Business Update with Mark Lacter

How Kobe Bryant's injury may affect the Lakers' franchise

KPCC's business analyst Mark Lacter says it's difficult to know how Kobe Bryant's Achilles injury could affect the Lakers going forward.

Tess Vigeland: The Lakers still have a chance to make the playoffs.  But it's only natural to wonder how Kobe Bryant's season-ending injury might affect the franchise.  Mark, do you think it does?

Mark Lacter: Well, it probably pushes up the inevitable Tess - the day when Bryant is no longer a part of the Lakers, and that could have interesting business ramifications, not just for the Lakers but for all of basketball.  Now, during the playoffs, this doesn't mean much.  Even before Kobe's injury no one was expecting the team to get very far.  That means a probable drop in ratings - not unlike what happens during golf telecasts when Tiger Woods isn't playing.  As it stands, having San Antonio and Oklahoma City at the top of the NBA Western Division can't be great news for ESPN and TNT, which will televise the playoffs.  San Antonio is the 37th largest media market and Oklahoma City is the 45th.

Vigeland: But, what about the Clippers?

Lacter: Clearly, the ratings are up sharply this season, and if the team advances into the playoffs, the numbers will probably jump further.  Actually, this is a great opportunity for the Clippers to pick up more fans for next year, especially if Kobe has a tough time getting back.  But, keep in mind that the Lakers, for all their troubles, remain a hugely successful franchise.  Forbes values the team at $1 billion – second only to the New York Knicks and way higher than the Clippers, which are valued at just $430 million.  The value of sports franchises go beyond won-lost records.  A big part of it is location (which explains why New York and L.A. are the top two teams), and another important part of it is branding.

Vigeland: So even though the Lakers are in a rough patch, they are the Lakers...

Lacter: ...right, which means TV ratings will be solid no matter what, attendance will be high no matter what, and the ancillary revenue from stuff like caps and t-shirts will be strong no matter what.  There's even an argument that with Kobe in the tail end of his career and with his injury likely to impact his play - whenever he does get back - the Lakers should consider putting him on waivers.  Doing that would save around $80 million, which could be used for a young player.  Team officials have downplayed that possibility, but at some point there will be some sort of rebuilding effort – and that becomes a financial and marketing issue, as well.

Vigeland: Mark, Hollywood had an unusual box office weekend that involved another sport…

Lacter: That’s right, the Jackie Robinson film "42" took in $27 million, quite a bit higher than the initial estimates.  It also received an A+ grade among the folks who saw it, which will be good for word-of-mouth over the next couple of weekends.  And, in terms of demographics, it scored well among women, and among those over 25 – again pretty strong results for a movie without any big stars, and that takes place in the 1940s, and that doesn't use special effects.

Vigeland: Reviews were good, not great...

Lacter: ...yeah, about 70 percent of the critics liked it, according to the review site Rotten Tomatoes.  Now, figuring out why a particular film does better than expected is a fool's errand, which is why Hollywood can be such a fickle place.  In a case like "42," you have a compelling subject (breaking baseball's color barrier), plus the fact that this has been a lousy movie year so far and most anything that stands out is likely to do well.  By the way, "42" was helped along by the head of Legendary Pictures, Thomas Tull, who really wanted to get this movie made.

Vigeland: I wonder if it'll do well in Europe.

Lacter: You know, normally, sports movies do very little business overseas - and the foreign box office is becoming a big deal in determining financial success.  The football film "The Blind Side" picked up more than $300 million in ticket sales but 83 percent of that came from the U.S.  It’s hard to convince moviegoers overseas that they should care about a ballplayer they never heard of and a game they don't know much about.  Maybe this will be the exception.

Mark Lacter is a contributing writer for Los Angeles Magazine and writes the business blog at LA Observed.com.


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