How Expanded Local Broadcasts Unlock Sponsorship Opportunities for NBA Teams
The Trend
Ahead of the 2024-25 NBA season, eight teams across the league moved away from traditional regional sports networks in favor of alternative distribution models. The New Orleans Pelicans via Gray Media, Dallas Mavericks via TEGNA, and Portland Trail Blazers via Sinclair Broadcast Group are just three of the franchises that signed NBA new media rights deals this offseason to broadcast games locally via easily accessible over-the-air television.
This shift is not only a response to declining RSN (Regional Sports Network) viewership caused by cord-cutting and changing consumer habits but also a strategic initiative to reach a wider audience by leveraging local TV and streaming platforms. These deals will expand the Trail Blazers’ broadcast scope throughout Oregon and Washington by four times, while the Pelicans' reach will extend to 4.1 million households (nearly 7 million viewers) across Louisiana, Mississippi, and Alabama. Similarly, the Mavericks have tripled their audience reach, extending their broadcasts to 10 million viewers throughout Texas.
However, these deals are not without drawbacks, as they often generate lower upfront revenue for teams compared to the more lucrative Regional Sports Network (RSN) streaming agreements. The question for teams becomes: how can teams capitalize on their expanded reach to offset initial financial setbacks and increase revenue?
The Options
In 2023, the NBA generated $10.9 billion in revenue, driven primarily by key categories such as television and media rights, merchandise sales, ticket and concession revenues, and corporate sponsorships. In our equation, media rights are known and fixed, so the levers teams can focus on are their fans —merchandise, tickets, concessions – or their corporate partner sponsorships.
Focusing on the fan-driven revenue—through ticket sales, concessions, or merchandising—can yield only marginal gains. Not only have teams already optimized their ticketing & merchandising strategies but high ticket prices have started to significantly contribute to fan apathy and disengagement, per David Aldridge and ESPN.
Teams can instead leverage their expanded reach to secure more lucrative sponsorship deals. This creates a win-win situation: teams benefit from higher-value partnerships, while brand sponsors capitalize on the broader exposure teams are achieving through their enhanced audience reach.
The Strategy
The new media rights trend across the league is significantly enhancing teams’ brand exposure, which in turn will expectedly increase their overall brand value. With expanded viewership, teams like the Pelicans, Mavericks, and Trail Blazers will have greater access to larger and more engaged audiences, therefore increasing the exposure for brand sponsors.
We saw this situation play out on an international stage with the Los Angeles Dodgers after Japanese baseball superstar Shohei Ohtani signed his record-breaking contract ahead of the 2024 MLB season. In anticipation of a surge in viewership from Japan, the Dodgers quickly expanded their list of sponsors by signing deals with at least ten major Japanese companies for over $30M in sponsorship revenue. The sponsors were also vindicated as the Dodgers experienced record-breaking viewership numbers and TV ratings in Japan. This highlights how increased viewership—whether driven by a star player or a strategic media deal—can unlock significant sponsorship opportunities, benefiting both teams and sponsors alike.
Just as international audiences and sponsorships can be lucrative, local counterparts are equally powerful. According to Kirk Wakefield, local audiences are invaluable to sponsors because they offer a highly engaged, passionate, and loyal fan base. These “home team” fans are more receptive to marketing messages, making them an ideal target for brands looking to establish deep connections with a dedicated demographic.
Expanded "home team" viewership presents organizations across the league with a significant opportunity to identify and attract new local and regional sponsors. The initial financial impact of moving away from traditional regional sports networks may seem negative. But with the proper tools, teams can identify fan profiles most likely to respond to team and partner offers. These tools, unavailable among syndicated services, can also identify the most promising local, regional or national partnership prospects and deliver results.
Work with us!
Together, Torq and Wakefield can help organizations better understand the impact and opportunities for sponsorship and how to maximize strategic partnerships by leveraging fan segmentation research and partnership insights. Wakefield’s advanced research and predictive modeling along with Torq’s expertise in digital transformation can offer a powerful toolkit for teams to enhance fan engagement, identify and optimize partnerships with valuable sponsors, and ultimately improve revenue streams.
For more information please contact Michael Varraveto [Michael.Varraveto@gotorq.com] or Diana Curti Maffei [Diana@Wakefield.global].
About Torq
Torq is a consulting firm specializing in data and analytics, enterprise strategy, program management, digital product development, and marketing. With a focus on delivering innovative solutions, Torq helps clients navigate complex challenges and achieve their business objectives. Visit www.gotorq.com for more information.
About Wakefield
Wakefield is known for its expertise in scientific and reliable sponsorship and fan research. The Wakefield sponsorship database and predictive modeling provide members with insights and tools to optimize partnerships and fan relationships. Visit www.wakefield.global for more information.
Comments