Re: James Dolan Critical Of Impending Media Rights Deal, Argues NBA Moving To NFL Model

[RealGM Wiretap]

In a letter to his fellow NBA Board of Governors, James Dolan criticized the league's impending $74.6 billion media rights deal and revenue sharing policies. Dolan indicated that the new media deal renders Regional Sports Networks as "unviable."

"The NBA has made the move to an NFL model -- deemphasizing and depowering the local market," Dolan wrote in the letter. "Soon, your only revenue concern will be the sale of tickets and what color next year's jersey will be. Don't worry, because due to revenue pooling, you are guaranteed to be neither a success nor a failure.

"Of course, to get there, the league must take down the successful franchises and redistribute to the less successful. This new media deal goes a long way to accomplishing that goal."

Dolan outlined his criticism of what he called the league's plan to retain "...$6 billion (or 8 percent) of the total-NBA related fees....." without "sufficient justification ... nor transparency into how it arrived at the sum, how these fees will be allocated or to what extent the league will utilize this purported revenue growth to incur new and incremental costs and further expand the league's ever growing expense level..."

Dolan made a comparison to the league retaining $15 million (0.5 percent) in the league's current media deal for the 2024-2025 season and expressed a dissatisfaction with an increase of $358 million in 2025-2026 under the league's proposal, according to the letter.

Dolan cited issues with proposed revenue sharing in the league's sponsorship and local television packages too, according to the letter. According to Dolan, the league's "...proposal would also have a negative impact on the value of each member team's local sponsorships," including "...the delivery of camera-visible benefits at as few as 23 home games --- -roughly 20 percent reduction to what was historically provided."

Also, Dolan wrote, "team sponsors/partners would no longer be protected" during national broadcasts, which undercuts the premium that member team sponsors can be charged for being the sole third party promoted in a specific sponsorship category.

"...These changes drastically increase the challenges associated with attracting and renewing vital sponsorship revenue by creating a particularly unfriendly environment for member team sponsors."

In the letter, Dolan concluded: "We trust that our concerns are shared by many of our counterparts across the league, each of whom will be similarly impacted. The league will say that it does not matter because your franchise value will continue to rise; that contemplates you will eventually sell....

"Once again, pride of ownership is what is sacrificed. We are well on our way to becoming a one size fits all, characterless organization. Just remember we did this on the backs of owners like Jerry Buss."

Via Adrian Wojnarowski/ESPN

[Future Coach]

So the NBA office's is proposing that they should get 8% for negotiating the media rights deal? I wonder how many staff members the NBA has that are completely on their payroll.


And James Dolan isn't wrong here. Of course, he happens to own a regional sports network, but there is an argument that the expansion of the league-wide media rights deal does decrease the value of smaller regional sports networks. And, as an extension, it arguably could decrease the value of other potential advertising/sponsorship deals. It's often the larger market teams that can most take advantage of these individual opportunities, which larger market teams have argued helps compensate them for the increased cost of doing business in places like LA/SF/NY. The financial accounting (math) behind each of those arguments is certainly questionable, but likely shouldn't be dismissed outright.

[donemilio21]

I wonder how many staff members the NBA has that are completely on their payroll.
.

I would expect NBA has all their staff on their payroll

[donemilio21]

RSNs should be killed.

What NBA, and any other sports fan, would want is a single network that airs all the games. Period. You can subscribe to the games of a single team or all the games. no black outs.

[jwood255]

And James Dolan isn't wrong here.

Yes he is. Quit simping. What will it take to realize that billionaires don't ever make good points. All they ever do is pump out rhetoric that is beneficial to themselves.

He's doing the classic status quo whinging while trying to conserve his own "unfair" advantages (in quotes cuz this is billionaire vs billionaire infighting lol).

[NoStatsGuy]

i honestly prefer MSG Networks and watch there, whenever i can. and also i sometimes check the other local networks too. i like the variety and different flavors on the many broadcasts.

seriously i never agreed with dolan before i think, but he makes some good points, for sure.

[haste10176]

I assume he agreed to the CBA which does exactly this anyway to a larger extent that effects fans.. Lucky for him somehow his star player and star role player look inclined to take discounts for the team he owns.. That slice of 358m would look small compared to the luxury bill he would otherwise be up for.. Dolan is annoyed that his RSN is basically worthless now but the majority of the owners wont care and btw there are many things owner tend to own around their stadiums so its not one size fits all at all..

[DimesandKnicks]

i honestly prefer MSG Networks and watch there, whenever i can. and also i sometimes check the other local networks too. i like the variety and different flavors on the many broadcasts.

seriously i never agreed with dolan before i think, but he makes some good points, for sure.

Having watched more Knick games illegally from local markets, I will say how privileged we are as Knick fans to have such a great broadcast

[jstudabaka]

Agree with Dolan here. Not a fan of socialism in sports. Let the big markets leverage their advantages to build awesome teams. No one wants Indiana vs San Antonio in the NBA Finals

I realize in the NFL, they get great ratings even with smaller markets — but football has so many other structural differences that I think lead to the higher ratings, e.g. fewer games, fantasy sports, etc.

[Bad Bart]

And James Dolan isn't wrong here.

Yes he is. Quit simping. What will it take to realize that billionaires don't ever make good points. All they ever do is pump out rhetoric that is beneficial to themselves.

He's doing the classic status quo whinging while trying to conserve his own "unfair" advantages (in quotes cuz this is billionaire vs billionaire infighting lol).

Very well stated

[mihaic]

Canada's Bell and Rogers agree with Dolan twofold:
- like Dolan they own the regional networks.
- they could also use the 7.5% lost, to fight Dolan in court on the existing lawsuit, or to pocket it.

[beefman]

Agree with Dolan here. Not a fan of socialism in sports. Let the big markets leverage their advantages to build awesome teams. No one wants Indiana vs San Antonio in the NBA Finals

I realize in the NFL, they get great ratings even with smaller markets — but football has so many other structural differences that I think lead to the higher ratings, e.g. fewer games, fantasy sports, etc.

If that's the case, then the league should close up all the franchises except NY, Chicago, LA, and the other big market cities. What's the point of having any other teams? they can't compete with those big cities. and how are you going to pay the mega stars $50 million/year salaries when your league only consist of 3-4 teams?

you say you're not a fan of socialism but like the NFL and their salary cap?

[jstudabaka]

Agree with Dolan here. Not a fan of socialism in sports. Let the big markets leverage their advantages to build awesome teams. No one wants Indiana vs San Antonio in the NBA Finals

I realize in the NFL, they get great ratings even with smaller markets — but football has so many other structural differences that I think lead to the higher ratings, e.g. fewer games, fantasy sports, etc.

If that's the case, then the league should close up all the franchises except NY, Chicago, LA, and the other big market cities. What's the point of having any other teams? they can't compete with those big cities. and how are you going to pay the mega stars $50 million/year salaries when your league only consist of 3-4 teams?

you say you're not a fan of socialism but like the NFL and their salary cap?

Didn’t say I liked the NFL salary cap. I was giving reasons why it is successful that don’t have to do with parity and competitive balance in the event someone pointed to that as a desirable model.

The league doesn’t need to contract. There can just be perennially weaker and stronger teams, sort of like college sports. You clearly have your power programs — ‘Bama, Florida, Texas — but then your lower tier ones, e.g. Vandy, San Jose State, service academies. Or maybe another way of thinking about it is a pro-wrestling model. You’ve got the main events and the enhancement talent. NY, LA, CHI, BOS—main eventers. IN, MIL, OKC, CHA—jobbers.

[Tom White]

Agree with Dolan here. Not a fan of socialism in sports. Let the big markets leverage their advantages to build awesome teams. No one wants Indiana vs San Antonio in the NBA Finals

I think you would be surprised at how many fans are ready for a change from the year after year love fest the networks have for big market teams. You seem to enjoy the "entitlement" model, however.