The Study On Profit Model Of NBA

As China's economy and the third industry continues to develop, professional sports industry is bound to have great development. Through the study on profits and revenue distribution of NBA, then provide theoretical suggestions for China's professional sports leagues.In this dissertation, the research objects are Profits and Revenue Distribution of NBA, team, and the players. The research methods were the use of literature, survey, mathematical statistics, case studies, logical analysis and other. The main conclusions are as follows:1. The main source of NBA league's revenue include:the National TV rights sale, the local governments'public funding, advertising and sponsorship revenue, licensed products franchise, and joining fees of new members.2. Monopoly and the management are important factors affecting their profitability.3. The team average revenue increased by 200% over the past decade. The revenue gap between the different teams as the result of team management in following items:tickets for home games, local television rights sale, the operations of facilities (naming rights, advertising, parking, rental, etc.), team sponsorship, the sales of team licensed products and souvenirs, and players salaries. The operating incomes, which reflect the profits of the team, has no significant increase because of increased expenditure, or the owner will be profit-shifting to other places, so take the initiative in labor negotiations or to gain more public support.4. Team profit factors are:market size, the teams'winning rates in the regular season, the status of teams'star players, the team's management. The correlation coefficient between Market size and NBA teams revenues of ten years is 0.533, five-year revenue is 0.473; the correlation coefficient between the teams'ten years revenues and regular season winning rates is 0.486, and the correlation coefficient of five years is 0.666; NBA competitive balance worse than other North American professional sports leagues, so the league use star to attract fans to get the benefits; Bulls as a positive example of the outstanding representative and the New York Knicks to a negative example for the interpretation of the importance of good management in order to enable the team to get more profit; the other North American professional team in the same city will not have an impact on NBA teams profitability.5. Team player salaries accounted for about 60% of total revenue, which in the past two decades to maintain rapid growth. The players'average salaries grow from $0.33 million in the 1984-85 Season to $4.919 million in the 2008-09 Season. The salaries difference and endorsement incomes lead to the gap. The endorsements income of league's top players is more than salary income.6. The market dominance have transferred from the owners to players with the change from reserve clause system to free agency system. The players association makes the players together to form a labor union in response to the team owners'monopoly.7. NBA make revenues distribution among clubs in the items of the National TV rights sale, advertising and sponsorship revenue, licensed products. To a certain extent, the league reach a revenue sharing between the team when the high-income franchises subsidy low-income one. Thus, NBA has the competitive balance. League, as the owner representatives limit players'salaries, to ensure that benefits owners. Playoff bonus system improved the quality of the game objective.