The Business Model of the NBA


The National Basketball Association is the premier men’s professional basketball league in North America. Comprised of 30 professional teams, the NBA is the most popular men’s professional sport league in the world. The National Basketball Association is also the most watched sports league in the United States. There are three different teams in the NBA: the Los Angeles Lakers, the New York Knicks, and the Washington Wizards. However, you can’t watch an NBA game unless you have a ticket to a game.

The NBA season runs from mid-October to early April. Each team plays 82 regular-season games and then competes within and outside their division to get into the playoffs. The league fills eight playoff spots, with the division winners advancing to the postseason. The other teams, known as wild cards, can make the postseason, which is when the stakes are highest. A winning team is crowned NBA champion and advances to the next round.

Revenue sharing is another important aspect of the NBA’s business model. Although it’s not part of the basketball-related revenue, it helps alleviate the income inequality between teams in big and small markets. Each team pools their revenue each year and a portion of the revenue from the highest-earning teams is redistributed to the low-earning teams. In exchange for a small market team’s salary cap revenue, they must earn at least 70 percent of the league’s average revenue.

The NBA’s international expansion has led to many players making controversial statements about the current state of the United States. A recent study showed that Chinese fans are the second largest market for the NBA, and the league is growing exponentially. With Chinese basketball fans, the NBA is more profitable than ever. During the 2011-12 season, the NBA experienced its first lockout, with the owners ratifying a new CBA on December 8, 2011.

The NBA’s revenue sharing system addresses the growing income inequality between teams in big and small markets. All teams pool their annual revenue and the revenue of the highest-earning teams is redistributed to the smaller markets. In addition, the NBA also distributes its salary cap revenue to all members. It’s no longer about who wins, but who can win the title. A great team has the ability to create more money than their competitors.

The NBA’s revenue sharing system is a crucial part of the league’s finances. Inequality in the league between large and small markets is addressed with the revenue sharing system. Every team pools its revenue and pays the highest-earning team a percentage of that money. Each team gets their salary cap revenue, but the high-earning teams must pay more than those in smaller cities. They receive 70% of the revenue in the league.