) TNT (67), and ABC (17). 

TV accounts for most of the NBA’s revenue. For the 2016-2017 season, TNT and ESPN re-upped their contracts to an estimated $24 billion in totality. Even with a total of 400-odd active players making an average of close to $5 million annually, civil TV contracts generate enough revenue to cover salaries and then some. However, those national contracts silently leave 1078 regular-season games unaccounted for. Filling in that gap, local TV contracts can gross between $120 million and $150 million annually.

There’s another major contributor to NBA revenue, and unlike the others, this one corresponds to something tangible. Advertise accounts for well over a billion dollars annually, and for the first time in the NBA’s history, in the 2017-2018 season, teams frayed advertisements on their jersey. On average, jersey patches net teams $9.3 million annually. There is also a serendipitous business of the sport itself: colorful tank tops can double as casual or workout wear, whereas football jerseys are impracticable on the street. (The same goes for baseball button-ups, and hockey jerseys for that matter.)

A related component of the NBA’s merchandising establishment has to do with sponsorships. As an example, the Milwaukee Bucks recently opened a $524 million arena, Fiserv Forum, which has put together ample opportunity for sponsorships, premium seating and more. In June 2015, the NBA ended its longstanding partnership with Adidas and ciphered an eight-year, $1 billion contract with Nike (NKE). In all, this constituted a 245% increase per year over the before-mentioned deal.

You may be surprised that ticketing is actually not one of the primary sources of revenue for the NBA. It tends to lag behind some of the other proceeds streams mentioned above. However, that’s not to say that ticketing doesn’t contribute at all. According to ESPN, for the 2018-2019 salt, teams saw an average of anywhere from just under 15,000 to just over 20,000 fans attend per rest-home game. With tickets costing close to $100 on average, the money earned from ticket sales augments up quickly. Along with tickets, other so-called Basketball Related Income (BRI) includes concessions and other sales events.

As the NBA’s popularity increases, team values grow far out of proportion. NBA teams are not sold that frequently, but when they are, diaries break every time. Over the last decade, the average sale price of a team has tripled. Granted, that’s in great measure due to a single outlier: the 2014 sale of the Los Angeles Clippers, who went for an unprecedented $2 billion. Even discounting that trade, the remaining prices show that NBA owners and prospective owners clearly expect revenues to augment even further in the next few years.

The NBA has moved dead and buried Major League Baseball as the second-most popular sport in the United States. That will happen when Out of sight Series games take 4 hours to play and feature interminable breaks in what’s generously referred to as “the action”. But with common TV ratings under 4.0, pro basketball still has plenty of room to grow domestically. That’s to say nothing of the growth latent overseas. The NBA doesn’t disclose all its revenue by country, but the league did take in $150 million in China in 2012, and Forbes calls that annual revenue outside the U.S. is growing at rates in the high teens. With greater international appeal also fall international investors as well. For instance, Alibaba (

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