The NBA After Jordan: Is There Hope?

The end of the 2004 NBA playoffs marks the first season since Michael Jordan retired for the third time. After each previous retirement, the NBA's ratings and fan interest began to drop... only to rise again when Jordan laced up his sneakers and returned to the sport.

But since the chance of another comeback is virtually zero, how much is the NBA struggling without him? While not in danger of becoming extinct, the league has underestimated what Michael Jordan means to the game of basketball since his first retirement in 1993.

Check out the mistakes the NBA has made and where it might cost them financially.

poor marketing

It might sound absurd to criticize the NBA's marketing campaign given their global expansion, but what originally sparked that global interest was Michael Jordan. And the NBA's marketing strategy since 1993 has unsuccessfully relied on finding "The New Jordan."

Rather than promote the game in general, they are still searching for that marquee name to plug into the game of the week. The NBA tried Grant Hill and Penny Hardaway. Then Jordan returned. It tried North Carolina alums -- Jerry Stackhouse, Vince Carter, and Antawn Jamison. Then Jordan returned. Now it's Carmelo Anthony and LeBron James. David Stern and company are still trying to replace the irreplaceable.

The numbers don't lie. The 1993 NBA Finals with Jordan's Bulls broke a ratings record and averaged a 17.9 -- with each point representing roughly one million households. Jordan retired and the ratings dropped to 12.4 in 1994, and 13.9 in 1995. Jordan came back and they reached a new high of 18.7 in 1998. And with Jordan out of the NBA or out of the playoffs, they plummeted again to a 10.2 in 2002, and a 6.5 in 2003.

Merchandise sales shows the same pattern. The top-selling jerseys in 2003 found an aging Michael Jordan still holding 4th place, well ahead of Carter, who had fallen to 20th on the list. And Jordan's Wizards, a bad team that couldn't even make the playoffs, were 6th in team merchandise sales.

The NBA is now hyping the fact that its estimated merchandising revenues will be around $3.3 billion US in gross sales for 2004, compared to only $1.2 billion in 2000. But much of that growth is due to Jordan and other retro jerseys (which now account for roughly 15% of sales) and LeBron, whose number 23 sold more than 1.5 million jerseys.

faulty business model

In the 1980s and 1990s, the NBA was the fastest growing league. The average franchise value jumped from $15 million to $300 million, and revenue increased from $10 million to more than $3 billion. TV revenue alone skyrocketed from $19 million in 1980, to around $765 million for 2004.

Unfortunately for the NBA, the league misunderstood this tremendous growth. The swell in ratings and revenue was due to Jordan... not the game of basketball.

Golf is experiencing a similar situation with Tiger Woods, whose appeal transcends the sport itself. Golf's recent growth across all demographics is due to Tiger. And if he leaves... so will many of the new fans.

The league needs to be prepared for a drop in growth as the sport adjusts to its average fan base without Michael Jordan. Overseas broadcasts increased from just 35 per week to 175 foreign broadcasts in 40 languages during the Jordan era.

And Fortune magazine estimated in 1998 that Jordan alone was responsible for $10 billion in increased ticket sales, ad revenue, and merchandising profits between 1984 and 1998. Those numbers will be hard, if not impossible, to replicate.