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NBA Looks to Rebound as New Season Begins

LeBron James, #23 of the Los Angeles Lakers, shoots the ball during the third quarter against the Houston Rockets in Game One of the Western Conference Second Round during the 2020 NBA Playoffs at AdventHealth Arena at the ESPN Wide World of Sports Complex on Sept. 4, 2020 in Lake Buena Vista, Florida.
LeBron James of the NBA Champion Lakers tip off a new season on Dec. 22 (Image credit: Mike Ehrmann/Getty Images)

The NBA is launching its 2020-21 season into a hot advertising market. All it needs are viewers.

Last season the NBA was already looking into why ratings were down before the season was abruptly interrupted by the coronavirus outbreak just after the All-Star break. Ratings stayed down in the Disney World bubble where the season resumed and the playoffs were concluded, with national games played at odd times versus competition from summer and fall sports, including the National Football League.

But hoops springs eternal, especially in the world of advertising sales. 

“The sports market is really strong now. There’s just a tremendous amount of money in scatter,” said Jon Diament, executive VP, chief revenue officer at AT&T’s Turner Sports unit. 

Also Read: The Five Spot: Jon Diament EVP, Chief Revenue Officer, Turner Sports

With the production of a lot of scripted primetime shows delayed, entertainment rating points are scarce and advertisers are turning to sports, Diament said. “Most people in the sports space are sold out, college football, NFL and NBA for the fourth quarter.” 

Turner Sports ad sales Diament

Jon Diament of Turner Sports (Image credit: Turner Sports)

TNT’s NBA opening night is sold out, with more than 40 advertisers participating.

He said Tuner is projecting a sellout in the first quarter for its NBA inventory. Even the March Madness, the NCAA men’s basketball tournament is seeing a sales spike, after being cancelled last year.

Disney Advertising Sales, which represents ESPN and ABC, said it saw tremendous demand for NBA Christmas Day, when it will show five games starting with the Pelicans and Heat at noon ET and concluding with the Clippers and Nuggets at 10:30 p.m. Categories showing significant growth include entertainment, computer software, cellular systems, alcoholic beverages and computers.

Partly because of the NBA’s schedule changes and partly because of how the recession affected advertisers during the pandemic, TV ad revenue for NBA games was down 12% to $10.4 billion last year, according to Standard Media Index.

For Turner, the regular season was down 9% to $171 million and the playoffs were down 14% to $232 million.

Turner will be making up some of last year’s NBA audience shortfalls in the form of make good ads for advertisers this season, Diament said.

ABC and ESPN saw NBA revenue drop 13%. For the NBA Finals on ABC revenue fell 32% to $170 million, according to SMI.

Also Read: NBA Coronavirus Suspension to Cost Disney $306M, AT&T $168M: Analyst

Diament said Turner is counting on viewership to bounce back when games return to their normal cadence, with TNT showing basketball on Tuesday and Thursday nights. It is looking to the 2018-19 season in making audience estimates.

“We were somewhat realistic. We work with our marketing partners to try to figure out a fair way to estimate [ratings] I don’t think it’s going to be as bad as last year when games were in the summer and during daytime.”

On the digital side, Bleacher Report has become more closely aligned with Turner Sports.

For example, Bleacher Report features, like it expanded House of Highlight Moment of the Month award will be announced during TNT Telecasts.

Most of Turner’s NBA packages including Bleacher Report schedules and the company is counting on Bleacher Report to recruit young basketball viewers.

Stefanie Rapp, chief revenue officer, Bleacher Report, said 74% of its audience between the ages of 13 and 37 use social media to follow the NBA and when 90% of that audience sees something exciting on social media, they tune into the live game.

This season, Bleacher Report is integrating live TNT games directly into its app. B/R app users can watch a preview of a live telecast but will need a pay TV subscription to watch the full game.

A big advertiser for both Turner and Bleacher Report is FanDuel as sports get gamified and legalized sports gambling expands into more states.

TNT’s partnership with FanDuel was announced in July. The network will be doing a number of stunts with FanDuel through the season, integrating it into telecasts.

At Bleacher Report, FanDuel will sponsor all NBA related gaming content. “We’re developing shows and we’re developing social content,” Rapp said.

“Almost everything that millennials interact with has a gamification to it,” she said. “At one end, there’s the hardcore odds bets. But oh the other end, there’s the proposition betting and that’s really where Bleacher’s sweet spot is. Who will make the first three pointer all the way to some of the more intricate prop bets. That’s where the fun and engagement for that younger generation comes into play.”

Also Read: NBA Tips Off ‘Only Here’ Campaign New Season

Diament said about 50% of Turner’s NBA ad revenue comes from multi-year deals with the NBA’s official marketing partners. That tends to stabilize revenue, even if ratings fluctuate from quarter to quarter.

Most of last year’s advertisers are back, including media companies with movie studios, including AT&T, which will be advertising that their films will be available on streaming services like HBO Max.

Also Read: CarMax Hooping as Sponsor of NBA and Turner Sports

One new marketing partner for the NBA this year is CarMax, the new official auto retailer, replacing AutoTrader. CarMax will also replace AutoTrader as the sponsor of TNT Tip-Off, beginning Dec. 22. The auto retailer will also be present for TNT’s NBA playoff games, which climax with the Eastern Conference Finals.

Key returning sponsors for TNT halftime sponsor American Express, Inside the NBA sponsor Kia, AT&T. Michelob Ultra and State Farm.

Diament added that TNT is working with the NBA on expanded in-arena signage as long as fans are not allowed to attend games.

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.