NBA Teams Set to Miss Out on One Billion if there’s No Season

August 24, 2011

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sale ed helvetica, sans-serif;”>National Basketball Association teams would miss out on more than $1 billion in ticket revenue if a labor shutdown wipes out the 2011-12 season.

“Most all the dates would go unfilled,” former Portland Trail Blazers President Steve Patterson wrote in an e-mail.

The NBA’s 30 teams generated more than $1.1 billion in gate receipts during the 2010-11 campaign, according to the annual postseason audit conducted by the league and the players’ union. That probably would rise due to customary ticket-price increases if players and owners reach a labor agreement in time to prevent lost games this season. The New York Kicks, for example, said in March they were raising prices by an average of 49 percent amid an $850 million renovation of Madison Square Garden.

Bob Gutkowski, former president at Madison Square Gardens Inc (MSG), home of the Knicks and Rangers, said the basketball team generates at least $1 million in ticket revenue per game. That’s about $45 million over the course of a season for the Knicks, excluding playoff games and the team’s effect on MSG Network advertising.

“Every night there is a good amount of revenue that isn’t going to come through,” Gutkowski, a partner in the New York- based sports consulting firm Innovative Strategic Management, said in an interview. “And most of it isn’t going to be replaced.”

The NBA locked out players on July 1, saying the league’s financial system needs to be overhauled to stem $300 million in annual losses. Management and labor disagree on how to share more than $4 billion in annual revenue, and when union Executive Director Billy Hunterwas asked whether the season would take place, he answered, “If I had to bet on it, no.”

Stuck in the middle are arena operators who have blacked- out exhibition, regular-season and playoff dates for their NBA tenants. Because securing big-name talent like Lady Gaga and Jay-Z requires so much lead time, it would be “impossible” to replace each team’s 40-plus basketball dates with other events, said John Wentzell, president of TD Garden in Boston, home of basketball’s Celtics and hockey’s Bruins, who own the building.