NBA regular season opens. Back to normal? Not quite.
NBA regular season finally arrives with five games on Christmas Day. But TV and technology are changing league revenues and how America will see the NBA regular season.
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But there are drawbacks. For one, a reliance on TV revenues disproportionately benefits large market teams, who have a broader viewer base and can sign lucrative local TV contracts (in addition to the shared revenues from the ABC and TNT deals). This past February, for instance, the Los Angeles Lakers signed a 20-year, $3 billion deal with Time Warner Cable, allowing two new L.A. area channels to broadcast Lakers games. Teams playing in smaller markets, like Charlotte, Cleveland, and Sacramento, don’t have the local viewership to support such a contract, which means they miss out on that extra revenue.Skip to next paragraph
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What’s more, given equal salaries, big name players will prefer to play in a large market over a smaller one. The bigger stage offers more in terms of endorsement money, increased fame, and, often, better teammates, Mr. Wilbur says. “So the small markets lose out even more on ticket sales, and they’re already not buying in on TV revenue. It makes it harder and harder to compete.”
This “small market” issue was a driving force behind the league’s lockout. Several owners of teams in smaller cities wanted a larger proportion of revenues to be distributed among all teams, at the expense of player salaries. That’s exactly what they got in the lockout’s resolution, an agreement that cuts $300 million annually from players’ salaries and puts it back into the league, with the hopes that even the poorest teams will be able to partake in revenues.
Finally, the NBA isn’t using television – its future chief revenue stream – to its best advantage. In recent years, high-definition technology has become so widespread that 60 percent of American households have access to it, via TV, the Internet, or both, Wilbur says. Yet the NBA doesn’t have all of its games available in HD. Compare that to the National Football League, by far the most-watched pro sports league in the country, which has all of its games available in HD in one form or another.
“The NFL is letting the consumer choose how they want to consume the games,” he says. “It might sound like a small thing, but it’s a huge difference when you’ve got HD football competing with standard definition basketball.”
“I don’t think someone would stop following the NBA because of it, but they miss out on the potential to gain new fans, especially kids,” Wilbur adds. “That’s when your allegiances form. The NBA is missing out on that opportunity.”
However, one part of the NBA viewer experience is much friendlier than the NFL’s: The NBA has a much more relaxed hold on its game footage, allowing fans to create their own highlight reels and share them online. The NFL’s highlights are much more tightly controlled. “The NBA is much more friendly in that regard, and they’re not giving up much revenue because of it,” Wilbur says.