NBA is going to start its penultimate season under the current TV deal.
ESPN and TNT retain their exclusive negotiation windows until April.
After that, other networks or streamers like Amazon and Apple can bid for part of the NBA TV rights for the US.
We've had all these stories about how Disney is seeing it's ESPN money dry up as cord-cutting accelerates. In additional media companies like Warner Brothers Discovery which owns TNT are reporting huge losses from streaming.
We also hear of poor ratings for NBA games in the last few years.
Yet the NBA is expected to attract a lot of interest because sports still attract live audiences, willing to sit through ads, not to mention major sports packages come up for bid only once a decade:
Every media rights renewal for the NBA is an important event because it only happens about once a decade. The last rights deal was announced in 2014. The NBA's current rights deal ends after the 2024-25 season.
All expressions of interest between media partners and the NBA have been preliminary because league officials can't officially negotiate with interested partners until April, when the league's exclusive negotiating window with incumbent media rights partners Disney and Warner Bros. Discovery ends.
But with the National Football League's media rights locked up until 2033, the NBA has a unique opportunity to play media kingmaker. Live sports have continuously increased in value for decades as advertisers clamor for live events where commercials can't be skipped. The NBA will likely get a significant increase on its new media deal. Former ESPN head John Skipper predicted earlier this year the league could get between 200% and 350% more in its new agreement.
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https://apple.news/AwvB5tv8YTq2WRlwwQ-Dw2gWhat is intriguing is that Netflix, which had expressed disinterest in sports rights in the past, may be interested because they want more subscribers who watch ads, because they ultimately make more money from the ad-tier than the higher-priced ad-free subscriptions.
NBA may be interested in Netflix's global reach.
Meanwhile there are differences of opinions on how much NBA could get for TV rights, even with streaming companies involved in the bidding. Ratings have been down but some argue that online engagement involving younger fans may make NBA rights more attractive:
This is despite data that NBA’s ratings have taken a tumble in recent years. The last four NBA regular seasons rank among the six least watched seasons of the past 30 years, according to Nielsen, though the covid-interrupted seasons are considered here and viewership numbers were down across most sports during that period.
A big reason for the dip is simply the decline in linear viewership overall. SportsMediaWatch highlighted that the 2022-23 NBA season saw its linear viewership audience nearly cut in half compared to its linear audience a decade prior.
But those who were still on linear television were watching the NBA. According to another report by SportsMediaWatch, the NBA averaged about 10% of all linear viewership during the 2023 playoffs, the highest share its had since 1998.
Even with the contentious analysis of the NBA’s television ratings, several experts told TheStreet that these rights deal negotiations go far beyond television ratings. Veteran sports media consultant and Columbia University sports management professor Joe Favorito referred to these ratings as an “archaic” way to look at rights negotiations.
“It's not really reflective of fandom today,” Favorito told TheStreet. “You can't just say, who's sitting in front of a piece of glass in their living room watching with a beer. Now it's: ‘Who is engaged, how long have they engaged, how are they interacting with each other, how are they reacting to what's going on, what products are they buying?'”
National Research Group’s executive vice president Jay Kaufman, who worked with the NBA for over two decades and helped in the internal analysis of the last two media rights deals, said that when he was with the NBA, he helped the league tell its monetization story by going beyond Nielsen ratings.
“We thought about this idea of Total Audience Measurement,” Kaufman told TheStreet. “In essence, taking the amount of time people were spending on live games on linear TV and then looking at digital engagement and social and highlights and thinking about it in terms of one big pie … If ratings or viewership or data is down a couple percent but the pie is expanded 10%, that's probably a good thing.”
The NBA hit a record of over 32 billion views across social media last season, and 50% of its total social media audience were 25 years old or younger. Its ability to secure a young and diverse demographic is another major reason why the league's rights remain so valuable.
“I think with a property like the NBA, the sort of audience they are delivering is pretty incredible: young, diverse, tech savvy audience that's a global audience,” Steve Herbst, vice president for client engagement at K2 Integrity, told TheStreet.
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