The worst 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. The other day I wrote about the NBA teams that are out-performing their expected ticket revenues. Today I’m going to focus on the negative: which NBA teams under-perform given their market size?

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

Barely worse than expected

16. Toronto Raptors
17. Los Angeles Clippers

The Raptors and Clippers are relatively similar franchises — two teams in large markets who typically put a poor product out on the court. In 29 seasons in Los Angeles, the Clippers have won 36.7% of their games and made the playoffs only 6 times (including this season). In 18 seasons, the Raptors have won 40.4% of their games and made the playoffs 5 times. The Clippers, though, are on the right track: they’ve had the 3rd largest increase in nightly ticket revenue over the past three seasons. The same cannot be said for the Raptors, and given the current roster, one wonders how long it will take to change this.

Slightly worse than expected

18. Sacramento Kings
19. Houston Rockets

Two very different teams here: one is a small market team that has been hemorrhaging ticket revenue for years and is likely to be moved to another city, possibly as soon as next year. The Kings have posted the worst average attendance this season, as teams about to move tend to do. The other is a large market team that is on the upswing and improving. While the Western conference is tough, I expect the Rockets to improve on their ranking over the next couple of seasons.

Significantly worse than expected

20. Golden State Warriors
21. Memphis Grizzlies
22. Minnesota Timberwolves
23. Detroit Pistons

The Warriors are improving, but they are still below what we would expect given their market size. Most notably, their ticket prices are quite low (23rd in the NBA) and should be increased. The Grizzlies are a very small NBA market, but are improving and have posted the 4th largest increase in revenue between this season and the last (trading away a salary cap albatross will do that for a team). The T-Wolves are a medium sized market, and they are struggling to recover from a historical anomaly and a year of terrible injuries. The Pistons…well, at least they have Andre Drummond.

Bottom 7

24. Philadelphia 76ers

The 76ers looked like they were on the right track last season, but they have struggled on the court after trading away Andre Iguodala, Mo Harkless, and Nikola Vucevic for a player who will not play a single NBA minute this season and may not even be with the team next year (Andrew Bynum). Given the notoriously harsh Philadelphia fans and the likelihood of future success, things may look even worse for the team next season.

25. Indiana Pacers

Indianapolis is a small NBA market, and despite a couple of pretty successful seasons, the Pacers have not really improved their ticket revenues. This is due to a combination of two things:

  1. The Pacers’ ticket prices are the 4th cheapest in the league.
  2. The Pacers rank 25th in the NBA in average attendance.

Given that Indianapolis is also an overextended market, I’m not very optimistic that this team will be able to stay in this city for very long. Pacers fans, if you’re out there: now’s the time to support your team.

26. Charlotte Bobcats

Charlotte is about the same size as Indianapolis and overextended to the same extent, averages about as many fans per night as the Pacers, and charges about as much per ticket as the Pacers do. So it’s understandable that the Bobcats would be very close to the Pacers in these rankings. But given how poor the on-court product has been, Charlotte actually has a hope of showing some improvement; if only they could put together a winning team, perhaps the revenues would improve. Of course, given the organization’s track-record so far, this is may be too much to ask.

27. Atlanta Hawks

The Hawks have been wallowing in mediocrity for years. For five years the team has posted winning records. For five years, the deepest the team has gone into the playoffs has been the second round. The Hawks have actually lost ticket revenue every year for the last three seasons; they rank 5th from the bottom in attendance and 6th from the bottom in ticket prices. While the Eastern conference is pretty wide open after the Heat, if the team hasn’t shown revenue increases under these favourable conditions, it’s possible that they never will.

28. New Orleans Hornets

The Hornets rank second last in average attendance and third last in average ticket price. When you put those two pieces together, they rank dead last in nightly ticket revenue. The Hornets are very slightly saved by the fact that New Orleans is the 4th smallest NBA market, but only barely. If they can cut the dead weight from their roster and play their productive players more often, the soon-to-be Pelicans should improve on both the court and in the balance books.

29. Brooklyn Nets

The Nets are very interesting; in 2010-11 and 2011-12, the Nets had terrible ticket revenue numbers. As a matter of fact, likely due to the on-court product and the fact that the team was playing its last season in Newark, attendance actually fell between those two seasons. But this season is different:

  • the Nets acquired an additional big name player (Joe Johnson).
  • they are going to make the playoffs
  • they are playing in a brand new, $1 billion arena that is much closer to downtown New York.

Because of all this, the Nets have posted the largest jump in ticket revenues between this season and the last. And it’s such a big jump that the Nets have posted the second largest jump in ticket revenues over the last three seasons even though their revenues declined over the first two. The Nets are still only making about half of what we would expect given the size of their market, but at least they are on the right track.

30. Washington Wizards

A large market size and a tendency towards on-court ineptitude makes Washington place dead last on our list. They have turned things around a bit this year — the Wizards have the 5th largest ticket revenue increase between this season and the last — but they are still earning way below what we would expect. Luckily for the Wizards, the Eastern conference is pretty bad and the Wiz have actually put together a team that is pretty good (when healthy). It’s quite likely that they won’t finish last next season. Still, we should expect more from an NBA team based in Washington.

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
Toronto Raptors 204.81 840522 855608 -1.8%
Los Angeles Clippers 565.37 1212503 1274291 -4.8%
Sacramento Kings 86.94 585871 718738 -18.5%
Houston Rockets 281.84 753721 945056 -20.2%
Golden State Warriors 265.97 690005 926627 -25.5%
Memphis Grizzlies 50.61 487703 676551 -27.9%
Minnesota Timberwolves 154.48 569347 797165 -28.6%
Detroit Pistons 170.62 574589 815907 -29.6%
Philadelphia 76ers 281.52 653529 944684 -30.8%
Indiana Pacers 69.23 475407 698173 -31.9%
Charlotte Bobcats 69.22 451915 698161 -35.3%
Atlanta Hawks 208.11 519697 859440 -39.5%
New Orleans Hornets 52.48 405210 678723 -40.3%
Brooklyn Nets 1028.14 960519 1811659 -47.0%
Washington Wizards 323.54 519643 993478 -47.7%

- Devin

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