NBA Can Hit Lofty Media Rights Goals By Creating More Pieces Of TV Pie
By most accounts, the NBA is the second-most popular professional sport in the United States, trailing only the NFL. Yet the league’s annual media rights amount to about $2.6 billion — a relative pittance compared to the NFL’s $10 billion per year.
That said, the NFL is just starting its lucrative new deal with a variety of TV partners. The NBA, meanwhile, is on the final years of a deal negotiated several years back in a very different TV landscape. With its current contract with Disney and Turner Sports (now part of Warner Bros. Discovery) set to expire at the end of the 2024-25 season, it’s officially time for the NBA to cash in.
It’s been reported that the NBA is seeking somewhere in the $50-75 billion range for its next TV deal, which could span eight to 10 years. At the high end, that’s getting close to the NFL’s per-year figure. At the low end, it’s still at least double the current amount. The best way for the NBA to ensure it gets as much as possible on this new deal, though, is to split the pie as many ways as possible.
Puck’s Matthew Belloni and Variety’s Andrew Wallenstein brought this topic up on The Town this week and it got me thinking about just how many ways the league could slice up rights. First, there are the obvious players:
Disney
Especially after bowing out of the Big Ten rights bidding war, Disney’s ESPN has to retain its share of any new NBA deal (currently 54% of financial outlay, with all NBA Finals rights as well). That becomes easier without the increased weight of the B1G. Given ESPN’s prominence, there’s virtually no chance a new NBA deal leaves Disney out.
Turner Sports
Turner parent company WBD is cutting costs everywhere, but it’s live sports — and especially NBA — coverage is one of the company’s highlights and biggest money makers, despite the high spend associated with those rights. Theoretically, there’s a chance that Turner could let the NBA walk to a bigger player and make its bed with the NHL (that deal began last year). But the long-time association between the NBA and Turner, which extends to the league’s own cable network, probably helps keep Turner in the fold if it can pay close to asking price, (a debate for another day).
Even assuming that Disney and Turner Sports are both back, though, it’s unlikely those deals look exactly the same. Taking a cue from its NHL coverage, ESPN could very well put more games on Hulu and ESPN+, or even incorporate NBA League Pass in some way. Turner could take a half-step back by paring down the number of games it has, perhaps, in favor of a digital player like…
Amazon, Apple and/or Netflix
Amazon and Apple have both dipped very large toes into the live sports pool in recent years, with more to come. For Amazon, Thursday Night Football is proof it can handle the audience scale needed for a weekly NBA showcase. Apple, meanwhile, showed itself relatively capable of creating a unique weekly baseball product this past season and will be scaling up its live sports chops when it takes over MLS rights. At least one (if not both) could land a weekly game in a new NBA deal, further crippling the value of RSNs to the league.
For Netflix, there are no live sports proof points just yet, but the service is implementing an ad tier next month and is touting its sports bonafides in the form of documentary-style storytelling around basketball, Formula 1 and more. Any piece of NBA pie carved out for Netflix would certainly include some form of the shoulder content that fans are already accustomed to seeking out there, and it would only enhance the value of having the game appear on the platform.
Then there’s the bevy of digital clips and content that are the lifeblood of NBA fandom. Traditionally, these have not been included in a media rights deal’s total figures. But one would think that given the league’s younger demographic, there’s real value in some sort of partnership with Twitch (as an alternative feed for an Amazon showcase) and/or TikTok. That’s not based on any reported conversations as much as a hunch that the league’s forward-thinking brass is going to find as many ways to monetize games as possible in the next rights deal and it’s younger and more international fan base is a better fit for social-focused platforms than other U.S. leagues.
The Proposed Breakdown
If we’re assuming something like $8 billion per year over eight years in the new deal, it could look get split in an arrangement like this:
Disney (linear): Continue with Wednesday and Friday games, plus Sunday showcase after football season wraps up — also get a greater share of playoff games, Finals, all of the popular Christmas Day slate
Disney (streaming): ESPN+ and/or Hulu air at least a couple games per week on Fridays, absorbing portions of the League Pass schedule
Turner: Scales down to three games per week across Tuesdays & Thursdays, plus slightly scaled-back playoff game share
Amazon: Weekly Saturday showcase from the start of the season, Twitch alternative feed for all games, perhaps the exclusive home of the proposed in-season tournament idea
Apple: Monday night showcase and all the Martin Luther King Jr. Day games
Netflix: Potential Friday night game partner, plus a documentary-style deal that has them working directly with NBA TV to highlight interesting stories/teams throughout the season
That’s basically every night of the week coverage for the NBA across easily accessible linear and streaming platforms before consumers even have to touch the NBA League Pass app or RSNs. If you’re the NBA, you take whatever losses that may create for League Pass, since an approach like this absolutely gets you paid handsomely for more national TV products.
One would think that such a lucrative deal also opens the door for long-awaited expansion in Seattle (bringing back the Supersonics) and Las Vegas. Adding teams means even more premium inventory to play with, and makes it even easier to keep splitting this pie without diluting what each media partner gets out of the deal.
Better still, for networks, is that the above proposal is still pretty linear-heavy. Theoretically, consumers still have to subscribe to cable — or at least a vMVPD — to watch the majority of NBA games and most of the marquee matchups. So that’s everyone having their cake and eating it too, despite a clear streaming pivot. Pretty nice compromise.
