Case Study #5: National Basketball Association – Why Amazing Happened in the 2008-2009 Season

Unlike the global economy, the National Basketball Association can rightfully boast a fantastic 2008-2009 season. Last week, I saw a full page advertisement by the NBA in the Wall Street Journal. Within the ad, the NBA cited some business metrics:

• Regular viewership up 14 percent and playoff viewership up 18 percent
• The 2009 playoff finals on ABC were the five most-watched TV programs in June and watched by a record-breaking global audience in 215 countries and 42 languages.
• NBA.com traffic up by 25 percent.
• Video streams up by 46 percent.
• The NBA stores on Fifth Avenue (New York, New York) and NBAStore.com set all-time sales records.

While these are FAN-tastic metrics for the NBA, they didn’t happen overnight for an enterprise pummeled with more liabilities than assets to its brand. Since 1998, viewership of NBA finals coverage has experienced a precipitous decline. Sports and media experts attribute this decline for three main reasons:

• Michael Jordan’s retirement from the game of basketball and less-than-stellar comeback to the game.
• The NBA lockout in 1998-1999 forced the season to be shortened to 50 games per team. The league sought changes to the salary cap system and a ceiling on individual player salaries. The National Basketball Players Association (NBPA) opposed the owners' plans and wanted raises for players who earned the league's minimum salary. This was not received well by NBA fans and the media, as people felt both sides were being greedy. Sportswriter Tony Kornheiser described the labor dispute as one "between tall millionaires and short millionaires”.
• NBA referee Tim Donaghy was accused of manipulating a couple of playoff series. Donaghy pleaded guilty to conspiring with gamblers. In a letter filed in federal court, his lawyer claimed that NBA executives routinely encouraged referees to ring up bogus fouls and discouraged them from calling technical fouls on star players (Rhoden, William C. " SPORTS OF THE TIMES; The N.B.A.'s Perception Problem Is Real " New York Times 18 June 2008).

Challenges like this require intense creativity, teamwork and insights to remove the liabilities and plan for future growth. Here are some things that the NBA has done to rightfully boast about its business metrics last week:

• Re-focused brand promise: NBA has had quite a few taglines over the years, most of which were linked to the game of basketball. Given declining viewership, reputational damage and other factors impacting the game of basketball, the NBA had to focus on other commitments, such as NBA Cares. In 2005, David Stern, Commissioner of the NBA, set a five-year goal for the program of collecting $100 million in donations, providing one million hours in service and constructing 100 places for families to learn or play. By the end of 2006, the league gathered $32 million in charitable funds and built 108 gyms, learning centers and libraries (Bucher, Ric. " Why NBA Cares is more than a PR slogan” ESPN 29 November 2006). According to an April 23rd, 2009 NBA press release, the NBA Cares exceeded their donation, service and construction goals. The off-season was clearly not a time for rest for players or the league – They worked very hard to try and overturn the greedy, self-serving perception with selfless acts of giving and caring.
• Increased access for the media: An unprecedented number of journalists were allowed to access players and coaches during the 2009 final playoffs . A trailer at Staples Center provided television feeds to 215 countries in 42 languages (Horrow, Rick and Swatek, Karla. " The NBA’s Growing Global Appeal” The American Chronicle 12 June 2009). Because of proliferating interactive web and hardware technologies, viewers become closer to famous, public figures. Why restrict viewership on a key medium (television) when other channels are opening up the access to famous, public figures (example: Twitter updates by Shaq during half-time)? The NBA is more culturally diverse now than it was ten years ago. In 1989, 14 countries were represented in the NBA. In 2005, 35 countries are now represented in the NBA (Gardner, Tanner. "Show Me the Money! The Globalization of the NBA”. 2 November 2005). A 100%+ increase in non-U.S. representation demands an extensive global media strategy.
• Grow creatively in key global markets: The league decided to get into the reality television business. "Mengniu NBA Basketball Disciple," started airing in China last month. The show, a basketball competition in 64 cities involving retired NBA stars, will be broadcasted on Shandong TV in mainland China on Friday nights until August 28th. The winner will receive an all-expense paid trip to try out for the NBA's developmental league. An estimated 300 million people -- a total equal to the entire U.S. population -- play basketball in China, the NBA said, citing data provided by the Chinese Basketball Association. The number of viewers of league programming in China rose 34 percent last season to a record 1.6 billion, while traffic on the Chinese section of NBA.com has surged more than 50 percent. (Klayman, Ben. "NBA reality show another step for growth in China” Reuters 2 April 2009). Not only does this help the NBA recruit basketball talent in China, but it also generates ad revenue from a large and targeted base of viewers in a very engaging and creative way.

Amazing happened for the NBA because it infused a greater sense of social responsibility in its core brand, granted greater access to sports media representatives during the 2009 final playoffs and executed a creative way to recruit talent, build global brand and drive revenue by launching a reality television show. Take a look at the videos: NBA is still about basketball, but notice the humanity of the words. A greater, more noble spirit is in the brand now. And that may make the entire game better over the years.

Attaining and sustaining double digit ratings may take a few years, but as long as NBA continues to stay true to its renewed brand promise on and off the court, amazing WILL continue to happen.