NBA Lockout Could Create Backlash, But Advertising Will Survive

According to the Wall Street Journal, the NBA renewed its long-term advertising partnerships with Anheuser-Busch InBev (NYSE:BUD), Gatorade (NYSE:PEP) and AutoTrader.com.

The partners expressed no hesitation at their renewals. AutoTrader will continue as a partner with TNT (NYSE:TWC) and NBA TV’s pregame coverage. Anheuser-Busch plans to create NBA-themed advertising and present fan events during the year.

However, you can’t deny some backlash concerns from the lockout.

Clark Wood, Chief Marketing Officer for AutoTrader.com, said “fan sentiment is the unknown following the lockout. A concern was that the average Joe was going to get frustrated with billionaires and millionaires fighting over money, but it looks to me it got solved in a very amicable way…I haven’t seen anything that tells me fans are irritated, and we’re hoping it doesn’t develop.”

Brad Brown, Anheuser-Busch’s (NYSE:BUD) senior director of sports and entertainment marketing, was also optimistic, noting that the new labor agreement gives teams “long-term stability” and for advertisers, a better position.

Marketers Needed

With the abbreviated NBA season quickly approaching its opening day on Christmas, the league now needs to also gather marketers.

According to Mark Tatum, the NBA’s executive vp of global marketing partnerships, “Clearly, as a result of the schedule there just wasn’t much NBA inventory in the fourth quarter. That inventory went away, but the demand for NBA advertising, from talking to our TV partners, is incredible — people want to be in those Christmas Day games.”

The NBA doesn’t lack an audience but it could face short-term challenges with ad sales. Timing is not good.

One ad buyer told the Wall Street Journal that the fourth quarter is historically slow and many large NBA advertisers have already spent ad dollars elsewhere for the quarter.

Another ad buyer has said they wouldn’t pay full price for the NBA ad time.

While in the short-term, NBA ad sales may pose challenges, the league should recover because of the sport’s attractiveness to advertisers.

By bringing good ratings and a desire by consumers to watch sports live, the NBA is high on TV’s list to buy ad sales. The NBA is especially attractive for advertisers because it can connect with the usually difficult audience of young men.

Just how big is NBA advertising?

In 2010, American companies spent $807.2 million on ads during games on the television networks, ESPN (NYSE:DIS) and TNT (NYSE:TWC), according to the Journal.

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