NBA Bounce-Back Is No Slam-Dunk

By GREG JOHNSON

Jan. 7, 1999 12 AM PT

TIMES STAFF WRITER

The settlement ending the National Basketball Assn.’s bitter player lockout Wednesday gave athletic apparel and shoe company stocks a boost on Wall Street. But sports marketing industry observers predict that fan reaction along Main Street will be more muted.

“I think most people today will go to bed indifferent,” said Rick Burton, director of the Warsaw Sports Marketing Center at the University of Oregon in Eugene. “The question is whether anyone really cares anymore about the NBA.”

Word of the agreement--coupled with general euphoria on Wall Street--helped Nike Inc. rise $2.94 to close at $43.63, while competitor Reebok International Ltd. rose 56 cents to close at $16.25. The Just for Feet Inc. shoe store chain rose $1.44 to close at $18.50 and shoe and apparel maker Finish Line Inc. rose $1.19 to close at $8.94. Boston Celtics, the owner of the NBA team of the same name, jumped $4.13 to close at $14.63.

Despite Wall Street’s enthusiasm, sports industry observers say it’s too soon to say what the return to action means for the NBA’s corporate partners, including advertisers and manufacturers of licensed merchandise.

“Wall Street is jumping on these stocks like it’s all going to turn on a dime, but it isn’t,” said Bob Carr, editor of Inside Sporting Goods, a newsletter published in New York. For starters, Carr said, the retail market is awash in discounted shoes, and fans are unlikely to rush out and buy NBA licensed merchandise even if Michael Jordan, its top star, returns to action.

Advertisers will be scrutinizing public reaction to the NBA’s return to determine what role professional basketball will play in budgets that, for the most part, already have been set in place for the first half of 1999. “The NBA isn’t crucial to our advertising plans in 1999,” said AT&T; spokesman Burke Stinson. “We weren’t able to count on them as a viable option. And I think that AT&T;, for the most part, will probably advertise elsewhere this season.”

Nike, a company that’s synonymous with basketball, reinstated endorsement checks Wednesday to players and the NBA. The checks were cut back last month when it became obvious that the lockout would spill over into 1999. Nike plans to “have basketball advertising throughout the year, but just how the ads get executed has yet to be determined,” Nike spokeswoman Vizhier Mooney said.

Many sports marketers expect the NBA to rebound faster than baseball, which has been trying to reinvigorate fan interest since a player strike resulted in the cancellation of the 1994 World Series.

“Hopefully the framework and the new paradigm created by the league and the players will allow them to make up the ground lost during the lockout and the resulting damage that was done,” said Leonard Armato, a Santa Monica-based agent who represents Laker center Shaquille O’Neal. “If this turns into a particularly successful season, then [the NBA] will be able to quickly recapture the imagination of the fans . . . obviously, winning is still the magical potion.”

But sports marketers see little chance of a quick rebound in fan enthusiasm. Scott Kelnhofer, managing editor of Wisconsin-based Sports Card magazine, a trade publication, on Wednesday surveyed trading card dealers who have seen sales drop significantly since the labor dispute began.

“They do not expect a full ‘welcome back’ from the fans and collectors,” he said. “But at least it’s better than not having any season at all.”

Sports marketers said the NBA’s return is just one step--the other being Jordan signaling that he’ll lace up his sneakers for another season. “Michael Jordan is a critical part of the NBA’s strategy,” Burton said. “He’s Babe Ruth, he’s St. Michael . . . he’s the only one that can save basketball from itself.”

If results of a new Harris Poll are a good indication of fan reaction, the NBA and its corporate partners will need an assist from Jordan and other front-line players such as O’Neal to build beyond its core fan base.

The poll conducted in late December by New York-based Louis Harris & Associates suggests that hard-core fans will rush back into NBA arenas. But players shouldn’t expect fans to greet them with open arms: Two-thirds of respondents placed most of the blame for the work stoppage on the shoulders of players and their agents. Just 23% blamed owners, a 6-point decrease from last summer when the work stoppage began.

Consumers between the ages of 18 and 29--who represent the next generation of NBA ticket buyers, as well as customers for endorsed products and licensed merchandise--were most likely to blame players and agents, said Matt Scheckner, director of the Harris Sports & Entertainment business unit.

“For the NBA and . . . the agents and players, the challenges are to reunify their collective marketing efforts,” Scheckner said. “Most importantly, [the NBA] must commit to address player behavior issues in earnest and market the next generation of prospective stars to capture growth among non-core fans.”

Times staff writer Leslie Earnest in Orange County contributed to this report.

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Flat Fan Base

Despite the labor strife, the percentage of Americans who follow professional basketball remains where it was earlier in the decade. The poll was conducted in December of each year.

Year: 1992

Follow pro basketball: 35%

Follow men’s college basketball: 26%

Year: 1993

Follow pro basketball: 35

Follow men’s college basketball: 28

Year: 1995

Follow pro basketball: 29

Follow men’s college basketball: 24

Year: 1996

Follow pro basketball: 28

Follow men’s college basketball: 21