Lesa Ukman, editor of The IEG Sponsorship Report, said the league's decision last week to cancel the first two weeks of its 1998-99 season already has done irreparable damage to what arguably has been the best-marketed brand in pro sports.
`SHOT TO HELL'
"For sponsors, the NBA and Nascar have had this mystique that they are immune to these problems, that they overdeliver and have great fan loyalty," Ms. Ukman said. "For the NBA, this has been called into question. Sponsors pay a premium for those intangibles, and they've been shot to hell. I expect that in the future, sponsors won't renew at the same levels as before."
With owners and players unable to agree on a new collective bargaining agreement, the NBA is expected to cancel another two weeks of the season. The decision to cancel games has drawn comparisons to the 1994 Major League Baseball strike, which inflicted wounds on the sport's image that healed only this year.
One way for the NBA to bounce back more quickly is to keep the fight clean and avoid damaging the image of players, observers said. Perhaps more than any other league, the NBA relies on its superstars to keep its brand vital.
"The owners have to win the battle, but at the same time they can't in any way make the players look bad or put a negative spin on them because the players are their livelihood. They are the NBA's image," said Dean Bonham, president of Denver-based sports marketing company Bonham Group. "Once this thing is over, the league has to turn around and market the players as heroes."
Players have been staging charity exhibition games during the labor struggle and working to present their side of the story to fans.
Sponsors so far have been unanimous in saying the lockout won't weaken their long-term faith in the NBA. But, as one sports-marketing executive noted, "What else are they going to say?"
In the short-term, sponsors and marketing partners are scrambling. Both AT&T Corp. and Sony Consumer Electronics are rethinking planned fourth-quarter NBA retail promotions, for example.
"In the long term, this is a blip," said Mark Dowley, managing director of Momentum IMC, New York. "In the short term, it will affect media and promotional plans. I expect those sponsors to reinvest those dollars in [the National Football League] and [National Hockey League]."
On the media front, Turner Network Television and TBS Superstation will replace NBA telecasts with movies; network executives wouldn't comment on how they will handle ad sales for the replacement programming.
Turner must continue to pay a rights fee to the NBA, but some of that money will be refunded either directly or through sharing of ad revenue over the life of the contract.
SPRITE KICKS OFF PROMO
Coca-Cola Co. is going forward this week with a six-month consumer promotion for its Sprite brand, backed by TV spots starring NBA players Grant Hill and Kobe Bryant. The accidentally topical theme of the under-the-cap sweepstakes: "Salary cap."
"Our marketing partners are telling us this doesn't affect their long-term commitment to us," said Rick Welts, president of NBA Properties. But "we've learned firsthand from the unfortunate situations of our brethren sports leagues what situations like this can do. We're highly motivated to bring this to a conclusion."
Once in recovery mode, the NBA can count on Nike, Adidas, Reebok International and Fila USA to spend aggressively against basketball, the athletic footwear industry's biggest category.
But the NBA might lose its biggest marketing weapon of all-Michael Jordan, who has yet to announce whether or not he will retire.
"Given that Jordan may not be back, it would have been best if this labor mess happened two years ago," said Ms. Ukman.