- The NBA is pressing to hold an All-Star Game despite pushback from top players.
- Advertising experts say the league's midseason event is a revenue generator for network partners because the contest has ratings appeal.
Kawhi Leonard #2 of the LA Clippers dunks the ball during the game against the Sacramento Kings on February 7, 2021 at STAPLES Center in Los Angeles, California.Adam Pantozzi | National Basketball Association | Getty Images
LeBron James, Giannis Antetokounmpo, Carmelo Anthony, and the usually reserved Kawhi Leonard are just some of the players less than enthusiastic about playing an extra basketball game.
The National Basketball Association wants to play the All-Star Game, which it has held since 1951, in Atlanta next month. The NBA released its voting results on Jan. 27 and said "discussions surrounding a potential NBA All-Star Game are ongoing."
And an added benefit: The NBA wants the game to help historically black colleges and universities with Covid relief and vaccine education. But some players are resisting the idea of holding the game during a pandemic.
James said he would play, but would be there only "physically," not mentally. The Los Angeles Lakers superstar said the game is a "slap in the face" to players who thought it wouldn't be held this season. Leonard suggested the NBA wants to play for revenue purposes but is taking health risks to do so.
"It's money on the line; it's an opportunity to make more money," the Clippers star told reporters last week via NBC Sports. "Just putting money over health right now, pretty much."
Leonard is likely correct on the NBA's desire to earn money, especially as the league misses out on 40 percent of revenue without fans. And playing the game will help media partners, too.
By holding the game, AT&T-owned WarnerMedia will save itself from potential recompense to marketers. That inventory may need to be placed with NCAA March Madness coverage, which costs the company money if the NBA's game is canceled.
"It's a good money maker for WarnerMedia," said Kevin Krim, founder and CEO of advertising metrics data firm EDO and a former CNBC executive.
Though the NBA All-Star weekend is huge for on-site sponsorship activations, with events throughout the hosting city, it's a ratings draw for WarnerMedia's Turner Sports.
Krim's firm uses analytics that tracks brand and product searches when ads air, helping companies and networks determine an ad's value during sporting events. Clients include NBA national TV partners Turner Sports and ESPN, Fox Sports and CNBC's parent company, NBCUniversal.
He estimated last year's All-Star Game generated around $15 million for TNT, which packed more than 160 advertisement spots in its broadcast. "For a single game, that's a lot of ads for a good price, and it's effective," said Krim, adding that the total reaches $24 million if a related broadcast, like the Slam Dunk competition, is included.
Quick-serve restaurants, insurance companies, wireless carriers and automotive companies have purchased slots for the game, according to EDO data.
Last year's game included a format change that honored Lakers great Kobe Bryant and assisted charitable organizations. It generated an average of 7.3 million viewers and reached 8 million viewers in the fourth quarter. And with the NBA's younger fanbase, companies get access to a Gen Z audience (ages 13 to 23) at a time when sports is limited.
"If you're a big brand and you want to reach a lot of people, especially a good audience that tends to be younger, and you want to sell a lot of stuff, NBA All-Star is a good place to be," Krim said of the league's post-Super Bowl audience.
Todd Krizelman, co-founder and CEO of advertising firm MediaRadar, said 151 brands spent roughly $8.25 million combined across media platforms for the game in 2020, up from 137 brands ($7.8 million) in 2019.
"From an individual game, the All-Star Game is very profitable," Krizelman said. "It's part of the business model that both the NBA and broadcasters depend on."
LeBron James #2 of Team LeBron celebrates after beating Team Giannis during the 69th NBA All-Star Game at the United Center on February 16, 2020 in Chicago, Illinois.Stacy Revere | Getty Images
Krizelman's firm aggregates advertising data from marketers across a multitude of media channels, including TV and online. He said MediaRadar data shows companies spending around the NBA's product is up after the first six weeks.
Usually, the NBA is projected to earn around $85 million after six weeks into play. But Krizelman said once final calculations are complete, that number could reach $120 million since the NBA's audience is up.
For its opening week in December, the NBA told CNBC, viewers watched 81.5 million hours of live NBA coverage. That's up from 41.8 million hours on ESPN and TNT during opening week in 2019.
"It's a popular place to put your marketing," Krizelman said. "This is where you want to be."
Marketers are getting a return on investment, too. The NBA audience is "twice as likely to engage with All-Star Game ads," according to Krim. Across the five 2020 NBA Christmas Day games on ABC and ESPN, total ad spending averaged $6.61 million per game and an average of about $70,000 per slot, he said.
The league also generates engagement via social media channels and says it reached 1 billion downloads for the 2020 game.
Added Krizelman: "It's not that you end up with a large audience. You end up with a committed audience. People are emotionally charged and in a receptive mood. That is one of the allures to advertising in the Oscars, the Super Bowl, NBA All-Star Game, and Finals," he added. "All of these major events, people show up to watch and some for the ads. It's part of the action and programming."
NBA Commissioner Adam Silver attends an NBA basketball game between the Dallas Mavericks and the Los Angeles Clippers during game two of the first round of the NBA playoffs at AdventHealth Arena at ESPN Wide World Of Sports Complex on August 19, 2020 in Lake Buena Vista, Florida.Ashley Landis | Getty Images
The NBA will need to gain control of its messaging around holding the event — including fixing its own house.
Along with criticism from James and Leonard, two of its biggest superstars, the league also received backlash from Brooklyn Nets forward Kevin Durant last week.
Durant was removed from a contest against the Toronto Raptors on Friday. The league claims Durant came in close contact with an individual who tested positive for Covid and pulled him from the game for safety reasons. Durant criticized the NBA for how it handled the situation.
The NBA has postponed over 20 games and endured outbreaks on teams including the Nets and Washington Wizards. Some wonder if holding a game with no real meaning is worth the risks.
From the NBA's standpoint, it has proved it can host a safe event with its Orlando bubble. And the league is used to internal criticism — not all players agreed with the Disney campus concept. Some players were unhappy about starting a new season in December.
"The NBA All-Star Game has been an important tradition throughout the history of the league and remains one of our top events for global fan interest and engagement," league spokesman Mike Bass said in an email. "The health and safety of everyone involved is at the forefront of our discussions with the Players Association."
The NBA intensified protocols following early setbacks, which it hopes will help calm its Covid storm. Dr. Stephen Kissler, an epidemiologist at Harvard University, told CNBC that arena air quality isn't a big issue for large indoor events like NBA games.
"A lot of those indoor arenas, because the volume of air is so high, in many causes the ventilation is good enough that it's almost like being in an outdoor setting as well," said Kissler, who researches at Harvard's Department of Immunology and Infectious Diseases.
Kissler used airline traveling as an example to describe the significant risks associated with spreading Covid when playing in indoor arenas.
"It seems like when you're traveling, the biggest risk is when you're standing in line for security," said Kissler. "I think that same principle holds true here, too. It's not when you're in the arena sitting as the biggest risk. It's the other places you may not think about where you might be in close contact with other people. And that's what people need to be mindful of."
The revenue and engagement data around its All-Star Game is there, too. Even the network partner will benefit, since Turner Sports is based in Atlanta.
Convincing top stars of the benefits remains the challenge.
"I don't think it hurts the brands if the All-Star Game was canceled for some reason," Krizelman said. "But they would miss it for sure. This is a popular event."
Disclosure: Kevin Krim is a former CNBC executive. CNBC's parent company, NBCUniversal, is a client of his advertising metrics data firm EDO.