SGP PowerPoint

The Business Aspects of the NBA

Tom Foy

Ms. Oren

Period 1

Overview

• PowerPoint–Look at all the aspects of a Sports Business–Break down the income of teams and players

• Application

• Class Activity

• Conclusion

Personal Relevance

• I hope to one day be a General Manager or a sports agent of a major sports organization whether it be in the NFL, MLB, or NBA.

Audience Relevance

Thesis

• Beginning as a made up game at a YMCA, basketball and the NBA have evolved into a complex organization involving players, owners, sponsors, and the media in a huge money-making enterprise.

History of the NBA (Past)

• Origins of the Game–Based off 13 rules

• Creator–Dr. James Naismith

(http://www.nba.com/history/thegame_index.html)

History of the NBA (Now)

• All 13 rules have been modified• 24 second shot clock is still in effect

– To keep the game:• Exciting• Offensive showcase every game

(http://www.nba.com/history/thegame_index.html)

Commissioner

• Holds the highest power– David Stern

• Fourth Commissioner• Very strict and demanding job• Lawyer

Ownership

• Controls:– Pricing– Player salary’s – On court presentations

• Has to meet salary cap• Luxury tax payment• Highest ranking woman

– Susan O’Malley

http://www.insidehoops.com/nba-owners.shtml

Stadiums

• Sometimes owned by the NBA team

• Rent is paid to the Owner of the Stadium

• Companies inside the Stadium

(Coyle)

Halfway Attendance

• Bulls 2009-2010• Avg. 20,705

– Wins/Lost» 31/29

• Nets 2009-2010• Avg. 12,905

– Wins/Lost» 6/53

www.espn.com/attendance

Final Attendance Numbers

• Bulls 2009-2010–Average 20,725

• Win/Lost– 41/41

• Nets 2009-2010–Average 13,103

• Win/Lost– 12/70

http://www.nba.com/standings/team_record_comparison/conferenceNew_Std_Div.html

Attendance continued

• One player can make the attendance go up

–Allen Iverson

www.nba.com

Salary Cap

• Luxury tax on all NBA teams

• All teams have the same cap no matter how much more the owners have

• Trades

(Devlin)

Average Salary

• 2005-06–5 million dollars

• 2006-07–5.215 million dollars

• 2007-08–5.356 million dollars

• 2008-09–5.585 million dollars

http://members.cox.net/lmcoon/salarycap.htm#Q24

Average Salary cont.

• 2009-2010–5.854 million dollars

• Highest paid player–Tracy McGrady

2004-2005 Salary Breakdown

http://www.swivel.com/charts/2642-NBA-Team-Salaries-2004-2005-

2009-2010 NBA Salary Cap

• Any team that goes over the cap

– Has to pay $1 for every $1 that the team goes over

• Luxury Tax– Last Season

• $71.2 Million

– This Year• NA

http://withleather.uproxx.com/2009/07/nba-salary-cap-lowered-for-2009-2010

Foreign Players

• The NBA has expanded Internationally

• Total of 86 International players on only 30 teams

(http://www.nba.com/players/int_players_0607.html)

Most Popular Foreign Players

• Tony Parker–2007 NBA Finals MVP–NBA All-Star three times–All-NBA Third Team

Foreign Players Cont.

• Yao Ming–Member of the China National team–Tallest player in the NBA

• 7ft 6in

–NBA All-Star 7 times–All-NBA team 5 times

Influence on the World

Merchandising

• One of the key factors for any sports team• Jerseys • Sneakers• Allen Iverson (AI)

– Reebok

http://www.footballfanatics.com/NBA

Sponsors

• Source of some income for the league

• Have to pay a price to post their name with the NBA logo

• Sponsors change from stadium to stadium

http://nbahoopsonline.com/Articles/2007-08/NBArevinuesharing.html

Sponsors inside and outside

Outside the Wachovia Center Inside the Wachovia Center

Adidas

• Signed an 11 year contract

• Replaced Reebok’s contract

• Contract started at the beginning of this past season

http://sports.espn.go.com/nba/news/story?id=2404020

Media

• Has a huge effect on the league

• Shows the fans the games of their favorite players

• Shows interviews

• Coverage from around the world

(Coyle)

Media for the Fans

Video Games• NBA 2K• NBA Jam• NBA Live• NBA Street• NBA 10• NBA Hang time• NBA Ballers

• Online web feeds• NBA.TV

Television

• ABC• CBS• ESPN• NBA TV• NBC • TNT• Local TV Networks

http://hoopedia.nba.com/index.php?title=NBA_Technology_History

Promotions

• This is based on the team and what they feel is right for their fans

• Better teams many have more or less promotions• Charlotte Bobcats

• Low fan base• Fighting the economy to stay afloat

(Devlin)

Ticket Sales

• Depends on the team/organization–Ex. Bobcats low pricing

• $130.00– Center Court

–Cavaliers• $160.00

– Center Court

• Better teams support the lower teams

(http://www.nba.com/cavaliers/tickets/)

(http://www.nba.com/bobcats/bobcats_tickets_landing_page.html)

Fines/ Suspensions

• Happens when:– Players fight– Get Technical fouls– Get thrown out of

games– Enter the crowd

• For any reason

• Come from NBA Commissioner or team

“Legends in Business”

• This was created to share its knowledge and expertise in career development and emphasize the importance of diversity in the work place

• “The Team”–Julius Erving–Dominique Wilkins–Clyde Drexler–Jamal Mashburn–Dave Bing

http://www.nba.com/careers/legends_in_business.html

Marketing

• New Jersey Nets– Free Jersey’s

• Seek interest to the fans

• Dallas Mavericks– Free ticket to All-Star

game• With purchase of full-

season ticket package

Basics of a “Team”

Awards

• After each season these awards are given out– The Sixth Man Award– The Most Improved Player Award– The Rookie of the Year Award– Defensive Player of the Year– Coach of the Year– MVP (Most Valuable Player)– Executive of the Year– All-NBA Team– All-Defensive Team– All-Rookie Team

Transactions

• The biggest part of the NBA

• Beginning process for putting a winning team

• Takes place throughout the entire season• Trade dead line

– This year was Feb. 18 at 3 pm

http://www.nba.com/news/transactions/2010.trade.deadline.tracker/index.html

The Lottery

http://blogs.suntimes.com/sportsprose/nba-draft-lottery.jpg

The Draft

• Players move up and down draft boards

– Draft is only 2 rounds

• Players from US colleges and all around the world are drafted

• Highest draft pick is paid the most

The Draft

• Injures during the season effect a teams draft board

– College Example from this year’s Final Four

• Da’Sean Butler from West Virginia

www.espn.com

Community Service

• NBA Cares–Is the service the NBA supplies to community

• Different lines of service –Players have their own community service–Foreign players go back to help their

countries in every way

Community Service•League wide•Worldwide

•All over•Africa•Asia•Europe•North America

•All US Cities•New Orleans was the biggest project for the league

http://www.nba.com/allstar2008/nba_cares/

Community Outreach

• NBA players also support–Volunteerism–Child Abuse Prevention Programs–Hunger Relief–HIV/AIDS Awareness–Special Olympics

Read to Achieve

• Shows kids the importance of education

• Education is everything

Recycling Program

• Every NBA Stadium• Work with the city

http://www.nba.com/dleague/dleague/read_to_achieve_index.html

Application

• NBA games

• Compared the business before and after

• Took pictures

• Met Public Relations directors, Broadcasters, players, writers, and interns

Class Activity

• Make your own Jersey

Conclusion

• The NBA is a huge business with many opportunities. Whether you want to work behind the scenes, volunteer, or become the Commissioner you must work long hours, like traveling, and get along with a diverse group of people.

Works Cited

• http://i.cdn.turner.com/si/2010/writers/frank_hughes/03/08/john.wall/john-wall-hughes.jpg

• http://www.theepochtimes.com/n2/images/stories/large/2010/04/03/DSeanButler98234022.jpg

• http://v3.kevincarrollkatalyst.com/images/uploads/nba_green_2_thumb.jpg

• http://netsarescorching.com/wp-content/uploads/2009/05/ping-pong.jpg

• http://aaunews.org/news/wp-content/uploads/2009/06/2009-nba-mock-draft.bmp

• http://bgchhalepono.files.wordpress.com/2009/09/adidas_logo.jpg

Works Cited

• http://www.tsu.edu/Images/media/center/MEDIA_6_2-11-06.jpg

• http://img.photobucket.com/albums/v503/nhoj_schmeitz/benwallacebrawl.jpg

• http://sports.espn.go.com/photo/2006/0513/nba_a_nash_395.jpg

• http://cdn.bleacherreport.net/images_root/slides/photos/000/173/932/96329227.jpg.16054_display_image.jpg

• http://beta.images.theglobeandmail.com/archive/00484/Stern13_484922gm-a.jpg

• http://retrosport.files.wordpress.com/2009/11/james-naismith.jpg

Works Cited

• http://farm5.static.flickr.com/4038/4169802901_e088234e61.jpg

• http://howtowatchsports.com/wp-content/uploads/2009/08/salarycap1big-300x269.jpg

• http://www.enbajerseys.com/site/images/jersey1.jpg

• http://media.mcclatchydc.com/smedia/2007/10/30/17/295-20071030-NBA-players-origin.large.prod_affiliate.91.jpg

Works Cited

• Badenhausen, Kurt, and Michael K. Ozanian. “The Business of Basketball.” Editorial. Forbes.com. N.p., 3 Dec. 2008. Web. 15 Nov. 2009. <http://www.forbes.com/ 2008/ 12/ 03/ business-basketball-nba-biz-sports-nba08-cz_kb_mo_cs_1203intro.html>.

• Berri, David J. “A Simple Model of Worker Productivity in the National Basketball Association.” The Business of Sports. By David J. Berri, et al. Ed. Brad R. Humphreys and Dennis R. Howard. Westport: Greenwood Publishing Group, 2008. 1-40. Print.

• Brock, Katherine Cromer. “New Stadium Gears Up For NBA All-Star Game.” Dallas Business Journal (May 2009): n. pag. Web. 15 Nov. 2009. <http://washington.bizjournals.com/ dallas/ stories/ 2009/ 06/ 01>.

• Jeanrenaud, Claude, and Stefan Kesenne. “Sports and the Media: An Overview.” The Economics of Sports and the Media. By Bill Gerrard, et al. Ed. Claude Jeanrenaud and Stefan Kesenne. Northampton, Massachusetts: Edward Elgar Publishing Limited, 2006. 1-26. Print.

Works Cited

• Kaplan, Daniel, and John Lombardo. “NBA Securing $175M for Clubs.” Editorial. Street & Smith’s Sports Business Journal. N.p., 16 Feb. 2009. Web. 15 Nov. 2009. <http://www.sportsbusinessjournal.com/ article/ 61537>. In this article, the authors use information based off the league and based off their numbers.

• Martzke, Rudy. “Mavs Boss: NBA Gains From Bryant.” USA Today 5 Aug. 2003: n. pag. Web. 15 Nov. 2009. <http://wf2dnvr17.webfeat.org/ mil7N1437/ url=http://web.ebschost>.

• Vollrath, Amanda. “New NBA Dress Code Too Strict at Best, Racist at Worst.” The Dog Street Journal (Nov. 2005): n. pag. Web. 15 Nov. 2009. <http://www.dogstreetjournal.com/ story/ 2842>.

Works Cited

• Coyle, Maureen. Personal interview. 8 Jan. 2010.

• Devlin, Matthew. Personal interview. 8 Jan. 2010.

• http://product.images.prosportsmemorabilia.com/61-07/61-07780-F.jpg

• http://image.made-in-china.com/2f0j00JMrERPCKZGcs/NBA-Jerseys-01-.jpg