NBA TV deal: How the new $24B contract stacks up against other leagues
Annual revenue of $2.6 billion expected from ESPN, TNT
Remember when Rogers paid $5.2 billion for NHL rights in 2013? That figure seems tiny compared to the deal ESPN and TNT announced with the NBA yesterday.
Granted, the NBA is dealing with a much larger U.S. audience, but the comparison is still interesting.
The NBA's annual revenue from the agreements will increase from $930 million to more than $2.6 billion, according to a person familiar with the terms. The person spoke on condition of anonymity to The Associated Press because the league did not announce financial figures.
The contracts will run an additional nine years through the 2024-25 season. The previous eight-year agreements end after 2015-16.
"We believe at the end of the deal it will feel inexpensive," ESPN President John Skipper said. "It's hard to imagine."
Here's a comparison of how the NBA deal stacks up against the other North American pro sports:
|NBA||ABC, ESPN, TNT||To 2024-25||$24 billion|
NBC, Versus (U.S.)
|NFL||Fox, CBS, NBC, ESPN||To 2022||$27 billion|
|MLB||Fox, TBS, ESPN||To 2012||$12.4 billion|
ESPN, Fox Sports (U.S.)
|CFL||TSN, RDS||To 2018||$150-180 million|
"There's never been a better time to be an owner of an NBA franchise — or, frankly, any professional sports team," said Washington Wizards owner Ted Leonsis, chairman of the league's media committee. Broadcasting rights fees have been skyrocketing across all sports as live events become increasingly valuable to advertisers. Few viewers will DVR an NBA game, which means they can't fast-forward through the commercials.
LeBron: Don't tell us you're losing money
Players may remember that comment when they negotiate the next collective bargaining agreement with owners, which could happen in 2017. Owners insisted they needed a new financial structure during the 2011 talks and emerged with a deal that slashed the players' guarantee of basketball revenues.
"The whole thing that went on with the last negotiation process was the owners were telling us they were losing money. There's no way they can sit in front of us and tell us that right now," Cleveland's LeBron James said.
"After we continue to see teams selling for billions of dollars, being purchased for $200 million, signing for $550, $750 and $2 billion and now (Mikhail) Prokhorov is possibly selling his majority stake in the Nets for over $1 billion. That will not fly with us this time."
For ESPN, the value of the deal goes beyond games, though there are more of those, too: ESPN and ABC are adding 10 regular-season matchups, bringing their total to 100.
The network also gets expanded rights to air highlights and will significantly expand its NBA studio shows. The goal is to make basketball a year-round topic of conversation as the NFL has become on ESPN.
To that end, the agreement adds the NBA's Summer League and its developmental league. The network also extends its WNBA contract through 2025 and increases its offerings for ESPN International.
ESPN now owns rights to the NBA, NFL, Major League Baseball, college football playoffs and four of the five power conferences through at least 2021. Only the Big Ten contract ends soon among the network's biggest sports properties.
TNT, meanwhile, can't offer its own 24-hour sports channel to the NBA. But it has deep business ties to the league through managing its digital properties, which includes NBA TV and NBA.com.
Salary cap likely to rise
When the NBA negotiated its last CBA, the union secured the ability for either side to opt out in 2017 so players could gauge the effects of the next television deals on revenue. One reason James signed for only two years with the Cavaliers was an expectation that the salary cap would rise significantly with more TV money pouring in, increasing maximum salaries.
Silver said he would start discussions with National Basketball Players Association executive director Michele Roberts about the transition to a much larger cap.
With files from The Associated Press