A postcard, if you will, from the National Basketball Association to its retired superstar, Michael Jordan, as the league prepares for a second season without him. It's bound to be better than year one, which is surprising, since last year was one of the NBA's best years ever.
There had been doubts the NBA could rebound from Mr. Jordan's fast break from the game, especially so soon after the departures of Larry Bird and Magic Johnson. Indeed, the NBA saw its regular-season TV rating slip to a 4.3 last season from 4.6 in 1992-93, according to Nielsen Media Research. The graceful and oh so marketable athleticism that Mr. Jordan typified was replaced by an ugly physical style of play that turned off fans and even a few sponsors.
But the bottom line tells another story: The NBA is an entertainment brand that transcends its biggest star. Attendance hit a record 17.9 million in 1993-94. Licensed product sales swelled 14% to $2.85 billion.
NBC and Turner Network Television agreed to pay more than $1 billion combined to renew their TV rights deals for four more years. The deals that expired were valued at more than $700 million.
The league also renewed agreements with sponsors like Quaker Oats Co.'s Gatorade, Miller Brewing Co. and Warner-Lambert Co.'s Schick shaving products.
"The NBA really makes an effort to understand our business and strategic sales imperatives," said Jon Miller, NBC senior VP-programming and development. "They know as much about our business as we do."
"The NBA hasn't lost a step," said Miller's Dick Strup, who just moved to senior VP-international from senior VP-marketing.
Miller will hike spending on NBA media and promotion by 10% to $50 million this season. "It's our most valuable sports sponsorship," Mr. Strup said. "They generate creative marketing ideas. And they have David Stern."
Commissioner Stern earned applause from sponsors earlier this month by boldly promising that there won't be a work stoppage even if an agreement with players can't be reached by the start of the season Nov. 4. He also checked off on new rules aimed at cracking down on rough play.
"There were concerns among sponsors about [the surly style of play], and it was getting to the point where the NBA had to do something about it," said Bill Schmidt, Gatorade's director of sports marketing. "But we had the utmost faith in David Stern. And there were results."
The NBA chose not to renew exclusive sponsorship deals with American Airlines and Chrysler Corp. because the league wants to keep those categories open to marketers in other countries as it continues to aggressively develop foreign markets for NBA products.
A key marketing concern for the NBA this season is licensed products. For the first time, the league will distribute all-star game ballots through Foot Locker stores in the U.S., Canada and Mexico. Customers who vote will be presented with a variety of incentives to buy NBA-licensed items.
On Nov. 10, the NBA will launch an $8 million consumer campaign from Berlin Cameron Doyle, New York, that for the first time touts its entire line of licensed products in one integrated creative effort.