How do NBA teams afford to pay players so much?
- Thread starter Sportspm
- Start date
TV revenue, Game tickets, sponsorships, advertising, clothing/jerseys/hats, etc
But college does all that with about the same size arenas. More games played in nba but it seems it wouldn’t be that much more
- Tickets
- NBA League Pass
- Parking and concessions
- Merchandise sales in the arena
- Pop-up merchandise vendors outside the arena
- Team branded merchandise purchased from any outlet, including video games
- If you subscribe to a cable TV package that includes a regional sports network (RSN) that broadcasts games, part of your monthly payment goes to the RSN, and part of that money is paid to the team for the right to broadcast the games. In fact, if you live out of market, part of your cable bill might be going to a team that you dislike.
- If you subscribe to any platform, cable or streaming, that includes a national NBA broadcast partner, part of your monthly fee goes to that network, and part of that fee goes to the NBA.
- Some sportsbooks pay fees to the NBA for data, the right to use logos and player likenesses, and other services, so a small portion of money gambled on the NBA goes to the NBA.
- Advertising: here the amount of money that goes to the team and the NBA depends on what the advertising is and where it is. Progressive, a publicly traded company, has to file quarterly reports with the SEC that break down expenses. About 8% of their revenue is spent on what they term “policy acquisition costs,” which is, basically, all those annoying commercials with Flo. So if you’re a Progressive policy holder, part of your premiums go toward the purchase of ad space on NBA broadcasts. Coca-Cola spends about 30% of their revenue on “Sales, General and Administrative” costs—this is almost as much as they spend on the actual stuff they sell—and the largest share of this line item goes toward advertising. Pfizer spends about 17% of their revenue on “Selling, informational and administrative” expenses, which, again, are primarily advertisements (you might be surprised to know that this is more money than the company spends on research and development). A portion of the money you spend on all these products and services ends up with the NBA and its teams. Some advertising money goes directly to the NBA, (as is the case with the Taco Bell-branded Skills Challenge), or to teams in the form of arena advertisements and in game promotions. Other advertising money takes an indirect path, where revenue from commercials is used by networks to pay for their broadcast license fees.
- Tax subsidies: Many teams have agreements with cities that provide direct or indirect tax subsidies.
Each franchise is a business owned by a rich man or a conglomerate of rich men. And the rich men make money by people watching. That’s it
With the focus on WNBA money lately they’ll soon be subsidizing that inferior product more as well. The NBA’s life preserver is the only reason that has been sustained.
Using averages it appears game day ticket revenue alone is 72,335,256 and that’s just one avenue of revenue. Broadcasting, merchandising and sponsorships are the other big 3 generators.
College basketball doesn’t have a following across the globe. You’re talking around 2 Billion in sponsorships alone.
The NBA has worldwide viewership. College basketball viewership is mainly a USA thing.
At that level of wealth, they could be ok with losing money. Think tax dodge or status symbol like a country club membership
KY should go get a Distillery or someone from corporate America ( large Bank) to put a patch on the jersey for 5-10 million a season
I just noticed we said the exact same thing in different words...lol
NBA players are paid 50% of league revenue. That revenue comes from tv deals, tickets, merch, etc.
China, geez at least make sense. China funds the NBA. Where does China get the dough... American tax dollars... The NBA doing the biding of China is secure..
In 2022 alone China funded the NBA to the tune of 5 billion...
In 2022 alone China funded the NBA to the tune of 5 billion...
They have more home games than college teams play altogether, the TV money spreads around 28 teams better than 300+, larger audience, in the biggest cities to have more sponsorship. billionaire owners, more merchandise sales, higher tickets are factors.
Media rights money is almost entirely responsible for why the NBA salary cap has exploded so much over the last 20 years.
There’s only 25 college programs that turn a profit. Colleges have to fund all of the sports that lose money.
But the NBA has a global brand with a huge market in China. College basketball is more of a regional thing and just has people excited for a few weeks every March.
That said, the atmosphere of an NBA game is simply awful.
But the NBA has a global brand with a huge market in China. College basketball is more of a regional thing and just has people excited for a few weeks every March.
That said, the atmosphere of an NBA game is simply awful.
Many good points in this thread. It makes more sense now. I see so many empty seats and boring nba games but now I understand more where the money comes from
China, pharma, TV/ad/naming rights, jerseys/licensing.
Organized gambling kickbacks
That's just how they compensate officials. The teams don't revenue share that dough
Bake sales mostly.
