The Business of the NBA Finals—Part 3

Television networks search the high seas to find programming that will appeal to a large concentration of the coveted male audience. Doing so can bring fortune in the form of revenue from corporate advertisers.

NBA Finals Ratings
Year	Rating	Matchup
2007	6.2	San Antonio/ Cleveland
2006	8.5	Miami/Dallas
2005	8.2	San Antonio/Detroit
2004	11.5	Detroit/Los Angeles
2003	6.5	San Antonio/New Jersey
Source: Nielsen Media Research

For ABC, the NBA Finals present an opportunity to tap into a diverse audience with a large disposable income. Owned by The Walt Disney Co., the broadcaster recognized the value of the NBA fan. From 2002 through 2008, it paid $2.4 billion for shared access with ESPN, its sister network, to 15 regular-season games; partial ownership to the playoffs, which could also be seen on TNT; and exclusive rights to the finals.

There are business perils in acquiring high-profile events with expensive price tags. Last year’s championship game, in which the Cleveland Cavaliers were swept by

the San Antonio Spurs in four games, was the lowest-rated finals in league history. It scored a 6.2 rating and an 11 share and was watched by only 9.3 million viewers, according to Nielsen Media Research.

Some analysts say because the matchup was between teams in smaller markets, numbers 17 and 37 respectively, viewership suffered. However, not since Michael Jordan’s last appearance in the 1998 NBA Finals has the series reached a staggering 29 million people.

Doug White, ESPN’s senior director of programming and acquisitions says, “We kept an eye on the [2007] dip, but one year will not keep us from moving forward.” In June 2007, the network extended its contract for $7.4 billion through the 2015-2016 season, and execs are pleased that this year’s matchup is between the Los Angeles Lakers and the Boston Celtics.

The Lakers-Celtics first matchup in the best of seven series was watched by an average of 13,384,000 viewers, according to ABC, an increase of 45% compared to last year. The Lakers-Celtics game, in which the Celtics won 98-88, averaged an 8.7 rating, up 38% over last year’s 6.3 rating. The broadcast “won the night” among all television networks, averaging more homes and viewers than any other show, with ABC winning primetime overall among all networks. The game one match helped the network mark its highest-rated Thursday among men aged 18-49 since September 2005, the network said. Ratings weren’t yet available for the Lakers’ 102-108 loss to the Celtics on Sunday.

The reunion of rivals has created a media bonanza, as the two teams have squared off on 10 different occasions. The first meeting was the 1958-59 championship, and the last face-off was in 1987, the highest-rated NBA Finals during non-Jordan years.

The benefit of playing in the second-largest market and the loyal following of franchise players like the retired Magic Johnson and current standout Kobe Bryant, is otherwise known as the Laker effect–a formidable force that will surely drive this year’s viewership.

In the last decade, when the Lakers played in the championship series, the finals averaged an 11.4 rating, a healthy increase from the average 7.0 rating generated by the Spurs’ last three appearances.

With the ideal matchup of the “Kobe Bryant-led LA Lakers against the Pierce-Garnett-Allen-led Boston Celtics, I’ll guess that the finals will average 13 million viewers,” said Nielsen’s Bill Gorman last month in anticipation of the NBA Finals lineup.

As for the future, “The league is on an upswing, and there are [other] players out there that haven’t even hit their prime but already have great star power,” White adds. “Our new contract will allow us to capitalize on the trend. It is all encompassing and includes digital media, phone, broadband, widgets, etc. We are able to carry content to any platform, taking us beyond the typical linear TV deal.”

The NBA Finals are pretty much Tivo-proof and will allow the network to introduce millions of expected viewers to new company-owned technology platforms. ABC will use the games to promote other programming while enhancing the overall brand, and its ownership of broadcast rights denies competing networks from having access to the property.

Next in the series: Advertising