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NBA announced a record-breaking revenue and franchise valuation is skyrocketing

The NBA is a money making machine

Adam Silver on NBA's financial stability

The NBA season tipped off this at the beginning of this week for the 75th time in its history. Even though the world is still recovering from the economic consequence caused by the pandemic, it seems the NBA is doing extraordinary when it comes to finances. Adam Silver is expecting close to $ 10 billion in revenue after the last two seasons weren't so great financially for the league since they had over $8 billion in revenue.

It doesn't seem so strange the league took a hit from a revenue perspective in the last two years, primarily because of the pandemic and shortened NBA season. According to Adam Silver, "The $10 billion revenue projection is based on full arenas this season. I think we won't know until we can look back when this pandemic is truly over how we can grade ourselves relative to how other businesses have done. I'll just say that I'm really thrilled that we're back to something that looks closer to normal this year.

Silver also admitted they were operating with a loss and how luckily for the NBA, they were able to bounce back and expand other areas of their business.

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"I won't get into specific numbers in terms of operating losses… We lost significant amounts of money. The good news, I think, is that we're able to take a long-term view of this business and continue to grow in it, continue to invest in it. So we'll try to look at it as an ongoing investment in the business over a long period of time as opposed to a loss of an individual season."

According to BasketballNews NBA brought in a record $1.46 billion in sponsorships last season (to make up for half-empty arenas and other losses), and the NBA may top that number this year. 

The NBA also did a good job securing great deals with the media worth around $2.6 billion annually. There is a strong belief that the number will increase even more in the future. The crazy thing about those TV deals with the NBA is that there are some reports on how they might jump from the existing $24 billion to $75 billion in 2025. That means we are looking at another significant jump in earnings for the NBA, similar to that in 2016.

The impact of increased earnings has a spillover effect on the teams as well, and for the first time in NBA history, three franchises are evaluated at over $ 5 billion. New York Knicks, Los Angeles Lakers, and Golden State Warriors are among those teams, and there is also a trend of other teams racking up their value in the last couple of seasons. To put things into perspective, every NBA franchise is now worth at least 1.5. billion, which means everyone is benefiting from these major deals the NBA is initiating. 

The NBA is doing a phenomenal job from a marketing and sales perspective, and the fact it's a global sport helps its cause increase its value. After a challenging period for the entire world economy, it's evident NBA is doing pretty good now from a financial perspective, with quite a few solid plans in the near future that might position the NBA as the most lucrative league in the world. 

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