Broadcasting rights money has been the lifeblood of American sports for decades, and Tuesday’s news revealed that Major League Soccer landed A $ 2.5 billion 10-year global deal with Apple Inc. is the ultimate boon to a national championship.
It is fair to ask how MLS‘ unique relationship with Apple – the deal will put most of the league games behind paywalls as part of an upcoming streaming service, with some non-exclusive deals for mainstream TV shows still on the way – will impact future rights deals for other leagues.
especially the national basketball federation.
The NBA is the latest of the top five U.S. men’s leagues to line up for new media rights deals. It currently has two primary TV deals with ESPN and Turner Sports, which will total $ 24 billion by the end of the post-2024-25 deals.
Since these deals were announced in 2014 (they went into effect in 2016), new technology and changing consumer habits have churned out the landscape of the television industry. We are now immersed in the so-called streaming wars being fought by legacy networks and tech giants like Apple and Amazon, and we are also well embedded in the cable cutting trend of US pay-TV families (cable and satellite). hat) plummet from more than 100 million a few years ago to around 70 million today.
And while the NBA has seen his The television audience is declining – a trend that streaming has only partially compensated for – its games and the rest of live sports remain the industry treasure because centuries-old declines aren’t nearly as bad as the rest of TV.
So the money keeps flowing. For the past couple of years we have seen the TV giant NFL to command $ 113 billion in new deals by 2033 NHL said his new deals with ESPN and Turner helped power A Record of $ 5.2 billion in this season’s entries. The new baseball deals are worth $ 12.24 billion.
With all this on the books and with the bold and risky structure of MLS ‘new global media rights deals, what can the NBA expect from its next round of dollar rights talks?
CNBC last year reported that sources familiar with the league’s media rights plans have estimated the expected figure at around $ 75 billion, an apparent significant increase from the current $ 24 billion. If this is just a trading number that has been rolled out to test the wind, and the league has a smaller secret number that it deems acceptable, we’ll have to wait and see.
Patrick Crakes, a media analyst and former Fox Sports executive, said he believes the NBA’s combined media rights would amount to at least $ 50 billion if it were a series of long-term deals like the current relationships.
“I think the NBA is trying to keep its established relationships and expand new ones,” he said.
It is certain that the league, as part of a deal or arrangement that should be a mix of traditional linear TV and streaming, possibly with creative elements like social media highlights, dates, bets and more that are different could attracting target groups, one gets a nice pay raise.
The NBA declined to comment.
The NBA’s current contract with ESPN and Turner lasts for the 2024-25 season and pays the league approximately $ 2.4 billion annually. (Ron Chenoy / USA Today)
We know the league will benefit from media rights deals reached in recent years, which leave few high-profile sports properties for broadcasters or tech giants to pursue. Rising tide lifts all boats even if there is only one boat left.
“There will be relatively few top-tier sports properties in the next few years,” said Lee Berke, president and CEO of Scarsdale, a New York-based sports media consultancy LHB Sports, Entertainment & Media Inc. sports club must focus on the NBA ”.
He didn’t offer a dollar estimate of what the NBA could achieve, but he agreed that it will be a significant increase.
“We anticipate a multiple increase in media revenue for the NBA,” Berke said. “They are a highly sought after feature that generates a significant number of spectators, especially young people. It will be a very aggressive market ”.
Media consultant Ed Desser, a former NBA executive who has negotiated TV rights deals for teams from several major league teams and organizations, said the MLS deal was a “milestone” for the entertainment industry. sports broadcasts, noting that some elements could affect the NBA’s structured its upcoming media deals.
He predicts there will be more streaming, perhaps centralized game production, and that NBA League Pass may be tied in some way to national deals. And the idea of Apple as a legitimate potential partner for sports media continues to consolidate.
However, there is still some time before the NBA has to finalize its new deals and it is impossible to know what changes will happen during that time in terms of technology, viewer habits, consolidation of the television industry, economy, etc.
“The existing NBA deals still have three seasons left, so there will be further developments in the industry during that time,” Desser said. “The NBA has a young and very digitally savvy fan base, so their granting of digital rights will be particularly important, on the contrary, for example, of MLB, which has nonetheless secured several significant streaming deals. The timing of the NBA may prove to be ideal as some additional deals, particularly for college conferences and NASCAR, will be in place by then. “
Unlike MLS, the majority of NBA team-level revenue comes from regional sports network rights deals in their local markets, a model also used by MLB and NHL due to their large game stocks. Local MLS rights agreements were financially modest. A few years ago, the MLS ordered its teams to end all local rights deals up to this season so that all of the league’s local, national and global rights could be sold in one package. And that’s exactly what it did with Apple, led by Gary Stevenson, MLS deputy commissioner and president of MLS Business Ventures, who spearheaded the deal.
“Stevenson was smart in aligning all national and local agreements to have a common financial statement. This gave him the leverage to offer local and national critical mass to a global player. The NBA has a much higher starting bar and many existing local deals that last a decade or more and a well-developed international operation, ”Desser said.
The NBA is expected to continue its mixed model of contracts with separate local, national and international media.
“As the league allows teams to own the rights to games that are not licensed nationally, I don’t see an Apple-MLS-style deal consistent with their current setup,” said Curt Pires, founder and president of management. of media outlets based in Charlotte and consulting firm CAP Sports Group. “This may change, but not at the moment. It causes rights holders to reconsider the rights of local teams and how to maximize them in the future when they could be grouped. Rethinking how to maximize local broadcast rights will be at the forefront, especially with potential expansion on the horizon ”.
There is also a big difference between the MLS and the NBA: Major League Soccer, which started in 1996 as America’s fifth men’s major league, is not the most popular professional league in its sport in the United States: the British. First League and the Mexican Liga MX appeal to a wider American football audience.
The NBA is by far the most popular basketball league in the world. And that will help him get more money, even if his upcoming deals mirror some of what MLS has been up to this week.
Why do traditional media companies – Disney-owned ESPN / ABC, Warner Bros. Discovery-owned Turner Sports, etc. – They want live sports and are willing to pay princely sums for this is no mystery: people watch them and networks watch them all time nor do they know they can sell that airtime to brands at premium prices (and use sports shows and mind blowing streams to promote other programs). This model still works, even though people watch TV less in general.
Agreements with tech companies have different business goals, Crakes said. Amazon uses its sports offerings to drive people to its e-commerce and video on-demand business. Apple uses sport to get customers to buy new devices and services (and you can expect the MLS streaming service to be bundled with those Apple products).
Apple is a device maker, Crakes said, and sports offerings will never replace it.
“The media industry has to work for this,” he said. Apple or Amazon may bid on NBA media rights because they believe merging games with their core products and services will move the winning needle.
These tech giants can certainly afford to engage in more sport: Apple posted $ 365 billion in revenue in 2021, while Amazon’s was $ 469.8 billion.
Whatever the NBA does, Crakes said he expects more streams and likely more partners, but nothing quite as radical as MLS-Apple TV.
“Streaming is stopped even further,” Crakes said. “I don’t think the full transition from MLS to Apple is what you will see in the NBA.”
(Photo above: Kyle Terada / USA Today)
