By Davidson Abraham
Sundiata Post – In the ever-evolving world of sports broadcasting, the National Basketball Association (NBA) stands at a pivotal juncture as it embarks on a journey to secure its next-generation television rights. Nearly a decade has passed since the NBA inked historic nine-year deals worth a combined $24 billion with Walt Disney Co. (ABC and ESPN) and Warner Bros.
Discovery Inc. (TNT). These agreements, signed in the fall of 2014, saw the annual value of TV rights nearly triple, sparking a transformative period that elevated player contracts into the hundreds of millions and franchise valuations into the billions.
As the expiration date for these groundbreaking deals approaches in 2025, the NBA is gearing up to redefine its relationship with broadcasters in the midst of a rapidly changing media landscape. The landscape is vastly different from a decade ago, with legacy media companies grappling with the dual challenges of the traditional cable bundle’s decline and the high cost associated with building subscription streaming services.
In 2014, over 100 million U.S. households subscribed to multichannel pay-TV. Fast forward to the present, and that number has plummeted to below 75 million, signaling a seismic shift in how viewers consume content. Streaming apps, introduced to recapture lost viewers, are contributing to media giants such as Comcast, Disney, and Paramount collectively racking up billions of dollars in losses each year. Against this backdrop, the NBA finds itself negotiating new TV agreements in a vastly different terrain than it did a decade ago.
John Kosner, a sports media consultant and former ESPN executive, notes that the upcoming deals are not merely extensions but a recalibration of the NBA’s broadcast strategy. “These deals are going to look and feel different,” Kosner observes, hinting at the need for innovation and adaptation in an era dominated by streaming services and digital platforms.
The negotiation process is set to officially commence in March, with Disney and Warner entering an exclusive 45-day window to explore possible extensions.
However, both incumbents are not expected to wait until then, with bids likely to be submitted earlier. Newcomers, including tech giants like Alphabet Inc. and Amazon.com Inc., have already started positioning themselves to enter the NBA broadcasting arena, adding an additional layer of complexity to the negotiations.
Currently, Disney broadcasts 100 regular-season games on ESPN and ABC, along with playoff coverage and the NBA Finals. Warner, on the other hand, airs 64 regular-season games and shares playoff coverage. While it is widely expected that both networks will continue to carry NBA games, industry experts anticipate a significant shift in the structure of these packages. The league is keen on accommodating partners who can reach younger audiences and help sustain the NBA’s relevance in the ever-evolving media landscape.
The recent trend in major sports leagues striking deals with tech giants is hard to ignore. In the past three years, the National Football League (NFL), Major League Baseball (MLB), and Major League Soccer (MLS) have all secured lucrative TV agreements with digital behemoths. The NFL, for instance, sold Thursday Night Football to Amazon for over $1 billion per season and its out-of-market Sunday Ticket package to Alphabet’s YouTube TV for $2 billion. Apple Inc. also entered the fray, acquiring Friday night games from MLB for a reported $85 million and spending about $250 million to become the streaming home of MLS.
Industry insiders speculate that the NBA is poised to follow suit, ushering in a new era of broadcasting partnerships. Daniel Cohen, a media rights consultant at Octagon Inc., suggests that to maximize revenue in a fractured media landscape, the NBA will need to expand its partners to three or four. “If they do that with the right packages, then I could see $2.7 billion going to $6 billion,” Cohen predicts, referring to the potential annual revenue. Such a setup might involve a reduced number of games on ESPN-ABC and TNT, a weekly exclusive game on Apple TV+, and the NBA’s new In-Season Tournament finding a home on Amazon.
For fans, this could mean a costlier and more complicated viewing experience, with additional paywalls to navigate. The cable bundle, once a staple for sports enthusiasts, is unraveling, and the NBA is at the forefront of adapting to these changes. As the league navigates the intricacies of the modern media landscape, the forthcoming TV rights agreements will undoubtedly shape the future of NBA broadcasting, offering fans a glimpse into the next frontier of sports entertainment.