NBA players oppose All-Star Game, but the league knows there's a lot of money on the line

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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. These are just some of the players less than enthusiastic about playing an extra basketball game.

The National Basketball Association still wants to play the All-Star its 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 (HBCU) with Covid-19 relief and vaccine education. But some players are resisting the idea of holding the game during a pandemic.

James, the Los Angeles Lakers star, said he’d play but would only be there “physically” not mentally. He said the game is a “slap in the face” to players who thought the game wouldn’t occur this season. And Leonard, the Clippers star, suggested the NBA wants to play for revenue purposes but is making health risks to do so.

“It’s money on the line; it’s an opportunity to make more money,” Leonard told reporters last week via NBC Sports. “Just putting money over health right now, pretty much.”

Leonard could be correct on the NBA’s chance to earn money, especially as the league continues to miss 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 make-goods 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, the founder, and CEO of advertising metrics data firm EDO, of the All-Star game.

What’s in it for the NBA?

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 Turner Sports, the WarnerMedia-operated property.

Krim’s firm uses analytics that tracks brand and product searches when ads air, helping companies and networks determine an ads’ value during sporting events. The firm’s 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, who 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 the total reaches $24 million if a related broadcast, like the Slam Dunk competition, is included.

Quick-serve restaurants, insurance firms, wireless carriers, and automotive companies have all purchased slots for the game, according to EDO data.

Last year’s game included a format change which 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 (between the ages of 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, the 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

Engagement high 

Krizelman’s firm aggregates advertising data from marketers across a multitude of media channels, including TV and online. MediaRadar data shows companies spending around the NBA’s product is up after the first six weeks, he told CNBC.

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.”

And 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, there was an average total ad spend of $6.61 million per game for an average spend of about $70,000 per slot, he said.

The league also generates engagement via social media channels and says it reached one 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

But is it safe?

But again, the NBA will need to gain control of its messaging around holding the event – including fixing its own house.

Along with James and Leonard’s criticism, 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-19 and pulled him from the game for safety reasons. But the NBA received criticism from Durant for how it handled the episode

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’s 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 commencing a new season in December, too.

“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 told CNBC via 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-19 storm. And when discussing the National Football League’s Super Bowl safety plans with CNBC, Dr. Stephen Kissler, an epidemiologist at Harvard University, added air arena quality isn’t an 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-19 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.”

It appears the NBA has some science on its side. 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.”

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