NBA's new TV deal, maybe not smooth sailing
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NBA's new TV deal, maybe not smooth sailing
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NBA's new TV deal, maybe not smooth sailing
NBA's current deal with ESPN and TNT expires after the 2024-25 season. When this current deal, which is worth $24 billion over 10 years, was signed in 2014, it represented a big increase over the previous TV deal. It was surprising at the time.
So now, the NBA is seeking $75 billion over 10 years, which is triple the value of this current TV contact (which at the time was a big jump over the previous deal).
People have been assuming the NBA will get the figure it wants, with people like Bill Simmons predicting a huge cap spike and $70 million a year contracts for max players. After all, the NFL had seen a similar jump in TV rights money for their next TV deal.
But ESPN and TNT both have been sending lukewarm signals.
David Zaslav, who's trying to cut costs at Warner Brothers Discovery, said recently that WBD wants a new NBA TV deal but it's not absolutely necessary, even though they've signed Barkley to a 10 year almost $200 million deal. Zaslav has said that if they do sign a deal, it would have to include streaming rights, so they could presumably stream NBA games on HBO Max.
At ESPN, Bob Chapek, former CEO, said a new deal would have to make fiscal sense but he said Disney/ESPN would also need streaming rights included.
Then Chapek got ousted and Iger is back for 2 years. He'd probably make the decision on whether to sign an NBA deal. The interesting wrinkle is that he was said to be a potential buyer or part of a investor's group which would acquire the Phoenix Suns. However, the rumor is that Robert Sarver won't sell to Iger or any group that includes Server because he blames his problems with the ESPN expose of the Sun's culture.
So maybe Iger doesn't feel great about the NBA right now. Or maybe he wants to sign Disney to the deal and then he'd resign again and try to buy the Suns, looking at much greater TV money.
The other wrinkle is that NBA has apparently talked about auctioning off the streaming rights separately from the broadcast TV rights, wanting in on some of that Amazon or Apple money. That is probably why Zaslav and Chapek pointedly mentioned that they would have to get streaming rights as well as broadcast rights.
At stake is the new CBA, the viability of many clubs, the valuations of many clubs like the Suns which are for sale and the Lakers, which might sell off partial ownership at very elevated valuations. Then there's the possibility of expansion teams in the second half of the decade. If the NBA gets the money they targeted, the franchise fee for expansion franchises, already expected to be at least $2 billion, would be even higher with a much bigger TV contract.
The other aspect is that we're in the process of transitioning from the Lebron/Curry generation to the younger generation of superstars like Giannis, Luka, Tatum, etc.
Lebron and Curry have delivered ratings as well as huge merchandise sales. Giannis and Luka are great players and no doubt huge stars back in Europe. But Giannis is in a small market and it's not clear people tune in to national games to watch Luka, Tatum or some of the other young players.
Lebron and Curry may be retired or on the last year or two of their careers by the time the 2025-26 season, the first under the new TV deal, rolls around.
EDIT: added a poll on some of the options discussed.
So now, the NBA is seeking $75 billion over 10 years, which is triple the value of this current TV contact (which at the time was a big jump over the previous deal).
People have been assuming the NBA will get the figure it wants, with people like Bill Simmons predicting a huge cap spike and $70 million a year contracts for max players. After all, the NFL had seen a similar jump in TV rights money for their next TV deal.
But ESPN and TNT both have been sending lukewarm signals.
David Zaslav, who's trying to cut costs at Warner Brothers Discovery, said recently that WBD wants a new NBA TV deal but it's not absolutely necessary, even though they've signed Barkley to a 10 year almost $200 million deal. Zaslav has said that if they do sign a deal, it would have to include streaming rights, so they could presumably stream NBA games on HBO Max.
At ESPN, Bob Chapek, former CEO, said a new deal would have to make fiscal sense but he said Disney/ESPN would also need streaming rights included.
Then Chapek got ousted and Iger is back for 2 years. He'd probably make the decision on whether to sign an NBA deal. The interesting wrinkle is that he was said to be a potential buyer or part of a investor's group which would acquire the Phoenix Suns. However, the rumor is that Robert Sarver won't sell to Iger or any group that includes Server because he blames his problems with the ESPN expose of the Sun's culture.
So maybe Iger doesn't feel great about the NBA right now. Or maybe he wants to sign Disney to the deal and then he'd resign again and try to buy the Suns, looking at much greater TV money.
The other wrinkle is that NBA has apparently talked about auctioning off the streaming rights separately from the broadcast TV rights, wanting in on some of that Amazon or Apple money. That is probably why Zaslav and Chapek pointedly mentioned that they would have to get streaming rights as well as broadcast rights.
At stake is the new CBA, the viability of many clubs, the valuations of many clubs like the Suns which are for sale and the Lakers, which might sell off partial ownership at very elevated valuations. Then there's the possibility of expansion teams in the second half of the decade. If the NBA gets the money they targeted, the franchise fee for expansion franchises, already expected to be at least $2 billion, would be even higher with a much bigger TV contract.
The other aspect is that we're in the process of transitioning from the Lebron/Curry generation to the younger generation of superstars like Giannis, Luka, Tatum, etc.
Lebron and Curry have delivered ratings as well as huge merchandise sales. Giannis and Luka are great players and no doubt huge stars back in Europe. But Giannis is in a small market and it's not clear people tune in to national games to watch Luka, Tatum or some of the other young players.
Lebron and Curry may be retired or on the last year or two of their careers by the time the 2025-26 season, the first under the new TV deal, rolls around.
EDIT: added a poll on some of the options discussed.
Re: NBA's new TV deal, maybe not smooth sailing
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Re: NBA's new TV deal, maybe not smooth sailing
Are we sure Bob Iger won't sell ESPN before they have a chance to bid? With subs falling year after year at what point does Disney cash out and redirect toward an investment with a future? Lots could change between now and then.
Re: NBA's new TV deal, maybe not smooth sailing
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As a huge nba fan, I hope the nba does get screwed a bit on the TV deals. How many times have we heard the term load management during nationally televised games? These players and teams need a lesson that they can't screw the nba product continuously with 0 repercussions.
Re: NBA's new TV deal, maybe not smooth sailing
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Lol, a deal is going to get done. People always want to see the NBA fail lol.
Re: NBA's new TV deal, maybe not smooth sailing
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Re: NBA's new TV deal, maybe not smooth sailing
wco81 wrote:NBA's current deal with ESPN and TNT expires after the 2024-25 season. When this current deal, which is worth $24 billion over 10 years, was signed in 2014, it represented a big increase over the previous TV deal. It was surprising at the time.
So now, the NBA is seeking $75 billion over 10 years, which is triple the value of this current TV contact (which at the time was a big jump over the previous deal).
People have been assuming the NBA will get the figure it wants, with people like Bill Simmons predicting a huge cap spike and $70 million a year contracts for max players. After all, the NFL had seen a similar jump in TV rights money for their next TV deal.
But ESPN and TNT both have been sending lukewarm signals.Spoiler:
Great post.
- I think the $75M asking price is the proverbial "dipping the big toe in the pool" and seeing just how much the NBA can command at a time when streaming companies are fighting for the lead in streaming services. It would make you think the NBA is confident it can create a bidding war that will get them in the range of what they want. Still, that is an eye-watering sum.
- For the streaming services, I think Disney/ESPN is in a much better position to take a pass here, but the NBA offers such a long season and is much more lucrative than any other sport that isn't football. Does anyone watch TNT for anything other than basketball? I think it would be much more difficult for TNT to take a pass.
- It seems the goal is to get these massive valuations so that owners can sell off partial ownership (like the Lakers) and recoup their investments or make a nice profit and retain control of their franchises. At the same time, the NBA is pushing to cap wages. An incredible transfer of wealth is in play here.
- As for the future of the NBA, they'll be fine. The top-3 players in the league -- Giannis (28), Doncic (23), and Jokic (27) -- are all under 30 and will presumably play through at least half of the new deal. And this is without considering the NBA has Tatum, Zion, Morant, Tatum, Edwards, LaMelo Ball, and Banchero who are all under 25. Wembanyama is all the rage (we'll see how that turns out).
Beyond that, one could also argue the league has never been as competitive as it is now. Certainly, the league overall has never had more talent.
Re: NBA's new TV deal, maybe not smooth sailing
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If I was the NBA I'd start worrying when ESPN gets anything else with consistent ratings other than sports.
There's a reason every single streaming service wants local blackouts... it legit won't be able to sell cable without it.
Hell Professional Wrestling is extremely boring and it still often is among the top rating getter in key demographics because there is nothing produced on television worth paying for anymore.
There's a reason every single streaming service wants local blackouts... it legit won't be able to sell cable without it.
Hell Professional Wrestling is extremely boring and it still often is among the top rating getter in key demographics because there is nothing produced on television worth paying for anymore.
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Tor_Raps wrote:As a huge nba fan, I hope the nba does get screwed a bit on the TV deals. How many times have we heard the term load management during nationally televised games? These players and teams need a lesson that they can't screw the nba product continuously with 0 repercussions.
Agree. If I was the TV guys I’d want some contractual assurances the stars will play regularly and build in penalties when guys sit. Make it hurt revenue for teams to load manage their stars.
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Re: NBA's new TV deal, maybe not smooth sailing
celticfan42487 wrote:If I was the NBA I'd start worrying when ESPN gets anything else with consistent ratings other than sports.
There's a reason every single streaming service wants local blackouts... it legit won't be able to sell cable without it.
Hell Professional Wrestling is extremely boring and it still often is among the top rating getter in key demographics because there is nothing produced on television worth paying for anymore.
It is understood that tv ratings are catering but I don't think people appreciate how much they've collapsed this century.
Yellowstone was the highest rated tv show last week with 8.83 million tuning in. In Nov 2010, a show called the mentalist hit almost 14 million. In a country of 370 million people that is nothing. Simply put there is no such thing as a hit show anymore.
Sports is one of the few things that people reliably watch live. All sports, even sports declining in popularity like baseball, are extremely valuable to networks for the reasons you outlined. It is one of the few things that can guarantee eyeballs. The NBA will get the figure it wants. And if it leaves TNT/ESPN it will because it choose to leave.
https://www.hollywoodreporter.com/tv/tv-news/tv-ratings-sunday-nov-20-2022-1235267690/
https://tvseriesfinale.com/tv-show/tv-show-ratings-november-11-2010-18869/
Re: NBA's new TV deal, maybe not smooth sailing
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Wish they aired the negotiations of these tv deals & the tug of war between the lawyers and executives behind the scenes, you could bet they'ed draw eyeballs, Its so much more money than the Mega Millions powerball at stake , how could people resist? Just imagine intense music then $75Billion at stake and then pan the camera Live to Kawhi and Uncle Dennis playing pokemon go during his load management.
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lonzo_pelota wrote:Wish they aired the negotiations of these tv deals & the tug of war between the lawyers and executives behind the scenes, you could bet they'ed draw eyeballs, Its so much more money than the Mega Millions powerball at stake , how could people resist? Just imagine intense music then $75Billion at stake and then pan the camera Live to Kawhi and Uncle Dennis playing pokemon go during his load management.
I’d take that bet in an instant. Believe me this isn’t an episode of Succession; contract negotiations are typically boring, tedious, and drawn out affairs that offer very little excitement or intrigue to anyone outside those negotiations. I’ve been a lawyer for almost 15 years both in the criminal and corporate side and I can tell you most of what we do would bore you to death. It’s mostly paper shuffling, emails, and passive aggressive meetings; there’s not much intensity involved.
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Free Rider wrote:lonzo_pelota wrote:Wish they aired the negotiations of these tv deals & the tug of war between the lawyers and executives behind the scenes, you could bet they'ed draw eyeballs, Its so much more money than the Mega Millions powerball at stake , how could people resist? Just imagine intense music then $75Billion at stake and then pan the camera Live to Kawhi and Uncle Dennis playing pokemon go during his load management.
I’d take that bet in an instant. Believe me this isn’t an episode of Succession; contract negotiations are typically boring, tedious, and drawn out affairs that offer very little excitement or intrigue to anyone outside those negotiations. I’ve been a lawyer for almost 15 years both in the criminal and corporate side and I can tell you most of what we do would bore you to death. It’s mostly paper shuffling, emails, and passive aggressive meetings; there’s not much intensity involved.
I get what you mean, of course you have to edit it for tv 30-60mins , so take the best bits, like on the show billions or succession too
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It’s always interesting to me how these TV deals get done and the TV networks are obviously hoping to make the $$ off advertisements and commercials and such.
I can honestly say I’ve never ever in my life bought something because I saw it on a TV commercial. NBA loves to shove Hyundai/Kia/Genesis down our throat, I truly wonder if there is even one person in the world who bought a Kia or Hyundai at least in part because how NBA games always mention it for advertising.
Idk, maybe just me but I’m always surprised that these big companies pay so much $$ for advertising to these TV networks and sports leagues as if the average American is going to buy their product because of it.
I can honestly say I’ve never ever in my life bought something because I saw it on a TV commercial. NBA loves to shove Hyundai/Kia/Genesis down our throat, I truly wonder if there is even one person in the world who bought a Kia or Hyundai at least in part because how NBA games always mention it for advertising.
Idk, maybe just me but I’m always surprised that these big companies pay so much $$ for advertising to these TV networks and sports leagues as if the average American is going to buy their product because of it.
Re: NBA's new TV deal, maybe not smooth sailing
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Revived wrote:It’s always interesting to me how these TV deals get done and the TV networks are obviously hoping to make the $$ off advertisements and commercials and such.
I can honestly say I’ve never ever in my life bought something because I saw it on a TV commercial. NBA loves to shove Hyundai/Kia/Genesis down our throat, I truly wonder if there is even one person in the world who bought a Kia or Hyundai at least in part because how NBA games always mention it for advertising.
Idk, maybe just me but I’m always surprised that these big companies pay so much $$ for advertising to these TV networks and sports leagues as if the average American is going to buy their product because of it.
They absolutely do buy products because of advertisements...and you probably do too.
Just because you see a sprite commercial and didnt go "Wow, I would sure like me a bottle of sprite right now!" doesn't mean that your awareness and desire for the product was not affected by the advertisement.
Advertising is obviously real.
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Revived wrote:It’s always interesting to me how these TV deals get done and the TV networks are obviously hoping to make the $$ off advertisements and commercials and such.
I can honestly say I’ve never ever in my life bought something because I saw it on a TV commercial. NBA loves to shove Hyundai/Kia/Genesis down our throat, I truly wonder if there is even one person in the world who bought a Kia or Hyundai at least in part because how NBA games always mention it for advertising.
Idk, maybe just me but I’m always surprised that these big companies pay so much $$ for advertising to these TV networks and sports leagues as if the average American is going to buy their product because of it.
Meh, it's more subtle than that. The primary goal of most advertising is to simply create brand awareness, not necessarily to spur a conscious direct choice to purchase immediately upon viewing.
Re: NBA's new TV deal, maybe not smooth sailing
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At this point, it's all posturing on both sides, and I wouldn't put much stock in what the representatives of either side say publicly. The NBA will get a new broadcast deal that exceeds the prior one, but I doubt it comes in at three times the prior one when it's all said and done.
NBA's new TV deal, maybe not smooth sailing
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NBA's new TV deal, maybe not smooth sailing
All I know is they better smooth the new cap number over several seasons.
We seriously don’t need another Megastar added to a 73-9 team again ruining parity for X years.
And yeah NBA will get very close to what they want. If not outright what they want.
We seriously don’t need another Megastar added to a 73-9 team again ruining parity for X years.
And yeah NBA will get very close to what they want. If not outright what they want.
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jefe wrote:Revived wrote:It’s always interesting to me how these TV deals get done and the TV networks are obviously hoping to make the $$ off advertisements and commercials and such.
I can honestly say I’ve never ever in my life bought something because I saw it on a TV commercial. NBA loves to shove Hyundai/Kia/Genesis down our throat, I truly wonder if there is even one person in the world who bought a Kia or Hyundai at least in part because how NBA games always mention it for advertising.
Idk, maybe just me but I’m always surprised that these big companies pay so much $$ for advertising to these TV networks and sports leagues as if the average American is going to buy their product because of it.
Meh, it's more subtle than that. The primary goal of most advertising is to simply create brand awareness, not necessarily to spur a conscious direct choice to purchase immediately upon viewing.
Not immediately upon viewing but for example on the car ones, like I said NBA has shoved Hyundai down its fans throats for at least 10-12 years now. I’ve bought 3 cars in that span including one last year and never did I remotely consider Hyundai. It’s nothing against the company itself (they make solid vehicles) but it’s not something that interests me.
I can’t speak for everyone so I guess perhaps others do maybe think when it comes time to buy a car “Hey what was that one Hyundai SUV that we keeping seeing the ad for when watching basketball games? Let’s maybe go take a look at that one” or something.
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Plz let the deal fall through and nba end up Amazon primetv or YouTube.
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Sports is the only thing cable tv has left that people can't get around to watch easily. Maybe they don't get that $75 billion, but he price will be high.
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I mean ya its not looking great when the two companies youve been doing business with for so long are in major financial issues at the moment. It also doesnt help that Amazon may be hesitant to add on to their streaming with all the money they just put into Rings of Power and that hasnt come close to what they were hoping for when it comes to audience reception.