Amid falling NBA viewership, the league announced that its revenues dropped 10% to $8.3 billion for the 2019-20 season.
This could be a result of a few reasons (ex. Rockets GM twitter post about HK, political activism, loss of fans).
However, among the biggest reasons for the revenue loss were an $800 million loss in gate receipts and a $400 million loss in sponsorships and merchandise. The pandemic being the main accomplice.
However, outside the pandemic, the NBA’s losses also included $200 million “net negative impact” from the loss of a partnership with China following Daryl Morey (Houston Rockets GM) tweet promoting Hong Kong freedom a year ago. It is believed that income from China accounts for at least 10 percent of the net revenue flowing into the NBA (and that number is growing).
It seems pretty peculiar that some of the NBA’s most vocal domestic social justice actors were also so worryingly mute when it came to China’s trampling of basic human rights.
The situation will get worse before it gets better, as ESPN writes that “the potential for a grim financial landscape without fans in the 2020-21 season looms over the league.” If the 2020-21 season advances without fans and accompanying gate-night receipts, the league expects a projected 40% loss in overall revenue, or approximately $4 billion.
This will also have dire consequences for the NBA’s compensation packages, potentially putting most teams into severe luxury tax territory, with little money left for this off season’s free agents.
Works Cited:
https://www.zerohedge.com/markets/nba-braces-record-40-drop-revenue-2020-2021-season