This is Matt Reustle and today we are breaking down the National Basketball Association. We cover the key moments in the league’s history, its new media rights deal, an overview of its economics and franchise model, and why its star players have so much power compared to other leagues.
Our guest is Ethan Strauss. Ethan has been intimately involved with the league for the past decade and often writes about why the NBA, like other sports leagues, is not a traditional business. This episode was recorded in early 2023.
Show Notes
(00:00:00) – Introduction
(00:03:11) – (First Question) – His background and his entry into the basketball business
(00:09:24) – Key turning points that enabled the league to mature to what it is today
(00:12:53) – An overview of the league’s economics and scale
(00:16:01) – The dynamics of negotiating national and regional TV deals
(00:18:57) – How viewership is faring with an increasingly fractured TV audience
(00:22:40) – The counter-intuitive notion that lower TV viewership can help extract more media rights profits
(00:25:47) – The international market for the NBA
(00:31:06) – The unique role of the NBA commissioner and how it compares to other sports
(00:34:12) – How individual teams and their owners influence league dynamics
(00:37:27) – Rough splits between the NBA’s various revenue streams
(00:39:32) – Astronomical franchise purchase prices and owner dynamics
(00:41:34) – The possibility of expansion and the creation of new franchises
(00:44:41) – How the NBA’s star players draw in fans but also wield power over the league
(00:50:07) – The extent to which players’ popularity depends on nationality
(00:54:03) – How much players make in salary versus endorsement deals
(00:58:11) – Variables that could threaten the success of the league as a whole
(01:00:26) – Probable drivers for future success and growth of the NBA
(01:02:14) – The role of marketing in the NBA’s continued success
(01:04:15) – Cues the NBA could take from other leagues in terms of its media presence
(01:07:15) – Lessons for builders and investors when studying the NBA’s story
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