2011 NBA Lockout: League Advertising Revenue Rises

The Wall Street Journal added another small piece to the puzzle this past week. Embedded in a story about how the NBA.com web site had removed all likeness of current players when the lockout started, there is a small bit of data that poses a few questions.

NBA Sends in Subs for Stars | Wall Street Journal

The chart reveals that the NBA.com web site has been growing in influence and in revenues. As we know, the NBA playoffs were a highly viewed series of games, and the NBA.com web site became more and more important as a result. If we look at the site's ad revenue:

NBA.com Advertising Revenue

2008 2009 2010
Ad Revenue $6.27M $11.67M $21.82M
% Increase n/a 86.1% 87.0%

Source: Barclays Capital & WSJ.com

Random Observations:

  • Obviously, this $22 million in web site revenue is dwarfed by the league's $930 million per year TV deal, but with continued growth, this revenue does have the impact of enlarging the revenue pie.
  • Where does this revenue hit the books? Does the league keep its own set of financial records that get audited and reported that are independent of the teams? Or do these revenues (and the expenses that accompany them) get distributed across the league?
  • Does this ad revenue get lumped in with basketball related income (BRI)? If so, then does the lack of content on the NBA.com web site effectively shrink that BRI? and the associated player percentage?
  • The relationship between the TV deal and this web site deal is a bit confusing. Part of the NBA's TV contract is with TNT, which is part of the Turner Broadcasting System. However, Turner also operates the web site, providing the content we see. How are these two arms of Turner Broadcasting connected?
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