Basketball is one of the world’s most globalized sports, perhaps only a distant second to the behemoth of soccer. It is a sport played at a high level on every inhabited continent, and the world’s greatest superstars are household names no matter where you venture. LeBron James is a known commodity. Arguably the world’s best active basketball player, James boasts name recognition wherever he goes.
Despite basketball’s seeming global domination, the sport’s premier league, the NBA, still lags behind its competitors in terms of revenue and domestic fan base. In 2012 and 2013, franchises in the NFL averaged a total revenue of $286 million. The maximum revenue for an NBA team in the time period was only $295 million with an average of $152 million for each team. The NFL’s only ostensible global marketing strategy is to play a few games in London (and one in Toronto) each year. If you asked most people around the globe who Tom Brady was, you’d be lucky if they knew him as Gisele’s husband.
Some would say that the NBA’s lackluster performance and reduced popularity in the States is due, in large part, to the lack of competitive balance. Even the most diehard NBA fans will tell you that, at the start of the season, only between 8 and 10 teams (out of a total of 30) have a legitimate shot at winning a title. In fact, in the last 35 years, only 9 franchises have won an NBA title, and two of those franchises (the Philadelphia 76ers and Dallas Mavericks) have only won it once in that stretch.
The same can’t be said for the NFL or even the salary cap-unfriendly MLB. Parity is even more widespread in the often loosey-goosey NHL where any team can win the Stanley Cup in a given year. Fans of teams in these sports are more willing buy tickets, merchandise, and other paraphernalia largely because their team is always one season away from glory. At least, that’s the theory.
The NBA still outpaces the NHL, but hockey franchise revenues have been steadily growing since the lockout season of 2004-05. But, franchises in the MLB and NFL continue to outperform NBA franchises by wide margins, despite the fact that the latter has a much more prominent global brand.
In recent years, the NBA has tried endlessly to restore competitive balance through a number of different measures. One of the major reasons for the lockout-shortened season in 2011 was the idea that small market teams were being left out of some of the big-market revenues. There is a slew of franchises that would never be able to attract big stars through free agency, meaning that the possibility of a turnaround is minimal. There’s a reason Carmelo Anthony stayed on a struggling Knicks team rather than testing his luck in Milwaukee.
Small market teams have traditionally relied on the draft as their lone saving grace, but even that system is flawed in some respects. Few small market teams have been able to create lasting success simply through drafting and maintaining the right prospects (think San Antonio, Oklahoma City, and, more recently, Golden State).
But, if you think competitive balance is just about the principle of the game, then you’d be wrong. It’s clear that teams that experience success produce the most revenue and the most fan engagement. Improved fan attendance, skyrocketing merchandise sales, and the added playoff revenue are all positive effects that franchises experience with increased parity. It may be the reason for the NFL’s dominance in the sports world despite its lack of a global brand. The concept that teams can go from worst to first in a single season is something that NBA fans hardly recognize. And it’s a big reason why the NBA is losing ground in the North American sports landscape.