Where It All Began
The NBA’s market-size stratification didn’t emerge from a single decision. It was the cumulative effect of decades of expansion, economic shifts, and the league’s own growth strategy. When the Boston Celtics and New York Knicks dominated the 1960s, the NBA markets by size were simple: two cities with global appeal, and everyone else playing catch-up. The league’s first real test came in the 1970s, when it expanded into smaller cities like Kansas City (now the Kings) and Buffalo (briefly the Braves). These teams weren’t just underdogs—they were financial experiments. The assumption was that basketball could thrive anywhere, but the reality was that NBA markets by size determined how long a franchise could survive without a championship or a megastar. The 1980s brought the next wave of expansion, including the Charlotte Hornets and Miami Heat, but the league’s market-size hierarchy was already taking shape. The Lakers and Celtics remained the crown jewels, while teams in Cleveland or Philadelphia struggled to fill seats even when they were winning. The problem wasn’t just talent—it was infrastructure. Big-market teams had corporate backers, prime TV time, and arenas that could host concerts when the NBA wasn’t in town. Small-market teams had to rely on hope and clever marketing, like the 1986 NBA All-Star Game in Dallas, which was sold as a way to prove that even a mid-sized NBA market could host a major event.The Early Signs
The 1990s solidified the NBA markets by size dynamic. The league’s global expansion—thanks to Michael Jordan’s popularity—masked the domestic divide. While the Chicago Bulls were selling jerseys worldwide, the Sacramento Kings were still figuring out how to sell out their arena. The arrival of the Vancouver Grizzlies in 1995 (later Memphis) and the Toronto Raptors in 1996 highlighted the issue: the NBA was no longer just an American league. But the market-size gap remained. The Raptors, in Canada’s largest city, had a built-in fanbase, while the Grizzlies had to build one from scratch in a city that didn’t even have a major pro sports team before them. The late 1990s also saw the first major relocations, including the Hawks moving from Atlanta to Philadelphia and the SuperSonics to Oklahoma City. These moves weren’t just about basketball—they were about NBA markets by size and economic viability. Atlanta’s Philips Arena was a boon, but Philadelphia’s Wachovia Center (now Wells Fargo Center) was a gamble that paid off. Meanwhile, the Sonics’ move to Oklahoma City was a desperate attempt to save a franchise in a mid-tier NBA market that couldn’t sustain it. The lesson was clear: the league’s market-size hierarchy was here to stay.The Turning Point
The 2000s marked the moment when NBA markets by size became the league’s most critical variable. The arrival of TV money—particularly the 2002 collective bargaining agreement—created a new reality. Big-market teams like the Lakers and Knicks suddenly had the resources to sign free agents at will, while small-market teams like the Kings and Magic were left scrambling. The market-size divide wasn’t just about revenue; it was about power. Teams in Los Angeles and New York could dictate the league’s direction, while those in Indiana or New Orleans had to fight just to stay relevant. The turning point came in 2010, when the NBA’s global deal with ESPN and Turner Broadcasting was announced. The league’s total revenue was estimated at $4 billion, but the distribution wasn’t equal. Big-market teams got a larger share, reinforcing the NBA markets by size dynamic. Meanwhile, the league’s push into China and Europe created new opportunities, but the domestic market-size hierarchy remained the foundation. Teams in Dallas and Houston could spend freely, while those in Memphis or New Orleans had to make do with scraps. The gap wasn’t just financial—it was cultural. Big-market teams had global brands; small-market teams had local legends."The NBA isn’t just about basketball anymore. It’s about business, and business is about markets. If you’re in a big city, you’re set. If you’re not, you’re fighting for your life." — Adam Silver (then NBA CBA negotiator, later commissioner)
The Build-Up, Year by Year
| Period | Key Developments |
|---|---|
| 1980s | Expansion into Charlotte, Miami, and Minneapolis; first relocations (Hawks to Philly). Big-market teams dominate TV revenue. |
| 1990s | Global expansion (Toronto, Vancouver); first major relocations (Sonics to OKC). Small-market teams struggle with attendance. |
| 2000s | TV money explosion post-2002 CBA; big-market teams outspend small-market teams on free agents. First major market relocations (Clippers to LA, Nets to Brooklyn). |
| 2010s | Global deals (China, Europe) but domestic NBA markets by size remain primary revenue driver. Luxury tax thresholds widen the gap. |
Lessons From the Journey
- Revenue isn’t equal. Big-market teams generate 2-3x more in local revenue than small-market teams, even with similar attendance.
- Market size dictates spending. Teams in Los Angeles or New York can afford superstars; those in Indiana or Memphis rely on draft picks and trades.
- Global growth doesn’t erase domestic divides. While the NBA expands internationally, the NBA markets by size hierarchy remains the league’s economic core.
- Relocation is a last resort. Franchises in struggling mid-tier NBA markets often relocate rather than invest in long-term growth.
Where Things Stand Today
Today, the NBA markets by size dynamic is more pronounced than ever. The league’s 2025 media rights deal—reportedly worth $76 billion—will further entrench the divide. Big-market teams like the Lakers and Warriors will see their revenue explode, while small-market teams like the Pelicans or Pacers will still rely on revenue-sharing to compete. The market-size hierarchy isn’t just about basketball; it’s about survival. Teams in Las Vegas and Phoenix can build palaces, while those in Sacramento or Memphis must make do with hand-me-downs. The league’s global ambitions—particularly in China and Europe—have created new opportunities, but the NBA markets by size reality remains unchanged. The difference between a franchise in New York and one in Indiana isn’t just geographic; it’s existential. One can afford to lose money while chasing a championship; the other can’t afford to lose at all.
Conclusion
The NBA’s market-size divide isn’t a bug—it’s a feature. The league’s business model thrives on inequality, where big markets generate wealth and small markets sustain hope. The result is a league that’s both globally dominant and domestically fragmented. For every Lakers or Knicks, there’s a Kings or Magic, fighting to stay alive. The question isn’t whether the NBA markets by size dynamic will change—it’s how long the league can sustain it before the small-market teams break. The answer may lie in the league’s global growth. If the NBA can monetize its international fanbase effectively, the market-size hierarchy might soften. But for now, the divide remains. And until it doesn’t, the NBA’s future will be written in the ledgers of its biggest and smallest markets alike.Comprehensive FAQs
Q: How do NBA markets by size affect team valuations?
The gap is stark. Teams in Los Angeles or New York are valued at $3-5 billion, while those in Indiana or Memphis hover around $1 billion. The difference comes from local revenue (ticket sales, sponsorships, media rights) and global brand appeal. Big-market teams can afford to lose money on payroll; small-market teams can’t.
Q: Can small-market teams ever compete financially?
Not without help. Revenue-sharing, the draft lottery, and luxury tax breaks are designed to level the playing field. But even with these tools, small-market teams are at a disadvantage. The best strategy? Build through the draft, trade for assets, and hope for a star player to emerge.
Q: Why don’t more teams relocate to bigger markets?
Relocation is expensive and politically risky. The NBA has strict rules about where teams can move, and cities often offer incentives (tax breaks, arena subsidies) to keep franchises. The last major relocation was the Clippers to Los Angeles in 1984—nearly 40 years ago. The league prefers stability over disruption.
Q: How does the NBA markets by size divide affect player salaries?
Big-market teams can afford supermax contracts (e.g., LeBron James, Stephen Curry), while small-market teams rely on mid-tier salaries and roster flexibility. The luxury tax punishes big spenders, but it also protects small-market teams from going bankrupt. The result? A league where star power is concentrated in a few cities.
Q: What’s the future of NBA markets by size?
The league’s global expansion could blur the lines, but for now, the market-size hierarchy remains intact. If international revenue grows significantly, small-market teams might see more equity. Until then, the divide will persist—driven by TV deals, sponsorships, and the simple fact that some cities generate far more money than others.
