Racial Discrimination in Professional Basketball: Evidence from Nielsen Ratings

Using data on Nielsen ratings for locally televised NBA basketball games, we find strong evidence that viewership increases when there is greater participation by white players. This finding controls for a wide variety of other factors that could systematically affect Nielsen ratings, and signifies the presence of customer discrimination in the market for NBA players. We also find that higher Nielsen ratings allow NBA teams to realize greater advertising revenues, meaning that the marginal revenue product of white players exceeds that of comparable black players. This factor explains much of the race-based salary gap that exists in professional basketball.