Last season was a rousing success for the National Basketball Association. The league's two marquee teams, the Boston Celtics and Los Angeles Lakers, met in the finals, and television ratings soared 51% over the prior year. The league's two biggest stars, Kobe Bryant and LeBron James, were on winning teams and getting a lot of prime-time exposure, wowing fans and sponsors.
League-wide revenues hit a record $3.8 billion during the 2007-08 season, 6% more than the prior campaign, and the average team posted a profit (in the sense of earnings before interest, taxes, depreciation and amortization) of $10.6 million, the highest amount since Forbes began tracking NBA finances 10 years ago.
The typical NBA franchise is now worth a record $379 million, 2% more than last year. The new eight-year agreements with ABC, ESPN and TNT that began with the 2008-09 season are worth $7.4 billion, 21% more than the prior deals on an annual basis.
By The Numbers: The NBA's Most Valuable Teams
Three teams experienced double-digit gains in value this year, led by the Portland Trail Blazers, whose value increased 21% to $307 million. Owner Paul Allen took control of the Rose Garden last year after he relinquished his stake in the arena during bankruptcy proceedings during 2004. The move gave Allen access to the arena's revenue streams, including luxury suites, concessions and ad signage.
The Celtics' NBA-record, 42-win regular season improvement and NBA title boasted the value of the franchise 14% to $447 million, ninth highest in the league. Meanwhile, Oklahoma City Thunder owner Clay Bennett resurrected the team formerly known as the Seattle SuperSonics, trading in a half-empty arena with a crummy lease in Seattle for a sold-out building in Oklahoma City where he keeps all of the revenues. The value of the Thunder is $300 million, 12% more than last year.
But troubles in the overall economy will make this year much more difficult for the NBA. Season ticket renewals and new sales are down this season. The NBA recently laid off 9% of its staff on concerns over the economy. Consider, too, some of the arena naming rights partners for teams around the league: American Airlines
Each of these companies saw its stock dive more than 80% at some point over the past 12 months, and some sponsors might look to back out of their deals. Many companies are scrutinizing every expense these days, and some teams are going to have problems when it comes to getting sponsors to sign on for next season.
