NBA Business : League saved $1.5 Billion by completing season behind closed doors

NBA Business : League saved $1.5 Billion by completing season behind closed doors
The NBA spent $180 million to operate 100 days of basketball in its Disney bubble. But after spending such a huge amounts to stage the Covid-19 impacted season behind closed door, NBA has reportedly avoided losing $1.5 billion in projected revenue.

The latter part of the campaign was organized at the ESPN Wide World of Sports Complex after it was halted in March due to the coronavirus pandemic, but that investment allowed it to save significantly more, according to Sports Business Journal. 

NBA Business : How NBA managed saving itself from loses of $1.5 Billion ?

A total of 172 games were played inside the bubble and the majority of the potential lost revenue would have come from television, followed by sponsorship.

The NBA has lucrative US media rights contracts with ESPN, the dedicated sports broadcaster, and TNT, the cable and satellite network, worth around $2.6 billion per year until the end of the 2024-25 season. 

The league was also able to fulfil sponsorship obligations and signed new deals with technology giant Microsoft and beer brand Michelob Ultra, with both parties being involved in the courtside digital experience that allowed fans to appear virtually inside the arena at games.

Existing sponsor contracts were fulfilled through virtual signage during TV broadcasts and physical signage around the courts. For the finals, contested by the Los Angeles Lakers and the Miami Heat, the NBA unveiled a new court design that put the logo of presenting partner YouTube TV at the centre of the court for the first time.

Nonetheless, approximately 40 per cent of the NBA’s annual income comes from gate receipts, but that revenue source completely shutdown, league and its teams will end up losing tons of monies for the season. 

While the restart clearly was a huge operational success, NBA postseason TV ratings from Disney dropped 37%, including record low viewership for the Finals, as the league was forced to play its postseason in the crowded fall season during an election year instead of its typical spring dates.