The Utah Jazz are a small-market team, but they’re getting big-market TV ratings and seeking big-market sponsorships

New owner Ryan Smith wants the eliminate the whole big market vs. small market chasm in the NBA, and he has commissioner Adam Silver’s ear

(Leah Hogsten | The Salt Lake Tribune) Utah Jazz majority owner and Qualtrics founder Ryan Smith and former Miami Heat guard and new Jazz minority owner Dwyane Wade talk as the Utah Jazz host the Indiana Pacers, Friday, April 16, 2021, at Vivint Arena.

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The reviews of the early stages of the NBA playoffs are in — and they are mixed.

“Weakest playoffs ever,” former NBA player Nick Young tweeted last week. “Nobody wanna see Utah vs Nets or Suns vs Bucks lol.”

“So instead of a Lakers-Clippers Conference Finals we’re going to get Denver-Utah? And instead of a NY-LA Finals, maybe Utah-Milwaukee? League’s gotta be happy about that,” ESPN pundit Max Kellerman wrote.

Yes, the big-market Los Angeles Lakers and New York Knicks were eliminated in the first round. And it’s fair to say that there’s a perception out there that national basketball fans aren’t interested in the Utah Jazz, or any of the other small market clubs.

But how much does stand up to scrutiny? Do national TV fans watch the Jazz? How does new ownership, helmed by Qualtrics founder Ryan Smith, approach the problem of the Jazz’s market size? Here’s what you need to know.

Jazz’s TV ratings are better than advertised

Let’s start with something that wasn’t much in doubt: How many eyeballs do the Jazz draw locally?

The Jazz had very good local TV ratings in the NBA in the 2020-21 season, drawing a 5.9 rating on AT&T SportsNet Rocky Mountain, according to the Sports Business Journal. That number means that, on average, 5.9% of local TV households were tuned into Jazz games when they were airing. It’s also 9% higher than the Jazz’s TV rating compared to last season.

Where does the Jazz’s local TV popularity rank in the NBA? Second. Only the Golden State Warriors edged out the Jazz with a 5.96 local TV rating on NBC Sports Bay Area. And third was a distant third: The Portland Trail Blazers and Damian Lillard earned a 3.26 rating on their telecasts.

In the bottom five of popularity were the Pistons (0.73 rating), Nets (0.68 rating), Clippers (0.62 rating), Magic (0.47 rating), and Nuggets (0.34 rating). That list includes three of the most successful teams in the NBA this season, showing that it’s not necessarily winning that leads to huge local interest. (The Nuggets, it should be noted, have had distribution issues on their channel, Altitude — which isn’t available on Comcast or Dish.)

But the Jazz’s playoff TV ratings nationally stacked up to their competition as well. The Tribune compiled publicly available national TV ratings for each of the first round’s playoff games from sources like Sports Media Watch and Sports Business Journal. Ratings for the Jazz’s Game 4 matchup weren’t available, and the Jazz’s Game 5 win was shown on NBATV. So to compare apples to apples, we compared TV ratings for the first three games of each series, excluding any NBATV telecasts.

Utah vs. Memphis, despite being a series with two of the smallest markets in the NBA, ranked third among first-round series in terms of TV ratings, outdrawing series from bigger cities like Atlanta vs. New York or Philadelphia vs. Washington.

The league’s perceived small-market TV ratings penalty wasn’t really accurate; it was mostly just a Lakers bonus. The Lakers are a significant draw in the playoffs, the data shows, but fans didn’t find Dallas vs. L.A. Clippers compelling until the later games (Game 6 drew 3.61 million viewers, and Game 7 5.48 million on ABC). Boston vs. Brooklyn did well, but New York vs. Atlanta, not so much.

These numbers don’t include TV ratings from local viewers who watch the local station rather than the national network for the games, but they aren’t large in comparison. For example, Jazz/Grizzlies Game 2 drew 2.75 million viewers on TNT, but only 46,197 viewers on AT&T SportsNet.

Other pieces of the revenue puzzle

To be sure, TV ratings are the NBA’s biggest source of revenue. The league gets $2.6 billion per year from its television partners at TNT, ESPN, and ABC, which comes out to be about $86 million per team — taking care of the majority of each team’s salary expenditures.

But they aren’t the only thing that matters.

For example, despite their No. 1 seed nearly all season long, the Jazz didn’t rank in the NBA’s top 10 in terms of NBAStore.com merchandise sales in the league’s midseason update in March. (Full numbers for the entirety of the season have yet to be released.) Nor did any of their players rank in the top 15.

But just as the league’s TV revenue is split up equally among the NBA’s teams, so too is most of the NBA’s merchandising money, so this doesn’t end up hurting the Jazz much when compared with other NBA franchises.

What can make a large difference is local sponsorship revenue — arena signage, social media signage, and the local television contract. And there, while new Jazz owner Ryan Smith knows that the population numbers show that his is a small-market team, he thinks they can make money like the bigger markets can, thanks to the trajectory of Utah’s business community.

“Look, Utah is on a tear right now. I mean, you can barely find a house here in this market, with the macro trends that are going on, with everyone moving out of the super cities,” Smith said after purchasing the team. “I just don’t view it as technically a small market comparatively to the way that we’ve looked at it before.”

Smith added: “I look at the All-Star Game coming here. I look at — this has got to be the place for the Olympics in the future. And I look at what we have here with Don and Rudy and Coach Quin and this organization. I think there’s probably a lot of big-market teams that probably wish they were in our spot a little bit. ... We’re a top two or three tech destination right now in the United States. And we’re way above our weight class.”

He made exactly this point in a drive down I-15 with Sports Business Journal’s Bruce Schoenfeld, pointing out business after business on the edge of the freeway with a billion-dollar valuation; Lucid, Ivanti, PluralSight, Entrata, Lendio, CanopyTax, Purple, Owlet. More than ever before, Utah has the sponsorship money available that bigger cities do — and Smith’s goal is, in part, to cater his organization to earn those big-time dollars.

“There’s a traditional way in the NBA that owners think of small markets versus big markets,” NBA commissioner Adam Silver told SBJ. “Ryan has made it clear that he doesn’t accept that way of looking at it. Technology has been a great equalizer.”

(Trent Nelson | The Salt Lake Tribune) Utah Jazz center Rudy Gobert (27) and Utah Jazz guard Donovan Mitchell (45) as the Utah Jazz host the Houston Rockets, NBA basketball in Salt Lake City on Friday, March 12, 2021. Gobert and Mitchell has emerged as two of the NBA's brightest stars with the Jazz, a small-market franchise in the Mountain Time Zone.

A conversation with Adam Silver

Jazz center Rudy Gobert can’t remember exactly when the conversation took place — a few years ago, he says, in New York — where the NBA’s headquarters reside. But he remembers talking with Silver about this very issue: How do the small markets of the NBA stack up against the big markets?

“When I met with Adam a few years ago, we talked about this, too. I think the league is doing a great job making sure that they’re able to promote not just the big markets, but small markets.”

How do you do that? By promoting the storytelling of the game, and of those who play it. The National Football League is the model here — no matchup is more compelling than that of Kansas City vs. Tampa Bay. Those are two small-market cities, but with two of the game’s biggest stars and two dynamic ways of playing their sport.

Likewise, Gobert thinks Silver has a similar vision in mind for his league’s small markets.

“I think the beauty of this game is that you can tell stories and I think the beauty is always in the journey more than in the profit. And at the end of the day, when you tell beautiful stories, it brings profit. So, you know, I think the league understands that.”

The NBA’s television partners, perhaps buoyed by the Jazz’s early good ratings, are starting to adapt as well. ESPN’s Cassidy Hubbarth and TNT’s Rebecca Haarlow both have been a frequent participant in team news conferences this week, and ESPN’s Tim MacMahon has covered the franchise well for the “Worldwide Leader In Sports.” During and after Tuesday’s Game 1 game against the Clippers, Bleacher Report’s Twitter feed had 10 consecutive tweets about the Jazz, Donovan Mitchell, Wade, Gobert, and a Jazz win. The stories are being told.

To Gobert, what is the story of the Jazz? The story he’d tell Adam Silver to market?

“I think it’s a beautiful story. It’s a story of resilience. It’s a story of, you know, just overcoming adversity. I think it’s just inspiring, it should be inspiring for everybody out there that pays attention,” Gobert said, looking back to last year’s shutdown after his positive COVID-19 test, the rift with Mitchell and the healing that occurred in the aftermath. Everything that happened, we could have just broke apart and we didn’t, we got stronger.

“I think down the road, all the adversity, it’s going to pay off when things get hard,” he said. Yes, he meant for the Jazz’s chase of an NBA title.

But for the business of a surging Jazz franchise in a surging Utah market, small doesn’t have to be a limiting factor anymore. Small can pay off, too.