Maybe the most telling fact about how far the National Basketball Association has come in the past 18 years is this: In 1980, the final title game between the Los Angeles Lakers and the Philadelphia 76ers was aired by CBS on tape delay at 11:30 p.m. EST - after the Late Show.
Or this: When the Dallas Mavericks entered the league that year, the franchise cost $12 million. The Toronto Raptors and Vancouver Grizz-lies each paid $125 million to join the league in 1995.This year the NBA will take in an estimated $1.7 billion in revenue from ticket sales and television rights and another $3 billion from ancillary products and promotional tie-ins.
The league recently renewed its television contracts with NBC and Turner Sports in a deal that will bring them a whopping $2.64 billion over the next four years, more than double their last contract.
To say that the NBA is the hottest game in town these days might be missing it by a few degrees. They are sizzling. Not bad for a sport that was once classified by an NBA executive as "somewhere between tractor pulls and professional wrestling" in popularity.
So what accounted for the turnaround? Why is the NBA such an easy sell nowadays?
Most people credit Commissioner David Stern with taking over a league that had a reputation for drug abuse, lackadaisical play and few household names and turning it into a powerhouse that is not only recognized but courted worldwide. He did it, they say, not by watching what Major League Baseball or the National Football League was doing as much as taking lessons from such business megamarketers as Coca-Cola, Disney and McDonald's.
Stern had some luck along the way - most particularly the entrance of players such as Magic Johnson, Larry Bird and a few years later Michael Jordan into the league. Couple that with the marketing strategies of the emerging athletic shoe industry, and superstars were born.
Stern also has an unusual product to work with. Basketball is a game, but it is more than a game. It is a business, but it is more than that, too. It is entertainment, but that doesn't quite say it all, either. But the combination of those elements with a number of intangibles - excitement, charisma, loyalty, intensity - make it stick. It is a game easily understood and played by any kid with a ball and a hoop, but it can also be played with such a high level of skill that it can be breathtaking to watch.
All that aside, Stern is credited with savvy marketing. Instead of throwing the field wide open, he has cultivated exclusive sponsorships. He has cultivated an international market. He has been highly protective of the NBA as a brand name. And while the league remains a confederation of independently owned franchises, each with marketing organizations of their own, the NBA has provided stability and unity - and a high degree of control - from the top.
The NBA is responsible for all national and international television rights, sponsorships and license relationships, with all these revenues shared equally among the teams. Each franchise negotiates local television and radio rights and keeps those funds. Each franchise also keeps its own ticket sales.
"We sell, we keep," is the basic motto, says Jay Francis, senior vice president for marketing for the Utah Jazz. A small percentage goes to the NBA, but most locally generated revenue stays with the franchise. With novelty items, licensing fees are paid to the NBA by Champion, say, or Starter, but the Jazz also keep the revenues they collect - and with stores now in California, Nevada, Idaho, New Mexico and Colorado, that's a pretty good chunk of change.
Other local revenues include luxury boxes, where a portion goes to the team and a portion to the arena; local sponsorships; TV spots and signage for the arena.
Francis, too, finds his job more enjoyable these days. "It was not easy, not fun," he says of the early '80s, when he began selling the Jazz. He, too, credits sound business acumen. "We are run like a first-class business; we follow smart business practices," he says. But he also notes that his "product" is much easier to sell these days. "Our players not only win, but they are quality people. They are good people off the court, too. You don't read about them being arrested or being involved in fights or about any other shenanigans." That's important, particularly in this market, he says. And, with the success of Karl Malone and John Stockton, and with Malone winning MVP last year, they've become household names around the country - and the world - finally, he says.
The Jazz's marketing plan includes three parts: tickets, sponsorships and players. And at times when ticket sales are not a hard sell, when games are frequently sold out, the Jazz still try to keep a presence in the marketplace, says Francis. They work with programs like the Junior Jazz, now in its 13th year, which involved 70,000 kids in Utah, Idaho and Wyoming this year. They work with the players on community involvement and think up new products to market. "Almost anything you can put a logo on, you can sell," he says.
Francis declines to say how much money the Jazz took in through its marketing. "There are some figures out there, but they're wrong," he says. But he will say that the franchise is not losing money.
And that's more than half of the 29 franchises can say. Even in these days of high-rolling contracts and worldwide exposure, those incomes are being offset by increasing expenses: higher salaries for players, higher travel costs; flat gate receipts.
That is part of the reason the league is reaching out to other revenue sources such as the international market and the Internet. A push to get more women involved was launched last year with the WNBA, a move that has been more successful than they had even hoped, say league insiders.
The NBA is not without its critics; those who say escalating salaries are detracting from the game; consumer leaders who worry that the desire to "be like Mike" puts pressure on kids to spend money; colleges who worry about young players giving up their education to play the game; fans who get fed-up with off-court behaviors of some players. And, of course, there's the inevitable retirement of Michael Jordan.
These are real concerns for league officials, who are very aware of the fickleness of fandom and know they can't assume that people will always love basketball.
"We're always looking for new business opportunities," says Francis. Still, he says, it's a fast-paced, exciting game. And, he says, as long as the Jazz can deliver a fun, exciting time at the Delta Center, "as long as we can have people going home at night - whether the team won or lost - feeling they had a good time, that they appreciated the clean Delta Center and had good food and enjoyed the antics of Bear and everything else that goes on there" fans will feel like they got a good return on their investment.
It's a game that appeals to all ages, races, genders and income levels around the world.
And maybe the most telling evidence of the future marketing power of basketball is this: A survey of 45,000 teens on five continents asked "What are your entertainment pursuits?" The answers: watching television. basketball. Another survey found that 40 percent of teens worldwide own NBA apparel and wear it at least once a week.
Or this: The NBA's Web site gets about 25 million hits per week.
NBA Top selling teams
1. Chicago Bulls
2. L.A. Lakers
3. Orlando Magic
4. Detroit Pistons
5. Seattle SuperSonics
6. New York Knicks
7. Houston Rockets
8. Charlotte Hornets
9. UTAH JAZZ
10. Philadelphia 76ers