NBA finals: The potential economic impacts in the United States

The Cleveland Cavaliers and the Golden State Warriors are set to face each other in the NBA finals for the fourth consecutive year. Both teams have won championship titles: Golden State in 2015 and 2017 and the Cavaliers in 2016. Although the NBA has a had a record-breaking year in terms of ticket sales and television viewership, the matchup between the Cavaliers and the Warriors is a bit tired—and the ticket sales are showing.

Some of the main factors that affect NBA finals’ revenue are number of games, novelty of the teams, and merchandise sales. The 2018 NBA final lacks many of these qualities. The Golden State Warriors lead 2-0 in the series in addition to being the heavy favorite going into the finals. Many believe that the series will not make it all the way to the seventh game, which usually brings in the highest television ratings and the greatest ad revenue. A record-breaking 31 million people tuned in to watch game seven in 2016, making it the most watched game in twenty years. A Golden State sweep of the finals will result in millions of dollars in losses; not only for broadcasting companies but also for the owners. ESPN estimates that a four-game sweep by the Warrior could result in a $22 million loss for the Golden State owners in all potential revenue endeavors.

Ticket prices also appear to be suffering; in comparison to NHL, the other winter professional sport giant, minimum buy-in tickets to for the NBA are significantly lower than the tickets for the NHL championship games. Forbes states that the average buy-in ticket the NHL finals are $881(Washington) and $1,031(Vegas) compared to $557 (Golden State) and $300 (Cleveland) for the NBA. The novelty of an NBA championship appearance for both San Francisco and Cleveland has clearly worn off, and although fans are excited to watch their teams compete, the demand for tickets is not nearly as great as it is for the two NHL teams competing for their first Stanley Cup trophy.

Despite the potential drop in ratings for the NBA finals, it is important to note that 2018 NBA season might have been the most successful season in the league’s history. According to Forbes, the league had a record high 741 sellouts and sold 95% of all tickets available. NBA ratings for all four of the networks that broadcast the games also experienced growth in the 2018 season.

So, despite the tired NBA championship final matchup, the league overall is expanding leaps and bounds. All eyes are on Lebron James as his contract expires at the end of the 2018 season. His decision to stay or leave Cleveland will greatly impact the league and the ratings in the following years.