NBA looks to the future

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The 78th season of the NBA is here, and while there are many exciting stories on the court, the biggest story in professional basketball lies off the court. The NBA is soon going to face a crucial decision that arises approximately once every 10 years: which companies will have the privilege of broadcasting its games?

Media rights negotiations are of utmost importance for sports leagues, as they directly impact players, team owners, business partners, and fans. With the NFL, MLB, and NHL already securing long-term deals, the NBA is the last major U.S. sports property available, coinciding with the rise of the streaming era.

Currently, Disney (ESPN/ABC) and Warner Bros. Discovery (TNT) pay the NBA $2.7 billion annually to broadcast national games under the agreement signed in 2014. This agreement expires after the 2024-25 season, along with the NBA’s international and local deals. This presents an opportunity for the league to navigate a vastly different media landscape than in 2014.

Technology giants have become prominent players in the media rights space, and streaming viewership has surpassed cable. Consequently, what used to be a relatively straightforward decision for the NBA has become more complex. Questions such as the number of games on TV versus streaming, the nature of broadcasts on streaming platforms, and how to cater to different age demographics now arise.

Though the NBA cannot formally negotiate with new partners until April, preliminary talks are already happening. Reports suggest that the NBA aims to triple its 2014 deal, seeking around $7-8 billion annually. Streaming companies like Amazon, Apple, and Google are actively involved, with Netflix even making a potential bid after announcing its first live sports event next month.

It is expected that Disney and Warner Bros. Discovery will continue their relationship with the NBA, although they may opt for smaller packages. NBC, which had been away from the NBA for over two decades, may also enter the bidding war, while Fox and CBS cannot be ruled out.

These negotiations hold immense significance because they occur infrequently and have a substantial impact on league revenue. The NBA generated over $10 billion in revenue for the 2021-22 season, and nearly 30% of this came from Disney and Warner Bros. Discovery. Media rights are the primary revenue source for the league, surpassing ticket sales, sponsorships, and merchandise.

Back in 2002, the NBA shifted its games from over-the-air TV (NBC) to cable (ESPN/TNT), playing a pivotal role in the rise of cable TV. Now, after two decades, the league finds itself at the forefront of another revolution.

NBA Commissioner Adam Silver outlined four key areas of focus when considering future media partners: Reach, Viewer Experience, Discoverability, and Accessibility.

1. Reach: The NBA recognizes the importance of streaming in reaching a younger audience. However, the league still plans to have a significant presence on traditional broadcasters like ABC, NBC, CBS, and Fox, along with cable networks like ESPN and TNT. Silver believes that a hybrid model combining traditional platforms with streaming is the way forward.

2. Viewer Experience: Silver is excited about the potential for reinventing the live sports broadcast experience. He envisions unlimited audio feeds, various camera angles, sports betting integration, merchandising, and immense customization and personalization options for viewers.

3. Discoverability: The fragmented TV and streaming landscape makes it challenging for fans to find live games. Silver acknowledges this issue and suggests that improving discoverability should be a priority. The NBA may prefer adding a single additional media package rather than two more to ease the process of finding games.

4. Accessibility: Silver underscores the significance of making games easily accessible for fans. By simplifying accessibility, such as allowing games to start with a single click from a lock screen or enabling personalized notifications, the NBA aims to boost viewership.

Now that we understand the NBA’s priorities, let’s explore the potential partners who can help achieve these goals.

TV Contenders:

– Disney: ESPN intends to retain a package similar to their current one and is unlikely to concede ground easily.
– Warner Bros. Discovery: While CEO David Zaslav suggests a possible change in their deal, their longstanding partnership makes it improbable for them to reduce their role significantly.
– NBC: With its history of airing NBA games, NBC has the flexibility to offer a compelling package across USA Network and Peacock. It is also speculated that an NBA program similar to “Sunday Night Football” could be launched.

Streaming Contenders:

– Amazon: Prime Video has proven itself as a major player in streaming sports content…

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