Premier Markets and Their Impact on Branding
Sometimes you don’t have to have the best record to be the most valuable sports team.
At $4.6 billion, the New York Knicks are the most valuable NBA franchise for the fifth straight year, according to Forbes estimations. Yet, ironically, the Knicks have not won a championship title since 1973. After seven straight losing seasons and a decrease in attendance over the past several years, how is the Knicks franchise so valuable?
While the franchise’s business prowess clearly does not translate to success on the court, it is no coincidence that this NBA team is considered a premier market. Madison Square Garden is an extremely lucrative venue; it is valued at $828 million and accounts for 23% of the Knicks value, according to Forbes. The team is still profiting off of the $1 billion renovation that the stadium underwent in 2013, which opened up new opportunities for sponsorship and suite membership. New York is also the U.S’ richest sports market, which helps build local revenue for the franchise. The Knicks also make a significant amount of money from TV contracts, which is a form of fixed revenue that is not depicted by wins.
Market size does not drive wins, and wins don’t drive market size. However, market size and being a premier market arguably does play a role in an athlete’s personal branding. This is demonstrated in the team’s newest draft pick, Obi Toppin. Within 24 hours of being drafted, Toppin’s social media following grew over 40%, increasing his personal branding power and influence.
As a new roster of rookies enters the NBA following the 2020 Draft, it is important to keep in mind that an athlete’s personal brand and marketability is not just driven by success on the court, but also by the market they play in.
