The Business of Basketball

Overview

In 2001, Kagan's Business of Basketball valued the average NBA team at close to $235 million. ¹ By 2013 that number had risen to $509 million according to Forbes. ² Part of the sports financial growth can be tied to its increased popularity among the public. Attendance for men's professional basketball has grown steadily in the past decade, from 17 million in 1993 to over 20 million in 2004.³ However, attendance for the 2011/2012 season was down due to the lockout that occurred in 2011 which created a shortened season (66 games instead of the normal 82) though it will likely rise. NBA owners received an estimated $1 billion at the gate in 2001. ⁴ The lockout severely strained revenue figures but the 2012 season looked much better with and a total gate figure forecast to be over $1 billion - $100 million of that revenue would be generated from new full-season-ticket sales which is close to the 2010/2011 season. ⁵

A similar rise in attendance has occurred at the college level, where attendance figures for men's games has grown. grew from 28 million in 1993 to over 30 million in 2004. ⁶ By 2011 the number for those who had watched the game or had attended at least one game was 179,023,000. ⁷ The attention to games has gone beyond just attending a game in person or watching it on television. Many fans follow games on Twitter and Facebook, giving them additional benefit of connecting to other fans around the world.

Issue 3/4: Summer 2005
Updated: May 2013

The Sports Industry

Table of Contents

Introduction
General Guides and E-Resources
Baseball
Basketball
Football
Golf
Soccer
Tennis

Bill Russell, wearing Boston Celtics uniform, dribbling basketball, 1958 from the
New York World-Telegram & Sun Collection.
(Library of Congress)
Reproduction number: LC-USZ62-111097

Revenue and expenses at the professional level are tied to television contracts, player salaries, attendance figures, and licensing fees and arena revenues. The salary cap in effect under the 1999 collective bargaining agreement has provided owners some predictability with expenses. And revenue from local and national TV contracts had risen to nearly $1 billion in 2001. ⁸ In 2007 the NBA signed a new 8 year contract with ESPN/ABC and TNT go though the 2015-16 season where the NBA will receive about $930 million a year for all its broadcast rights. ⁹ Moreover, the National Sporting Goods Association has estimated that total consumer expenditures for basketball equipment grew from $235 million in 1993 to $ 312.3 million in 2004 though the recession made its presence known because that number dropped to $242 in 2011. ¹⁰

The 1992 Men's Olympic Basketball team - otherwise known as the Dream Team brought big basketball to the world in a big way, increasing the interest in the sport globally. Here in the U.S. there have been two major changes in recently history that have increased the interest in basketball. The introduction of a women's professional basketball league and even more recently an official minor league NBA league.

The Women’s National Basketball Association (WNBA) was founded on April 24, 1996 as a professional league for women players. The league began with eight teams: the Charlotte Sting, Cleveland Rockers, Houston Comets and New York Liberty in the Eastern Conference; and the Los Angeles Sparks, Phoenix Mercury, Sacramento Monarchs and Utah Starzz in the Western Conference. Currently there are 12 teams - the Eastern Conference includes the Washington Mystics, Indiana Fever, Connecticut Sun, Chicago Sky, Atlanta Dream, and the New York Liberty while the Western conference includes the Los Angeles Sparks, Phoenix Mercury, Minnesota Lynx, San Antonio Silver Stars (was the Utah Starz), Seattle Storm, and the Tulsa Shock.

The Development League, known as the D-League is the official minor league of the NBA. It began in 2001 with 8 teams and 2013 has 16 teams. In 2005 the players Showcase has been a way for NBA teams to look at the best of the D-League players. The league does have a draft much like the bigger NBA draft to recruit new players into the league, with the possibility of moving on to the NBA.

The list of resources below provide access to the rich and varied literature on the business of basketball. These titles, though, are only illustrative of the popular and scholarly literature that has built up over the past decades around the industry.

1 Kagan : The Business of Basketball (Carmel, CA: Paul Kagan Associates. 2001), 6, 382.

2 "Billion-Dollar Knicks and Lakers Top List Of NBA's Most Valuable Teams." Forbes.com, January 23, 2013. (Accessed 22 March 2013).

3 "Basketball - NBA Attendance," Sports Business Research Network database. (Viewed 9 June 2005).

4 Kagan : The Business of Basketball (2001), 11.

5 "NBA season-ticket sales heat up the box office." SportsBusiness Daily, October 22, 2012. (Accessed 22 March 2013).

6 "Basketball (Men's) - Attendance (College - NCAA)," Sports Business Research Network database. (Viewed 9 June 2005).

7 "Sports Fan/Social Media Report 2012 Basketball: College." Sports Business Research Network database. (Viewed 22 March 2013).

8 "Executive Summary," Kagan : The Business of Basketball (2001), 9-22.

9 "NBA extends TV deals with ESPN/ABC, TNT." USAToday, June 27, 2007. (Accessed 22 March 2013).

10 "Basketball Equipment: Total Consumer Exp. by Type of Equip. (in mil. of $)," Sports Business Research Network database. (Viewed 22 March 2013).

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Electronic Resources

Association for Professional Basketball Research - attendance figures
http://www.apbr.org/attendance.html

The page is specifically for attendance numbers, but there are other links and data that may be of interest.

BasketballReference.com
http://www.basketball-reference.com/

A source for information on players, teams (includes relocations and defunct franchises), seasons (back to 1947), coaches for both the NBA and WNBA. Does cover the NCAA Tournament and Olympics play as well. Draft coverage is also included and goes back to 1947.

Berri, David J. "Stars at the Gate : The Impact of Star Power on NBA Gate Revenues." Journal of Sports Economics 5(1):33-50 (2004).
http://jse.sagepub.com/cgi/content/refs/5/1/33

Lambert, Craig. "Has winning on the field become simply a corporate triumph?" Harvard Magazine. 103 (September-October 2001).
http://www.harvardmagazine.com/on-line/09014.html

NBA Business / Business of Basketball
http://www.insidehoops.com/business.shtml

Inside Hoops covers men's basketball professional and collegiate with some high school and street basketball as well. The business area includes year-by-year salary information (some information back to 2002-03) including minimum salary information back to 2005, game attendance, TV contracts, collective bargaining agreement information

NBA - Stats
http://stats.nba.com

Official page for the NBA statistics on teams and players.

National Basketball Association (NBA)
http://www.nba.com/

Homepage for the National Basketball Association. Includes news, scores/standings/schedules, as well as information on teams and players.

National Basketball Association - Development League
http://www.nba.com/dleague/

Official homepage of the D League. Includes player and team information.

National Basketball Players Association (NBPA)
http://www.nbpa.org/

Homepage for the NBPA which is the union for current professional basketball players in the National Basketball Association formed in 1954. Information on the collective bargaining agreement, a list of player representatives by team, news, and events.

Soonhwan Lee, D.S.M. and Hyosung Chun. "Economic Values of Professional Sport Franchises in the United States," Sport Journal 5(3) (Fall 2002).
http://www.thesportjournal.org/article/economic-values-professional-sport-franchises-united-states

Women’s National Basketball Association (WNBA)
http://www.wnba.com/

Homepage for the Women’s National Basketball Association. Includes news, scores/standings/schedules, as well as information on teams and players.

Women’s National Basketball Players Association (WNBPA)
http://www.wnbpa.org/

The homepage for the WNBPA which is comprised of all WNBA players and was formed on November 6, 1998. The collective bargaining agreement is includes, as is information on players, information on becoming an agent, a list of player representatives by team, a news archive.

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Selected Print Resources

Books

Ashe, Arthur. A Hard Road to Glory--Basketball: The African-American Athlete in Basketball. New York, N.Y. : Amistad : Distributed by Penguin USA, c1993.
LC Call Number: GV885.7 .A84 1993
LC Catalog Record: 93037948
Publisher description

Ashe traces this development from the club players of the 1920s to the colleges -- including the achievements of athletes in the traditional black colleges -- and on the professional basketball players of today.

Bjarkman, Peter C. Hoopla : A Century of College Basketball. Indianapolis, IN : Masters Press, 1996.
LC Call Number: GV885.7 .B53 1996
LC Catalog Record: 95043174

Historical perspective on the growth of basketball, with profiles on the greatest players, teams, coaches, and events.

The Business of Basketball. Carmel, CA : Paul Kagan Associates, 2001 -
LC Call Number: GV885.513 .B82
LC Catalog Record: 2001214842

This publication is no longer in print but can still be useful in understanding the business aspects of basketball. Includes statistics on all facets of basketball financing and marketing as of the publication date.

Jozsa, Frank P. Sports Capitalism : The Foreign Business of American Professional Leagues. Burlington, VT : Ashgate, c2004.
LC Call Number: GV716 .J68 2004
LC Catalog Record: 2004015070
Table of Contents

Keogh, Damian. Money for Jam : Sport, Big Business, the Media and Me. St. Leonards, NSW : Allen & Unwin, 1996.
LC Call Number: GV884.K42 A3 1996
LC Catalog Record: 97201218

Economic and social perspectives on the Australian National Basketball League.

LaFeber, Walter. Michael Jordan and the New Global Capitalism. New York : W.W. Norton & Co., c2002.
LC Call Number: GV884.J67 L34 2002
LC Catalog Record: 2003265705

Discusses the impact of sports and entertainment on world-wide marketing.

Rosen, Charles. Scandals of '51 : How the Gamblers Almost Killed College Basketball. New York : Holt, Rinehart and Winston, c1978.
LC Call Number: GV885.7 .R67
LC Catalog Record: 77025355

Details the point-shaving scandals of 1950 and '51 and their affect on the industry.

Surdam, David G. The Rise of the National Basketball Association. Urbana : University of Illinois Press, c2012.
LC Call Number: GV885.515.N37 S87 2012
LC Catalog Record: 2012009723

Total Basketball : The Ultimate Basketball Encyclopedia. Wilmington, Del. : Sport Classic Books, c2003.
LC Call Number: GV885.7 .T68 2003
LC Catalog Record: 2003111745

Journals

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Library of Congress Catalog Searches

Additional works on the basketball business in the Library of Congress may be identified by searching the Online Catalog under appropriate Library of Congress subject headings. Choose the topics you wish to search from the following list of Library of Congress subject headings to link directly to the Catalog and automatically execute a search for the subject selected. Please be aware that during periods of heavy use you may encounter delays in accessing the catalog. For assistance in locating the many other subject headings which relate to basketball as a business, please consult a reference librarian.

• Basketball--United States
• Basketball--Economic aspects--United States
• Basketball--Corrupt practices--United States
• National Basketball Association
• National Basketball Association--Management
• Women’s National Basketball Association.

Last Updated: 05/21/2013