The NBA's New Multi-Million-Dollar Tournament

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Hey Friends,

Despite COVID-19 providing fans with more time at home than ever before, the National Basketball Association (NBA) saw its average regular-season viewership fall to pre-2017 levels last year.

Avg. National NBA Game Viewership (ABC/ESPN/TNT)

• 2017-18: 1.89 million

• 2018-19: 1.79 million

• 2019-20: 1.62 million

• 2020-21: 1.34 million

There are a lot of factors that go into this — a long regular season, star players being injured, most sports saw a decline during COVID, and more — but the point still stands; few regular-season NBA games seem to carry much weight on a national stage outside of Christmas Day and the occasional superstar matchup.

So the NBA is looking to change that, with Shams Charania reporting yesterday that the league is currently discussing an in-season tournament for future seasons, with $1 million in prize money per player.

This is interesting, but it’s not exactly a new concept. When you’re a multi-billion-dollar organization like the NBA, you tend to test, gather data, and iterate based on feedback before implementing such drastic changes. So that’s exactly what they did — they looked at the WNBA.

Earlier this year, the Women's National Basketball Association (WNBA) announced the “Commissioner’s Cup,” a brand new midseason tournament designed with the same goals in mind — raise competitiveness during the regular season and attract increased viewership.

Here’s how it worked: Ten early-season games for each WNBA team acted as “group play,” and teams with the best record advanced to the mid-season tournament.

• The total tournament prize pool is $500,000

• The tournament’s winning team gets $30,000 per player

• The tournament’s runner-up gets $10,000 per player

• The MVP of the Commissioner’s Cup gets $5,000

The Seattle Storm ended up winning the inaugural Commissioner’s Cup — Breanna Stewart won the $5,000 MVP award — and by all accounts, the event was a great success.

The $30,000 may not seem that significant for a professional athlete. However, in a league where max salaries are still in the low six figures, and many young players make between $60,000 to $70,000 annually, it provided enough incentive for players to ratchet up competitiveness in the regular season.

“Our teammates (were) the motivating factor behind this game,” Breanna Stewart said. “We wanted to win for them. Obviously, $30K is $30K for all of us, but for some of them, it’s, I don’t even know what the ratio is for Kiana (Williams), but it’s a lot. To really help them get that is amazing.”

For context, Kiana Williams made about $35,000 through various short-term contracts last season, meaning the $30,000 bonus increased her annual pay by nearly 100%. That’s obviously significant.

Now, the NBA is looking to replicate that success. Their tournament would follow a similar format — early regular-season games are used for tournament seeding — but the prizes money would be significantly higher, with players on the winning team reportedly set to receive $1 million each.

The real question is if $1 million is enough money to entice the world’s best players to participate.

Here’s how I think about it — superstar players like Stephen Curry, James Harden, and LeBron James make $40 million-plus annually, or about $500k per regular-season game, but the median NBA salary is a much more modest $2.96 million.

NBA Salaries (2019-20 season)

• Average Salary: $7 million

• Median Salary: $2.96 million

That means that a median-salaried player on the winning team would increase his annual pay by more than 30%. Again, that’s obviously significant.

I originally thought that the NBA Players Association might try to fight this — they typically want fewer games, not more, especially after COVID-19 cut the offseason in half — but the additional money might be an enticing factor to get this deal done.

After all, the players association represents all players, not just the highest-paid ones.

There is also evidence that this could help viewership numbers. For example, the Basketball Tournament, an annual open-application, single-elimination tournament with a $1 million winner-take-all prize, has become a staple on ESPN broadcasts and a favorite among basketball fans globally.

But the key will always be getting buy-in from the league’s top players.

The fans don’t want another glorified all-star game where players barely take it seriously, but rather, a live, action-dense, high-stakes competition where the best players in the world bring playoff-intensity months in advance while fighting for millions of dollars in cash. Now that would be fun.

Have a great day, and I’ll talk to everyone tomorrow.

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Huddle Up is a daily newsletter that breaks down the business and money behind sports.

If you would like to join more than 47,000 other professional athletes, business executives, and casual sports fans that receive it directly in their inbox each morning, subscribe now.

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