How does the NBA financial model promote economic sustainability among the franchises?
Doray, Solal; Tartas, Noe (2025)
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2025060621106
https://urn.fi/URN:NBN:fi:amk-2025060621106
Tiivistelmä
This thesis analyzes the National Basketball Association's (NBA) financial structure to see how it allows for economic sustainability for franchises of various market sizes. Using institutional and economic sustainability theory as a starting point, the thesis investigates the league's means of revenue sharing, salary cap, and collective bargaining agreements and examines how they allow franchises to protect their competitive parity while remaining economically viable in a commercial-driven sports league.
The thesis employs a qualitative case study method using financial data, secondary literature, and data from the key informant interviews. The New York Knicks, Chicago Bulls, Utah Jazz, and Memphis Grizzlies are compared in relation to their market size, and how (or if) they applied different financial tools from the league to ensure long-term performance and profitability.
The thesis concludes that the NBA's localized financial structure led to a model of centralised revenue collection supported by redistribution policies that reflects a fluid and cooperative environment. The local franchises not only remained viable -but were able to prosper- in a commercial or business environment regardless of the scale of their local market. The NBA's financial structure reached a managed equilibrium between autonomy and regulation to enhance economic sustainability and performance, which can provide ways forward for sustainable economic design in other professional sports leagues.
The thesis employs a qualitative case study method using financial data, secondary literature, and data from the key informant interviews. The New York Knicks, Chicago Bulls, Utah Jazz, and Memphis Grizzlies are compared in relation to their market size, and how (or if) they applied different financial tools from the league to ensure long-term performance and profitability.
The thesis concludes that the NBA's localized financial structure led to a model of centralised revenue collection supported by redistribution policies that reflects a fluid and cooperative environment. The local franchises not only remained viable -but were able to prosper- in a commercial or business environment regardless of the scale of their local market. The NBA's financial structure reached a managed equilibrium between autonomy and regulation to enhance economic sustainability and performance, which can provide ways forward for sustainable economic design in other professional sports leagues.