An NBA Finals featuring two cities outside the top 20 in market size will be a tough sell for ESPN and ABC.
But, according to multiple team and network executives in a new story at The Athletic, the change is unlikely to significantly impact the league’s bottom line. NBA business reporter Mike Vorkunov interviewed people around the sport who explained that “the drop in revenue it will experience in having two of its smallest-market teams on its biggest stage is likely smaller than perceived.”
Because the league already inked a new 11-year broadcast rights package, it doesn’t really have to worry about ratings for the Finals for a while. Of course, the number of people watching can tell us a lot about the overall health and popularity of the sport. Just know it won’t change the financials for the NBA all that much.
“There’s really no direct impact between ratings and financial success, certainly in the near term,” a former league exec told The Athletic. “If you have bad ratings for the next decade, then that limits your TV rights. But I don’t think anyone in the NBA is worried about that right now because the revenues for TV are guaranteed.”
ESPN, Amazon, and NBCUniversal will pay the league nearly $7 billion combined annually under the new package.
Some revenue streams will decrease as a result of the small-market Finals. The Athletic reports that the New York Knicks can make as much as $10 million in gate revenue for deep-round postseason games. Yet the most-expensive ticket in Oklahoma City for the conference finals cost less than half of the least-expensive ticket at Madison Square Garden. The league and its teams get a portion of ticket sales through revenue sharing.
Besides the teams being from smaller cities, the Thunder are also heavy favorites. Betting markets indicate that the series should last just five games. That is also a problem for the league across all revenue streams. A shorter series means fewer tickets sold, fewer pieces of content, less time for fans to buy merchandise, and less time for sponsors to buy space.
Still, this is a conversation largely just because the Knicks were alive until the conference finals. Denver beat Miami in five games two years ago, which was hardly a lucrative result for the league and its broadcast partners.
“The NBA is not on the hook for anything,” a longtime TV exec told The Athletic. “This is the network’s problem. Does everyone want a Knicks-Lakers final? Sure.”
Instead, according to The Athletic, the league could even reap benefits from this matchup. Even if fewer people watch this year, Shai Gilgeous-Alexander and Tyrese Haliburton will be at the center of the NBA conversation for the first time. The league could walk away with two more household names if the two play well.
Reports of the death of the NBA’s balance sheet were greatly exaggerated.
About Brendon Kleen
Brendon is a Media Commentary staff writer at Awful Announcing. He has also covered basketball and sports business at Front Office Sports, SB Nation, Uproxx and more.