National Basketball Association: Financial Analysis

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Recommended: Historical background of basketball

Not only a popular past time in America and worldwide is the National Basketball Association (NBA) a multi-billion dollar operation and growing. With popularity waning in the MLB due to slow paced games and safety and off the field issues plaguing the NFL, the NBA continues to shine. Contributing to its growth, the NBA has focused on expanding basketball viewership overseas to Europe and China. On the world stage, the NBA and basketball is one of the most popular sports only trailing soccer. With expanding viewership, revenue in the NBA has significantly grown. As a result, in 2013-14 all basketball related income generated by the NBA amounted to $4.5 billion. Basketball related income includes broadcast rights, advertising, merchandising, …show more content…

This includes ticket purchases and concessions, TV deals which deliver the game at home and merchandising rights from jersey and apparel sales. Not included in BRI are proceeds towards expansion teams, fines levied throughout the season, and revenue sharing. Since BRI contributes to calculating the salary cap, revenue sharing must be excluded from BRI because it would present an economic advantage to big market teams. Hypothetically, a high revenue generating team such as the Lakers or Knicks would drive the salary cap up, forcing small market teams to spend exorbitant amounts to retain players. This leads to an unsustainable system and economic disparity amongst franchises. As a result, revenue sharing is not designated as basketball related …show more content…

In the past, Reebok and Adidas were providers for the official uniform of the NBA. Recently, the NBA decided to end its partnership with Adidas and signed an 8 year, $1 billion with Nike. This represents a 245 percent annual increase from its previous deal. Nike who had previously produced replica jerseys will carry official uniforms at the start of the 2017-18 season. The company has always played a large role in basketball shoes and apparel. It is estimated that Nike brands control 90 percent of U.S. basketball shoe sales. Likewise many of the NBA’s biggest stars have lucrative endorsement deals with world’s largest shoe and apparel

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