UBS Report: NBA Decline Hurt Nike
UBS quietly admits what fans already know: basketball’s cultural power is ebbing — and Nike’s feeling the pain
On Monday, New York Times writer Sopan Deb posted the following take that widespread talk of NBA decline might just be an Internet myth. He said it in response to a Slow Boring attempt at fixing a league in crisis.
Our guy Spike Eskin pushed back, suggesting, as I believe, that markers of decline are not especially hard to find. As in, perhaps there’s a reason why this “consensus” exists, and the sports talk shows express concern about a league where nobody tries to win on the season’s final day.
Deb is sticking to his guns for now, replying to Spike:
If your only metrics are “Go outside” and “ratings,” that doesn’t strike me as someone having a good faith discussion.
Fair enough, but I would mention that, on the very same day as this exchange, a timely tidbit from the big UBS analysis of Nike’s stock collapse was posted by Lisa Scherzer of Front Office Sports. In its extensive research, the Swiss banking behemoth identified a problem for the once dominant apparel brand: NBA decline had adversely impacted Nike by proxy. As in, from the perspective of UBS, the NBA situation degraded to such a degree that it fueled the tanking of Nike’s brand, plausibly incinerating billions of dollars in the process.
I got my hands on the UBS report and will get into its contents, but first I’ll note how this is a good example of why the conversation about Silver’s league often gets confounded. The NBA has done quite well for itself financially concurrent with its waning in American culture. It was the best of times, it was the worst of times. Actually, perhaps in this case, the best of times informed the worst of times. Or, as Conor Sen of Bloomberg put it.
On some level I think the NBA’s problems stem from the league getting overpaid for media rights because streamers were desperate for content and agreed to uneconomic deals, which made the owners rich and reduced the financial pressure on them to improve the product.
So, the NBA is getting paid a lot by Nike and by the broadcasters. This speaks to the league’s strength. These entities aren’t exactly getting their money’s worth right now, though, which speaks to the NBA’s weakness.
I was personally shocked by the bluntness of the UBS assessment on Nike’s exposure to NBA problems: