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

Broadcast rights money has been the lifeblood of American sports for decades, and Tuesday’s news that Major League Soccer has reached a $2.5 billion 10-year global deal with Apple Inc. was the national league’s latest windfall. .

It’s fair to wonder how MLS’s unique relationship with Apple — the deal will put most of the league’s paywalls on the upcoming streaming service, with some non-exclusive deals for traditional TV — will impact future rights contracts. for other leagues.

In particular, the National Basketball Association.

The NBA is the latest of five major US men’s leagues in line for new media rights deals. He currently has two major television contracts with ESPN and Turner Sports that will pay her a total of $24 billion by the time the contracts expire after the 2024–25 season.

Ever since these contracts were announced in 2014 (they went into effect in 2016), the broadcast industry landscape has been churning with new technologies and changing consumer habits. We are now deep into the so-called streaming wars waged by legacy networks and tech giants like Apple and Amazon, and we are also very familiar with the cord-cutting trend that is being seen in American pay-TV (cable and satellite) homes. ) have dropped from over 100 million a few years ago to around 70 million today.

And while the NBA has seen a decline in viewership—a trend that streaming has only partly offset—its games and other sports broadcasts remain industry darlings because the long-term decline isn’t as bad as the rest of television.

Therefore, the money continues to flow. Over the past couple of years, we’ve seen the television giant NFL strike $113 billion worth of new deals through 2033. record $5.2 billion earnings this season. Baseball’s new deals are valued at $12.24 billion.

So, with all of this in the books, and the bold and risky structure of MLS’s new global media rights deals, what can the NBA expect in dollar terms from its next round of rights talks?

Last year CNBC informed that sources familiar with the league’s media rights plans have estimated the expected figure at around $75 billion—apparently a significant increase from the current $24 billion. Whether this is purely a negotiation figure proposed to test the wind and the league has a secret lower number it considers acceptable, we’ll have to wait to see.

Patrick Craix, a media industry analyst and former Fox Sports executive, said he believes the NBA’s media rights combined will be worth at least $50 billion if it’s a long-term set of deals like the current relationship.

“I think the NBA is committed to maintaining its established relationships and expanding new relationships,” he said.

Undoubtedly, the league will see a good boost through a deal or deals that are expected to be a mix of traditional linear TV and streaming, perhaps with creative elements including social media highlights, data, betting and more that could appeal to different audiences.

The NBA declined to comment.


The NBA’s current deal with ESPN and Turner runs through the 2024-2025 season and is worth about $2.4 billion a year to the league. (Ron Chenoy / USA Today)

We know the league could benefit from the media rights deals negotiated over the last couple of years, leaving broadcasters or tech giants with few top-tier sports venues left. The tides lift all boats, even if there is only one left.

“Relatively few top sports venues will hit the market in the next few years,” said Lee Burke, president and CEO of Scarsdale, a New York-based consulting firm LHB Sports, Entertainment & Media Inc. sports media company, you should be focused on the NBA.”

He didn’t give a dollar estimate of what the NBA could get, but agreed that it would be a noticeable increase.

“We expect a multiple increase in media revenue for the NBA,” Berke said. “This is a highly desirable property that attracts a significant number of viewers, especially younger viewers. It will be a very aggressive market.”

Media consultant Ed Desser, a former NBA executive who negotiated television rights deals for teams from several major league teams and organizations, said the MLS deal was a “landmark” for the sports broadcasting industry and noted that several elements could influence how the NBA structures its next media deals.

He predicts there will be more streaming, perhaps centralized game production, and NBA League Pass could be included in national deals in some way. And the image of Apple as a legitimate potential sports media partner is further solidified.

However, there is still a little time before the NBA has to make new deals, and it is impossible to know what changes will happen in the meantime with technology, viewer habits, broadcast industry consolidation, the economy, etc.

“Existing contracts with the NBA run for three more seasons, so there will be further developments in the industry during that time,” Desser said. “The NBA has a very digitally savvy and youth-focused fanbase, so its digital rights spinoff will be especially important, unlike, say, MLB, which has made some significant streaming deals nonetheless. The timing could be perfect for the NBA as some additional deals will be done by then, especially for the college conferences and NASCAR.”

Unlike the MLS, most NBA team-level revenue comes from regional sports network rights deals in their local markets, a model also used by MLB and the NHL due to their large game inventories. MLS local rights deals were modest financially. A few years ago, the MLS ordered its teams to end any local rights deals by this season in order to be able to sell all of the league’s local, national and global rights in a package. This is exactly what happened to Apple, led by Gary Stevenson, who is MLS Deputy Commissioner and President of MLS Business Ventures and led the deal.

“Stevenson was astute to match all national and local deals to be final. This gave him the opportunity to offer a critical mass to local and national players around the world. The NBA has a much higher starting threshold, many ongoing local deals that last ten years or more, and a well-established international presence,” Desser said.

The NBA is expected to continue to use a mixed model of individual deals with local, national and international media.

“Because the league allows teams to own the rights to games that are not nationally licensed, I don’t see an Apple-MLS-style deal to fit their current configuration,” said Curt Pires, founder and president of Charlotte. based on media management and consulting CAP Sports Group. “That may change, but not now. This is forcing copyright holders to rethink the rights of local teams and how to maximize them in the future if they can be merged. Rethinking how to maximize local broadcasting rights will be paramount, especially with potential expansion on the horizon.”

There is also a significant difference between the MLS and the NBA: Major League Soccer, which was launched in 1996 as the fifth major men’s league in the United States, is not the most popular professional league in its sport in the United States – the British Premier League and the Mexican Premier League. Liga MX attracts a large American football audience.

The NBA is by far the most popular basketball league in the world. And it will help him get more money, even if his next set of trades reflects what MLS has done this week.

Why traditional media companies – ESPN/ABC owned by Disney, Turner Sports owned by Warner Bros. Discovery, etc. want to watch sports and are willing to pay huge sums for them is not a mystery: people still watch them, and networks know they can sell this airtime to brands at a premium price (and use attention-grabbing sports TV shows and streams to promote other programs). This model still works, even though people watch less TV overall.

Deals with tech companies have different business goals, Craix said. Amazon is using its sports offerings to lure people into its e-commerce and on-demand video business. Apple is using sports to encourage customers to buy new devices and services (and you can expect the MLS streaming service to come bundled with these Apple products).

Apple is a device maker, Craix said, and sports deals will never replace that.

“The media business should serve this,” he said. Apple or Amazon may be bidding on NBA media rights because they believe bundling games with their core products and services will nudge the profit needle.

These tech giants can certainly afford to exercise more, with Apple’s 2021 revenue of $365 billion and Amazon’s of $469.8 billion.

Whatever the NBA ends up doing, Craiks said he expects to see more streaming and possibly multiple partners, but nothing as radical as MLS-Apple TV.

“Streaming will be off for a little while longer,” Craix said. “I don’t believe a full MLS turn to an Apple system is what you’ll see in the NBA.”

(Top photo: Kyle Terada/USA Today)

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