The NBA's Pricing Problem Doesn't Exist

Or, alternatively, the pricing problem is only a problem for fans

This past week, a lot of the media put out a headline that ruffled a few feathers. As ESPN reported:

Seeing that headline, anyone would feel a little bit squeamish. Embracing tanking? What in the world?

The original post from Mark Cuban was far more innocuous prior to its aggregation. In essence, the former Mavs majority owner made the case that the real problem the NBA has right now is not tanking, but is instead the “Affordability and quality of game presentation.” Namely, he’s referring to tickets:

Mark Cuban@mcuban

Why the NBA should embrace tanking - The NBA has kate been misguided thinking that fans want to see their teams compete every night with a chance to win. It’s never been that way that way. When I got into the nba, they thought they were in the basketball business. They

3:04 PM · Feb 17, 2026 · 2.13M Views

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1.84K Replies · 1.23K Reposts · 12K Likes

Up front, I’ll go out on a limb and say this: Cuban is right, because the majority of attendees — those that are trying to have a good time with their family — are not as offended by tanking as they are by the inability to even watch the basketball game in the first place. I think tanking is a bit more problematic for the fans than Cuban believes in his tweet, but not by all that much.

However, Cuban’s musings on the matter led me down a rabbit hole, leading to a certain discovery:

The NBA’s pricing problem isn’t one at all.

Allow me to explain.

Detachment of Reality

Everyone knows the NBA makes a lot of money; I don’t need to tell you that. The ways in which the NBA makes money, however, have shifted a bit over time, though it’s held to a certain pattern throughout the years.

Before we dive into an actual breakdown, let’s remember the building blocks of what they teach you in economics classes, without being too boring. You have supply, and then you have demand; two separate forces that are supposed to dance together in a way that determines the price of a product.

For a typical product, as supply outstrips demand, the price should go down. On the contrary, if demand begins to surge ahead of supply, the price will go up due to a shortage. There are a lot more ways in which that equilibrium can change (and there are exceptions, as we’ll get into), but that’s the basic structure of it.

So now let’s talk about the NBA as a product, because it increasingly does not adhere to the above rules.

In the 2024-25 season, this is how the NBA’s revenues were split up:

Immediately, two things should stand out to you:

1. National media rights deals take up the largest piece of the pie, and when combined with local media rights, it’s over 50%

2. Gate/Ticketing revenues are a close second, but under 25%

Now, you may assume that 22% is a big chunk of the NBA’s revenues. While you’d be correct in your assumption, there’s a caveat. 22% is a significant number for any business, but it’s actually over 25% lower (relative, not empirically) than the mark set by the league in 2010:

The fact that ticket sales continue to decrease as a share of total league revenues should be the first red flag to anyone who wants the league to change the pricing of its tickets to make them more affordable. After all, if your league is driven less and less by ticket sales, you can then price them at whatever you want, simply because the demand is still there.

That’s the crux of the point: The NBA’s ticketing revenues have largely become detached from the reality that the league makes boatloads of cash:

There is no incentive here for the NBA to change its ticketing strategy, because the current one:

1. Is not negatively affecting revenue shifts year-over-year

2. Is allowing them to sell to a higher-end market that is more likely to purchase merchandise

The above chart ends at the 2024-25 season, and that’s by necessity. However, with the league’s new media deal, expect the revenues to spike even further, all the while the ticketing revenues, as a percentage of the bigger pie, stay, at best, the same.

A better way to look at this would be to make an index for it. A lot of stock market investors look at the so-called Fear and Greed Index to see where the market stands emotionally, using a variety of factors that I won’t get into here. Below, I’ve put together a graph showcasing a “Detachment Index,” which shows how much league revenues have grown over time relative to how much ticket sales and attendance levels have changed, since 2010. Immediately, you’ll see that the NBA is at levels of financial detachment we’ve never seen:

The above chart, once again, fails to recognize the fact that this year’s non-ticket and fan revenues will spike due to the new media rights deal. The new deal is triple the worth of the previous one, despite viewership seeing no increase over the past 7 or 8 years:

So why would NBC, Amazon, and ESPN pay 2.6 times the money for NBA media rights now, when viewership is down? This is where things get wonky and the NBA has a weird supply and demand scenario. Though the “supply” of NBA games has not gone down since the previous media rights deal, the signees of the deal treat it as an increasingly scarce asset, driving the price up.

The scarcity is not about getting the NBA television rights, but is more about keeping others from getting it. You don’t want people to perceive you as cheap, as fans did when Warner Brothers (owner of TNT) refused to make a competitive bid for the NBA’s rights deal. You want to stay in the public eye and have a good reputation, and the NBA is a reputation business. As rightsholders compete for perception, they will drive up the premium, thereby driving up the price with each consecutive media deal, regardless of true viewership.

What’s The Problem?

You should now realize that the NBA has very little incentive to change its current ticketing strategy, due to these two factors:

1. Ticketing revenues make up a continually decreasing share of total league revenues

2. Media rights deals drive the majority of the revenue despite declining viewership

There is one more factor that we haven’t talked about yet: The teams’ operating income is detached from how they price their tickets, too.

For reference, here are the average prices of each team’s tickets from 2024 (the most recent data we have) compared to their operating income, which is the team’s earnings before interest or taxes:

I know the above is a pretty big table, but here’s the primary takeaway: The correlation between ticket prices and operating income is 0.05, which is so small that we may as well call it irrelevant. In other words, the teams that are pricing their tickets cheaper aren’t consistently making more or less money than the teams — the Lakers and Celtics — who are pricing tickets well past $500 a piece on average. That may be a result of certain teams being more business savvy, but it’s clear that your ticket prices don’t clearly determine your profitability, which means you have no reason to change your current strategy.

So allow us to return to Mark Cuban’s original statement:

“The nba should worry more about fan experience than tanking. It should worry more about pricing fans out of games than tanking.

You know who cares the least about tanking, a parent who cant afford to bring their 3 kids to a game and buy their kids a jersey of their fave player

Tanking isn’t the issue. Affordability and quality of game presentation are.”

While it may be true that stadium occupancy is down compared to the previous decade — see the chart below — we’ve already established that the perceived dip in quality of game presentation has not affected revenues:

Cuban is right about multiple things here:

1. Tanking generally allows teams to get better in the long term, with some exceptions

2. Affordability is a problem for the average fan

3. Parents who bring their kids to the game likely do not care much about tanking on a game-by-game basis

In a world of aligned incentives, the NBA’s pricing out of the average fan would hit their pocketbook, resulting in a change to how tickets are priced. However, the NBA’s incentives are far from aligned, as we’ve established. It is equally true that in a world of aligned incentives, tanking would not be worth it, and I wish that were the case because, unlike what is said in Cuban’s tweet, I do not think that tanking is universally good for the NBA. But, again, the incentives are not aligned with fan interest here, nor are they aligned with overall team profits. Cuban is right ethically from a fandom perspective, and it’s unfortunate that it doesn’t really matter.

The NBA does indeed have a pricing problem, but it’s only a problem for you and me. It’s not a problem for the league in the slightest, and unless something massive shifts this season in terms of attendance, that will continue to be the case. Media rights deals will prop up the league’s financials, and the only time the league will have to worry about that changing will be when the current deal expires after the 2035-36 season.

You can pin the blame on any one party here and make a good case. It’s the media rightsholders for spending so much money on a product with declining viewership; it’s the NBA for incentivizing teams to price tickets however they want; it’s the wealthier fans for continuing to spend money on these highly-priced tickets. In reality, it’s an imperfect storm without a real solution. It’s worth wondering what would happen if all the teams priced their tickets at a low level, since there is so little correlation between ticket prices and operating income.

Alas, I doubt many teams would do that. The incentive isn’t there.