With the dust just starting to settle on the NFL’s $113 billion media rights windfall, the NBA is reportedly looking for its own massive payday.
According to CNBC, the early talk in NBA circles is that the league could seek as much as $75 billion in media rights fees in its next negotiations. The current deals with Disney (ESPN) and AT&T (Turner Sports) — worth $24 billion — do not expire until after the 2024-25 season. On a per year basis, $75 billion would amount to $7-8 billion over the current nine-year contract terms. Given the length of NBA media deals has grown from four years (1998) to six (2002), eight (2008) and now nine (2016), it would seem likely that a new deal would last longer. The NFL deals announced last week run for 11 years, though the league can opt out after seven in 2029.
Under an 11-year term, $75 billion in rights fees would average out to around $6.8 billion per year. Under the current deals, which average out to $2.7 billion per year, ESPN pays around $1.4 billion and Turner $1.2. Keeping that same split, ESPN would pay around $3.6 billion and Turner $3.2.
The NFL’s media rights deals, per Sports Business Journal and the New York Post, amount to $113 billion over 11 years, or just over $10 billion/year. That includes $2.7 billion per year for Disney, $2.25 billion for Fox, $2.1 billion for CBS and $2.0 billion for NBC. Disney’s deal is an increase of 35% over its current $1.9 billion/year contract, while Fox, CBS and NBC are doubling their previous deals. Exact figures for Amazon’s portion are not yet known.
Barring an unusually lengthy contract term — or a third or fourth partner joining the mix — not only would ESPN and Turner have to pay more money for NBA rights than any network pays individually for the NFL, but they would have to more-than-double their annual rights fees to get the league to the $75 billion mark. Keep in mind that Disney balked at the NFL’s desire to double its rights fee to nearly $4 billion/year, and per reports was successful in keeping the price tag below $3 billion.
As has been well-documented, last year’s months-delayed NBA Finals hit a record-low in the ratings, but the NBA has since been joined in the Nielsen cellar by the World Series, Masters, Golden Globes, Grammy Awards and more, with the Academy Awards almost certain to be added to the list should it take place next month.
With NFL rights rising dramatically despite that league’s own historic lows — albeit not nearly as severe as those suffered by other properties — it is increasingly clear that the networks are less concerned about where ratings stack up historically than where they stack up versus the competition. On that front, collapsing viewership elsewhere means that the NBA has by and large retained its position in an increasingly arid television landscape.
It is entirely possible that by the time the NBA’s deals come up for renewal in the next few years, ESPN and Turner could face competition that did not exist when the previous deals were negotiated in 2014. Amazon is now clearly a player, and the networks now have streaming platforms to build up (the NBA’s current deals allow for ESPN and Turner to air games via an over-the-top platform, though neither has taken the opportunity as of yet). Whether any of those factors add up to $75 billion remains to be seen.
