As the NBA game has gained more popularity globally, there has been a positive correlation with the increased revenue generated. Global interest has allowed organizations and the league as a whole to embrace non-traditional ways to garner alternative revenue streams. One for example, is the introduction of jersey advertising patches, back in 2016. Jersey patches are very common in soccer as it's seen on almost all jerseys. It is something the NBA tried to stay away from, but made more sense to partake in as their popularity has grown.
Jersey patches allow for each team to partner up with businesses for sponsorship revenue. In the first year of the program the total amount generated was around $150 million. The average deal for each team has significantly grown each year. For example, the Los Angeles Lakers signed a $100 million deal over five years with Korean food brand, Bingo, back in 2021.
The league's National Television deals have also played a role in their revenue increase. In 2016, ESPN and TNT agreed to a deal that would net the league over $24 billion over nine years. The payout equated to more than $2.4 billion per year to the league. The National TV deal is currently the league's most lucrative revenue stream as of today.
In addition to the National TV deals, each team has its own local television deal. Each deal is different from the other and value is typically dependent on the size of the market. The Lakers netted a $3 billion deal over 20 years with Time Warner. The partnership started in the fall of 2012. Although that’s on the high end of television deals, it shows just how much money some of these teams are reigning in. There are still tickets, merchandise, in-arena sponsorships, and many other areas of revenue that teams are generating income from.
With the NBA’s National Television deal ending in 2025, there are reports that the league is looking for a new contract north of 70 billion dollars. This new contact would be nearly three times more than their current contract. It is still very premature and no concrete evidence has come out, but there are rumblings that businesses like Amazon and Youtube may try to get in the bidding process.
The legalization of sports gambling will contribute a significant amount towards future revenue for the league. Legalization has already been introduced in several states. Some notable states with legalized sports gambling are Nevada, New Jersey, and Illinois. New York recently legalized it and California has sports gambling on the ballot this upcoming fall. As legalization becomes nationwide the NBA will be able to garner additional revenue.
Currently, the average NBA team is nearly $2.5 billion which is almost three times more than it was in 2010. The revenue paths for the league are endless. The NBA is more popular than they ever have been and continue to grow in popularity each year.