Professional sport leagues are some of the most popular and lucrative businesses on Earth. They create a wildly entertaining product that, in the case of organizations like the NBA, is enjoyed by fans all over the world. That then generates plenty of money-making opportunities.
There are a range of avenues the NBA uses to bring in cash, and all of them directly support the league in one way or another. While aspects like commercial contracts or TV deals go a long way, the money doesn’t stop there. In fact, that’s just where it begins.
Breaking down those streams is critical to understanding how the NBA operates. There’s a lot behind the on-court product, and they all come together to create one of the largest sports leagues in the entire world. In fact, it wouldn’t exist without them.
Major Revenue Streams
The NBA is an extremely diversified organization with plenty of entities under its umbrella. Seeing how those work together, and how they are profitable, is the best way to break down the business of the NBA and explore its key revenue streams.
Broadcasting Rights
By far the most lucrative revenue stream for the NBA is TV deals. The league broadcasts on a range of networks, all of which have different payment structures and contracts.
The largest of those are national deals, which pertain to ones made with big TV stations and streaming services. Currently, the NBA has a nine year deal worth roughly $2.7 billion a season with ESPN/ABC and Turner air. However, their newest negotiations aim to be much higher.
While there is plenty of money to be had with the current contract, the league plans to create a $76 billion dollar move and bring in new partners. No one is sure who those may be, but Disney, Amazon, Comcast, and Warner Bros. are all looking to join in if possible.
On top of that, the NBA makes money from local television deals. While much less lucrative than national contracts, they still are worth a substantial amount (upwards of $1 billion) when spread across thirty teams. That goes double for big market franchises like New York and LA.
The league is never going to match the income of national deals, but they can bring a significant amount of additional revenue in markets that have a lot of viewers or fans. The same is true of teams with international players as well.
As the NBA continues to grow outside of the U.S., they do what they can to tap into the foreign market. International broadcast rights are also worth quite a bit, generating more than $500 million a season over the past few years. That will only go up with time.
Ticket Sales and Stadium Revenue
NBA teams also generate income by actually getting fans into seats. In-season attendance is a big part of the league’s business model, and it’s something they’ve pushed more and more over the past decade.
The league brought in $2.9 billion from seating and luxury suites during the 2022-2023 season. A lot of that comes from the fact that the league set the record for regular season total attendance, sold out games, and average attendance last year.
In addition, concessions and in-stadium purchases made roughly $900 million. While that’s a much smaller figure than ticket sales, it’s still a large chunk of money that proves people are willing to spend once they get to the stadium.
As with local TV rights, ticket sale revenue is largely dictated by a team’s popularity. The more a team sells out, the more money the NBA is set to make. That means teams who do well, or who have a passionate and loyal fanbase, tend to bring in more money over time.
Sponsorships are another way the NBA makes money. In fact, that revenue stream generated $1.66 billion last season alone. That includes rights for teams and arenas, both of which generate plenty of money over the course of multiple seasons.
The league diversified greatly on that front, bringing in deals from jersey patches, naming rights deals and even global sponsorships like their contract for preseason games with Abu Dhabi. They have many active partners, all who are willing to pay out for the privilege of that title.
It’s also important to mention licensing agreements. Partnerships with big brands like Nike generate upwards of $1 billion for the league, making such deals extremely important to the organization’s fiscal health.
Merchandise and Licensing
As mentioned, merchandise goes a long way for the NBA. Jerseys, apparel, and collectibles are all areas where the league brings in money throughout the course of a season, and it’s where they find additional revenue during the offseason too.
NBA-branded merchandise is worn all over the world, and it brings in well over $1 billion a year for the league. The big teams drive such sales, with the Warriors leading the pack, while individual players like LeBron James and Stephen Curry sell more than anyone else.
Apparel and collectibles are a part of that as well. While they don’t make as much as jersey sales, the two areas do quite well and continue to help push the NBA brand.
In the same vein, the NBA 2K video game series also does well for itself. Reports show it made $1.2 billion in quarter two of last year, marking a new record for the franchise. That number will only climb with time and put it as one of the biggest money makers for the NBA.
TV deals are where the NBA makes most of its media money, but they aren’t above branching out to new services too. The league runs two subscription-based streaming services that offer live and archived games: NBA League Pass and NBA TV.
While there is no direct information regarding how much revenue the two services bring in, TV is available in more than 35 million homes across the US and League Pass’ users were up 50 percent from the previous season.
Both of those show that the league’s streaming services are only getting more popular as time goes by. It’s no wonder that executives want to push them as much as possible. The same is true of digital ad revenue.
Social media continues to be useful for the league, who has one of the youngest fan bases of any sports league. They garnered more than 32 billion views across all of their social media accounts last season, and their YouTube channel added 14 million new followers.
It’s also worth noting that the NBA app generated over 1 billion views during the last season, tripling the previous total, and the global “NBA ID” membership saw a 40 percent increase in downloads. They are also the eighth largest account on Instagram.
Sports Betting and Gaming
Sports betting has always been a big draw for fans around the world, and it’s only grown in the past few years due to the recent rise in bettings apps and large partnership deals with companies like MGM Resorts. That’s why the NBA wants a piece of the pie.
Legal sports bettings has opened a whole new world for basketball, with the industry as a whole bringing in $11 Billion in revenue during 2023. The NBA seeks to earn a large portion of that, and is projected to get an extra $585 million from such bets next season.
That jump comes from both gaming-related revenue and general fan engagement. Two big partnerships with both DraftKings and FanDuel also give the league more ways to make money from bets like never before.
Conclusion
The NBA exploded over the last decade, rapidly rising to one of the most popular sports leagues on Earth. That explosion went a long way for the league, allowing them to fully branch out and take advantage of many, many different revenue streams.
Upward growth is a critical part of any big organization, especially one that has the global impact of the NBA. TV rights and streaming services will only continue to expand with each passing year, which in turn will lead to more ticket and merchandise sales.
They know when and where to branch out, and it’s clearly working based on the numbers. Sports are becoming more popular as a whole, but with the increased global interest in basketball the NBA may be able to get bigger than anyone. Especially if they keep diversifying in the above ways.
