Hayes: Revisiting the NBA market-size effect

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Hayes: Revisiting the NBA market-size effect

Bob Hayes, Columnist

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Following yet another championship between the Los Angeles Lakers and the Boston Celtics – who collectively have won 33 of the NBA’s 67 championships and, perhaps more importantly, play in massive television markets – the infamous “Summer of 2010” had arrived. To the adamant disapproval of fans, megastar LeBron James announced his decision to take his talents to South Beach to join up with all-stars Dwyane Wade and Chris Bosh in Miami. Carlos Boozer signed with the Chicago Bulls to vie for a championship with Derrick Rose, while Amar’e Stoudemire moved to New York and was soon joined by Carmelo Anthony.

Looking at that NBA Finals matchup coupled with those monumental moves, NBA executives, fans and talking heads wrote their spiteful eulogies for the NBA’s small-market franchises. Los Angeles and Boston were in the Finals, and the top players had all moved to America’s biggest cities. There was no turning back.

This argument certainly seems to hold merit. The NBA has always been an urban league – popular in the big cities, while smaller cities and rural areas focus on football and collegiate athletics. All the players moving teams in 2010 moved from cities with markedly smaller market sizes – except for Bosh, but he moved from a historically unsuccessful team pinned away in Canada to Miami — to team up with two superstars.

Now that we are a few years removed from this perceived crisis, we can evaluate this argument a little better than we could have before. Yes, it has been a small sample of seasons, but the NBA is a league which reflects changes immediately due to the relatively significant impact of individual players.

Just how important is market size to the NBA? We can attack this question from three different angles. First, the success of teams. Take a look at the four teams remaining in the NBA playoffs and their respective cities: the Indiana Pacers, the Miami Heat, the San Antonio Spurs and the Oklahoma City Thunder. It is worth noting that these teams also represented the best teams in their respective conferences all season. Last season, Indiana, Miami and San Antonio also competed in the semifinals, joined by the Memphis Grizzlies.

All five of these semifinalists rank in the bottom half of NBA market sizes. The New York Knicks (1st-largest market), Los Angeles Lakers (2nd), Philadelphia 76ers (4th) and Boston Celtics (7th) all missed the playoffs and were, quite frankly, terrible this season. Yes, we are looking at just one season, but looking at the data, it is nearly impossible to make the argument that market size dominates the success of NBA teams.

Still, market size is greatly important to the NBA. If we look at Nielsen ratings for the NBA Finals by year, matchups between teams from larger cities clearly lead to higher television ratings. Last season’s Finals between Miami and San Antonio, despite being fantastically exciting and featuring the league’s brightest star, was the lowest-rated Finals since 2009, which featured the Lakers for the second straight year dominating a boring Orlando Magic team. This year, I suspect NBA Commissioner Adam Silver is having nightmares of a championship between San Antonio and Indiana, two small markets that fail to move the needle like James’s Heat or Kevin Durant’s Thunder.

Market size also has a significant effect on players’ individual endorsement earnings. If we look at the NBA’s highest-paid players — including endorsement deals — they all come from large markets, with the exceptions being Miami’s James and Wade and Oklahoma City’s Durant, who won the NBA’s Most Valuable Player award this season. If you have been watching the playoffs, you will surely notice that Durant – playing in the NBA’s third-smallest market – seems to feature in more advertisements than any other star, while Gatorade has picked none other than Indiana’s Paul George to star in its commercial. Though playing in a smaller market has not kept Durant and George from profiting from their popularity, still, stars from larger cities like the Los Angeles Clippers’ Chris Paul and Blake Griffin have been all over America’s television sets.

Next time another star — as will likely happen this summer with Kevin Love of the Minnesota Timberwolves — moves to a big city and signs a new sneaker deal, remember that the NBA’s biggest cities attract the most money and fame but not necessarily success on the court.

Bob Hayes is a Weinberg freshman. He can be reached at roberthayes2017@u.northwestern.edu. If you would like to respond publicly to this column, send a Letter to the Editor to opinion@dailynorthwestern.com.

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