NBA gets its groove back

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The National Basketball Association is hot again.

After watching its popularity, ratings and sponsorship wane the last several seasons, the NBA is roaring back, thanks to a gutsy TV rights decision by its commissioner, a 7-foot-5 rookie who hails from an untapped market of 1.3 billion and a retro blast from its past.

Hot players like rookie Yao Ming from China helped the sport's All-Star Game Feb. 16 post the highest ratings for a basketball game in cable history. NBA merchandise sales are on the rise. And the league this year signed on seven new sponsors.

`great storylines'

"Right now, the NBA has great storylines again," said David Schwab, director of strategic marketing and media for Octagon, the sports marketing arm of the Interpublic Group of Cos.

Basketball Commissioner David Stern, now in his 19th year leading the NBA, gambled last year to put more games than ever on cable TV when the league struck a six-year, $4.6 billion rights deal with AOL Time Warner's TNT and Walt Disney Corp.'s ABC and ESPN. Initially, when the NBA moved its games to cable from General Electric Co.'s high-profile NBC, analysts and experts questioned the move. But what Mr. Stern gave up in a larger audience on network TV he gained in programming and exposure-not to mention an extra $166 million a year in combined rights fees from the three networks.

The decision appears to be paying off. The Feb. 9 All-Star Game, held in prime time on cable's TNT, drew an 8.2 rating, the most-watched basketball game in the history of cable. NBC posted a 10.6 share for the All-Star Game in its 12th and final season of televising the NBA.

big draw

A Feb. 18 game between the Los Angeles Lakers and Houston Rockets, featuring Yao Ming, drew a 2.3 rating, the highest regular-season game on cable in four years.

"Over the years, the one thing we have been focused on is the viewership of the three [major] networks rather than the 300 networks that now exist," said Mr. Stern. "What we learned is that our fans say, `I'm going to spend this much time on this given night in front of the television set.' So we wanted to have our programming more available to those fans."

With players like Mr. Yao-who in his freshman NBA year has endorsed Visa International, Apple Computer Co. and, in March, PepsiCo's Gatorade-the league has been able to weather the retirement of its greatest player Michael Jordan, who will step away for a third (and presumably last) time at this season's end .

Sales of NBA merchandise at the All-Star game the weekend of Feb. 7-9 increased 30% from what sold during the All-Star game weekend last year-an impressive figure considering the game was held in Atlanta, one of the league's worst markets in terms of fan attendance.

Sponsorship is at an all-time high as well. The NBA sponsors this season include Southwest Airlines, MBNA and Verizon Wireless, lifting its total to 20.

"One of the most interesting things about the NBA is that it reaches a more diverse market than some of the other big sports," said a chief operating officer of an NBA sponsor. "The WNBA helps drive a female audience to the NBA. They are able to market globally with the big number of international players. They market to the Hispanic community. And the African-American community has always been its bellwether. Just look at the retro jerseys."

Retro style

While the National Football League was first with video games and Major League Baseball has its bobblehead dolls, the NBA has embraced retro jerseys by starting a Hardwood Classics program, in which teams have played games this season wearing jerseys from decades ago.

"This started with Hollywood and hip-hop," Mr. Schwab said. "All of a sudden it's cool, and you have to credit the NBA for reaching people whom I call `influencers,' people who are going to have an influence on what kids wear."

"That's David," said exec VP of NBA Entertainment Gregg Winik, crediting Mr. Stern. "David is always saying, `What can we do with MTV, what can we do with Nickelodeon?' He's really been out front on a lot of this in trying to reach a younger audience."

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