Founded in 1946, the National Basketball Association (NBA) has grown into a multi-billion dollar industry, with 30-teams in the United States and Canada. It is the world’s best professional basketball league in the world, and one of the four most significant sports leagues in North America. The league generates approximately $8 billion in annual revenues through television deals, arena receipts, and advertising sponsorships, third behind the National Football League (NFL) and Major League Baseball (MLB).
Advertising and sponsorships represent the fastest growing revenue stream for the NBA. The league saw sponsorship climb 12.5% in 2021-22 to $1.65 billion, representing about 20% of overall revenue. The NBA has signaled that it will continue growing this segment in the upcoming season by approving two more corporate advertisement placement options on team uniforms.
According to league sources, these sponsorships improve revenues and help grow the game globally. Accordingly, the NBA lines up sponsors from all over the world. New sponsors in 2021-22 included Coinbase, Google, ServiceNow, LegalZoom, and Wilson Sports, joining global brands and official NBA partners Kia Motors, Gatorade, Microsoft, Pepsi, Nike, and AT&T in synergistic relationships that benefit all parties involved.
Regarding sponsors, the technology sector was the top spender, ahead of banks, cryptocurrency, sports apparel, and telecommunications.
What’s interesting about these sponsorships is that they bring with them new advancements which change and enhance how fans interact with the teams, players, league, and the game itself.
Leading this charge are three major league sponsors. Google, Meta, and Microsoft are not only driving revenues to the league but are pushing the future of sports to the present. The introduction of the Google Pixel Arena, NBA Lane, and NBA Court Optix are creating virtual communities that serve the interest of fans globally while growing new users and fan engagement.
Crypto Companies Make a Splash
Unsurprisingly, coming off a record year, brands in cryptocurrency made a big splash in basketball sponsorship. The sector was responsible for over $125 million in spending in 2021/22, a 60-fold increase over the previous year. Five businesses, in particular, are responsible for over 90% of the cryptocurrency sector spending in the NBA. Webull, Coinbase, Crypto.com, Socios, and FTX have bet big on naming rights and jersey patch sponsorship.
This includes Crypto.com securing naming rights for the Los Angeles Lakers home arena in a deal worth $700 million over 20 years and the Miami Heat and FTX agreeing to a 19-year $135 deal to rename what was formerly the American Airlines Arena to the FTX Arena. It remains to be seen if this level of spending carries over to this season as cryptocurrencies have been hard hit in 2022.