NBA’s next broadcast deal: What can we expect after MLS payday with Apple?

Broadcast rights funding has been the lifeblood of American sports for decades, and Tuesday’s news that Major League Soccer and Apple had struck a 10-year, $2.5 billion global deal was the latest surprise for a domestic league. fiscal.

It’s fair to wonder how MLS’ unique relationship with Apple will affect future rights contracts, a deal that will be part of an upcoming streaming service that will put most of the league’s games behind a paywall, while some non-traditional TV broadcasts Exclusive deals are yet to come. for other leagues.

Specifically, the National Basketball Association.

The NBA is the last of the five major U.S. men’s leagues to sign a new media rights deal. It currently has two major TV contracts with ESPN and Turner Sports, which will pay a combined $24 billion after the 2024-25 season.

Since these contracts were announced in 2014 (effective in 2016), the broadcast industry landscape has been shaped by new technologies and changing consumer habits. We’re now deep into the so-called streaming wars waged by legacy networks and tech giants like Apple and Amazon, and we’re also well aware of the disconnection trend in US pay TV households (cable and satellite) from 100 million a few years ago That’s down to about 70 million today.

While the NBA’s TV ratings have declined — and streaming has only partially offset that trend — its games and other live sports remain an industry darling because the long-term decline isn’t as bad as other TV shows.

Therefore, funds continue to flow. Over the past few years, we’ve seen television giants, the NFL, sign new contracts worth $113 billion through 2033. The NHL said its new deals with ESPN and Turner helped generate a record $5.2 billion this season. New deals for baseball are worth $12.24 billion.

So, given all of this, and the bold and risky structure of MLS’s new global media rights deal, what can the NBA expect from the next round of rights talks?

Last year, CNBC reported that sources familiar with the alliance’s media rights plans expected the expected figure to be around $75 billion, a marked increase from the current $24 billion. Whether this is a negotiated number that surfaced purely for probing, and whether the league has a smaller, secret number it deems acceptable, we’ll have to wait and see.

Media industry analyst and former Fox Sports executive Patrick Krex said he thinks the NBA’s media rights collective would be worth at least $50 billion in a long-term deal like the current relationship.

“I think the NBA is looking at maintaining existing relationships and expanding new ones,” he said.

To be sure, the league will get a nice raise on one or more deals that are expected to be a mix of traditional linear TV and streaming, possibly with creative elements involving social media highlights, stats, betting, etc., These elements may appeal to different audiences.

The NBA declined to comment.

The NBA’s current deals with ESPN and Turner run through the 2024-25 season and pay the league about $2.4 billion a year. (Ron Chenor/USA TODAY)

We do know that the league will benefit from media rights deals struck over the past few years that have left few broadcasters or tech giants going after top sports properties. A high tide lifts all ships, even if only one remains.

“There are relatively few top sports properties coming into the market in the next few years,” said Lee Berke, president and CEO of LHB Sports, Entertainment & Media Inc., a New York-based sports media consultancy. Sports media companies, you have to focus on the NBA. “

He didn’t provide dollar figures for what the NBA could land on, but agreed it would be a significant increase.

“We’re looking at the exponential growth of NBA media revenue,” Burke said. “They’re a very popular property that can generate a huge audience — especially a younger audience. It’s going to be a very aggressive market.”

Media consultant Ed Desser, a former NBA executive who negotiated TV rights deals for several major league teams and organizations, said the MLS deal was a “milestone” for the sports broadcasting industry, noting a number of factors that could affect the The NBA builds the next media deal.

He predicts that there will be more streaming, perhaps centralized game production, and that NBA League Pass may somehow be incorporated into national agreements. The concept of Apple as a legitimate potential sports media partner has been further cemented.

That being said, it will be some time before the NBA reaches a new deal, and it’s impossible to imagine what will happen to technology, audience habits, broadcast industry consolidation, the economy, etc. during that time.

“The existing NBA deal has three seasons left, so there will be further development in the industry during that time,” Desser said. “The NBA has a young fan base that is very digitally savvy, so its digital rights distribution will be especially important, compared to the fact that MLB has already done several major streaming deals. The NBA’s timing could be ideal because there will be Complete some additional deals, especially the college conference and NASCAR deals.”

Unlike MLS, a major portion of NBA teams’ revenue comes from regional sports network rights deals in their local markets — a model that MLB and NHL also use because of their vast inventory of games. Major League Soccer’s local rights deals have been financially tame. A few years ago, Major League Soccer ordered its teams to end any local rights deals before the season so that it could bundle all of the league’s local, national and global rights. Under the leadership of MLS Deputy Commissioner and MLS Business Ventures President Gary Stevenson, Apple did just that and led the deal.

“Stevenson shrewdly unifies all national and local trades. This gives him the ability to deliver critical mass to global players locally and nationally. The NBA has a much higher barrier to entry and many existing local trades continue Ten years or more, and the international business is well developed,” Desser said.

The NBA is expected to continue its hybrid model of separate deals for local, national and international media.

“Since the league allows teams to own rights to games that are not licensed at the national level, I don’t think an Apple-MLS-style deal would match their current configuration,” said Charlotte founder and president Curt Pires. CAP Sports Group based on media management and consulting. “That could change, but not currently. It does make rights holders rethink the rights of local teams and how they can be maximised in the future if they can be tied together. Rethinking how to maximise local broadcast rights would be Top consideration, especially with potential expansion on the horizon.”

There’s another major difference between MLS and the NBA: Major League Soccer, established in 1996 as the nation’s fifth major men’s league, isn’t the most popular professional leagues in the U.S. — the British Premier League and the Mexican Premier League. Liga MX commands a larger U.S. soccer audience.

The NBA is by far the most popular basketball league in the world. That will help it get more money, even if its next set of deals mirror some of what MLS has done this week.

Why traditional media companies — ESPN/ABC by Disney, Warner Bros., Turner Sports by Discovery, etc. — want live sports and are willing to pay exorbitant fees for them: People are still watching them, while the Internet Know that they can sell airtime to brands at premium prices (and use eye-catching sports TV and streaming to promote other shows). This model works even if people watch less TV in general.

Deals with tech companies have different business goals, Crakes said. Amazon uses its sports deals to lure people to its e-commerce and on-demand video businesses. Apple uses sports to drive customers to buy new devices and services (you can expect to see the MLS streaming service bundled with these Apple products).

Apple is a device maker and sports deals will never replace it, Crakes said.

“The media business has to serve this,” he said. Apple or Amazon could bid for NBA media rights because they believe bundling games with their core products and services will drive profits.

These tech giants certainly have the capacity to spend more in sports: Apple’s 2021 revenue is $365 billion, compared to Amazon’s $469.8 billion.

Whatever the NBA ends up doing, Crakes said he would like to see more streaming and possibly multiple partners, but not as aggressive as MLS-Apple TV.

“Streaming will be further segmented,” Crakes said. “I don’t believe MLS’ complete switch to Apple is what you’d see in the NBA.”

(Above: Kyle Terada/USA TODAY)


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