The best NBA markets of 2012-13

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Recently I’ve been taking a look at NBA attendance and ticket prices. I decided to combine this data with the Total Personal Income (TPI) data Arturo used for his famous post on NFL, NBA, MLB, NHL, and MLS expansion candidates. When you put all of that together, you can get an idea of how NBA franchises perform compared to their market size. Today I’m just going to focus on the positive: which NBA teams are out-performing their expected ticket revenues?

Note: you can find further details about the methodology — and a table — at the bottom of the post.

Barely better than expected

15. Orlando Magic
14. Milwaukee Bucks
13. Cleveland Cavaliers

These three teams are in the bottom ten NBA markets in terms of market size, and they perform just about as we’d expect given their respective sizes. Orlando punched above its weight for the past couple of seasons, but after Dwight Howard was traded to the Lakers, the team has suffered the second largest drop in nightly ticket revenue between this season and the last. The Bucks are just doing what they do best and remain consistently average. And despite suffering the largest drop in ticket revenue over the past three seasons, the Cavs are still in positive territory.

Slightly better than expected

12. Phoenix Suns
11. Dallas Mavericks

The Suns’ decline on the court has really made an impact on ticket revenues; the team has suffered the second largest decline in ticket revenue over the last three years. But like the Cavs, even though the playoffs are a distant dream and the team’s saviour (Steve Nash, in this case) is gone, the Suns are still doing okay. The Mavericks are still doing well, despite some on-court slippage; the Mavs’ ticket revenue has increased (slightly) in each of the last three seasons.

Significantly better than expected

10. Utah Jazz
9. Denver Nuggets
8. Oklahoma City Thunder

The Jazz and the Thunder are very similar when it comes to ticket revenues: they are the smallest NBA markets, haven’t seen much of a change in their ticket revenue over the past three seasons, and perform a good deal better than they should given their market size. On the other hand, the Nuggets are an average sized NBA market whose success this year is mostly due to having the third largest increase in nightly ticket revenue between this season and the last.

Top 7

7. New York Knicks

The Knicks play in an absolutely huge market, and as such, we should expect them to make a pile of money off of ticket sales. In the 2010-11 season, the Knicks were making a huge pile of money, but that pile was about as large as we would expect based on their market size. However, that season the Knicks put an improved product on the court and made the playoffs. As a consequence, the team saw a huge jump in ticket revenue in the following season. While this jump was not replicated this season, the Knicks have still had the largest increase in ticket revenue over the last three seasons.

6. Portland Trailblazers

Portland is an average sized NBA market, but its fans are notoriously dedicated. The team has had a couple of tough seasons and has suffered the 6th largest drop in nightly ticket revenue over the last three years. Even still, Blazers’ fans have kept this team in the top six.

5. Chicago Bulls

Chicago is the third biggest market in the NBA, behind New York City and Los Angeles. A couple of very successful years on the court have translated into the 5th largest ticket revenue increase over the past three seasons, and even though the team’s record isn’t as good this year, ticket revenues are still going up.

4. Boston Celtics

Not many people will be surprised with the top four teams on this list, including the Celtics. Boston is a largish NBA market, but the team has a storied history and has had several very successful seasons in recent years. While the season-to-season increases have not been very large, the nightly ticket revenue is already far above what we would expect for a Boston-sized market. With the careers of Kevin Garnett and Paul Pierce winding up, the Celtics have a very nice cushion to fall back on should the on-court product suffer over the next couple of seasons.

3. Los Angeles Lakers

The Lakers manage to one-up their old rivals once again. Los Angeles is the NBA’s second largest market, but the Lakers history, star players, and celebrity fans help push this franchise into the top three. While they have a nice margin, the Lakers might want to watch out for the Clippers, who are closing the L.A. gap very quickly.

2. San Antonio Spurs

San Antonio is the 9th smallest NBA market, but somehow manages to earn the 7th largest nightly ticket revenue in the league. This shouldn’t really be a surprise, as the Spurs have put together a ridiculous 24-year run where they’ve won over 67% of their regular season games (1286-622), won four NBA championships, and made four additional Western conference finals appearances. Led by stars like David Robinson, Dennis Rodman, Manu Ginobili, Tony Parker, and Tim Duncan on the court, and Greg Popovich off the court, the Spurs have rewarded fans for over two decades. In turn, the fans have rewarded the San Antonio Spurs.

1. Miami Heat

Were you expecting anything less from the Heat? Last year’s champs have had two consecutive seasons of good ticket revenue growth, leading to the 4th largest increase over the past three seasons. Winning will do that for a franchise. Having the best player in the league and winning 27 games in a row doesn’t hurt either.

Methodology

By multiplying average attendance by average ticket price, we get ticket revenue per game (TR/G). Importantly, the average ticket price determined by Fan Cost Experience does not include premium seats (suites, booths, courtside seats, VIP packages), so this isn’t the entire picture — but it’s close. Once we calculate that, we can compare TR/G to the TPI data. TPI explains just under 44% of TR/G, and using a linear trendline we can generate an equation to predict TR/G based on TPI. After that, it’s just a matter of comparing the difference between predicted TR/G and actual TR/G. In this post, I’ve represented that difference as a percentage of predicted TR/G.

Team 2010 TPI 2012-13 Ticket Revenue per game ($) Expected Ticket Revenue per game ($) % Above Expected Ticket Revenue
Miami Heat 242.3 1448424 899119 61.1%
San Antonio Spurs 78.4 1075537 708844 51.7%
Los Angeles Lakers 565.4 1904449 1274291 49.5%
Boston Celtics 253.5 1358807 912101 49.0%
Chicago Bulls 435.4 1568295 1123381 39.6%
Portland Trail Blazers 90.7 956295 723046 32.3%
New York Knicks 1028.1 2345246 1811659 29.5%
Oklahoma City Thunder 49.2 858271 674949 27.2%
Denver Nuggets 121.9 960345 759333 26.5%
Utah Jazz 43.6 813355 668400 21.7%
Dallas Mavericks 277.5 1037557 940039 10.4%
Phoenix Suns 152.8 872565 795226 9.7%
Cleveland Cavaliers 84.9 756978 716311 5.7%
Milwaukee Bucks 67.8 720968 696478 3.5%
Orlando Magic 75.3 725180 705210 2.8%

- Devin

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