The NBA’s New Media Deals — First of the Next: John Kosner’s Latest SBJ Column with Ed Desser
Original Article: Sports Business Journal, by John Kosner and Ed Desser, July 29th, 2024
We weren’t surprised that the NBA got “those deals!” — almost triple its current agreements — not when there’s:
Competition. This was the NBA’s first true competitive bidding since 2002, when ABC/ESPN grabbed NBC’s lead package. And, for the first time, there was bidding interest in streaming rights, too. This dynamic played out with the new entrants:
Comcast/NBC will offer the NBA much broader exposure by moving two weeknight games, and substantial playoffs, to NBC broadcast while also using the NBA to drive its Peacock streaming service; and, Comcast’s crucial mother lode, high-speed data business. For Comcast, more sports streaming equals more data demand, and higher-priced broadband packages. Look for additional 4K, sub-second latency, and real-time wagering — all for a price. Comcast can potentially help offset some of its new $2.5 billion annual NBA rights commitment with an adjustment in the subscriber fees it pays for an apparently NBA-less TNT, while making NBC and Peacock more valuable to both distributors and subscribers.
Amazon is mirroring NBC’s NFL/NBA calendar, and brings the league more subscribers today than cable. And it may also move to replace or complement Diamond Sports (and other RSNs) as the hub for local NBA team broadcasts, further enhancing Prime Video’s position as a sports destination.
More being sold. The NBA is adding a third partner for the first time in 40 years (the NFL now has seven) by selling Amazon or WBD one or two nights, In-Season and Play-In Tournaments, Digital League Pass, streaming, and international rights, provided the NBA can ultimately deliver the accepted deal, which may be legally contested by WBD.
The 11-year term. The 2.9x increase is massive, but remember, we’re talking about a total 20-year span from when the NBA’s current deals started and the new ones end. The 2025-26 season will be the NBA’s first major annual rights jump in nine years, and that adjustment was the first quantum increase since 1998, 26 years ago. Deal-over-deal, this fittingly represents about an 11% CAGR, partially a result of the need by challengers to overwhelm incumbent TNT’s matching rights.
The ascendancy of streaming. The NBA has what streamers want — unique, branded, exclusive, and popular programming for eight months of the year, with its biggest and most-watched prime-time, postseason games occurring outside football season. A true churn-buster! It’s crucial to Disney’s streaming platforms, Amazon, and Peacock. In a subscription world, months of content matter! Plus:
Advertising ... for all. The NBA is a major advertising business that attracts a consistently sizable, engaged audience that watches live on specific dates and times — increasingly, the only content advertisers will pay a premium for. This is important for ABC/ESPN, NBC, and TNT. Perfect timing for Amazon, too, which recently introduced ads for all Prime subscribers who don’t elect to pay more, plus there is no opt-out for live, in-game sports ads!
The young demos. The NBA is among the biggest social media sports — its stars are on a first-name basis with young audiences globally, on YouTube, Instagram, and TikTok, where streamers recruit viewers. The NBA is hip, culturally relevant, and skews young, unlike most all linear TV entertainment and news programming. The NBA’s regular-season ratings have maintained, while linear entertainment’s have collapsed. Indeed, the analyst Doug Shapiro makes the point: The most valuable sports rights are gaining at the expense of entertainment content spending.
The outlook
The NBA is the last in the current cycle to finally add an all-digital package. But we also see these NBA deals as the “first of the next” wave, as cable has now crested (e.g., no games for NBC’s USA Network or apparently TNT). Meanwhile, the regional sports business is also challenged:
NBA regular-season games will now be featured in prime time every night on NBC/Peacock, ABC, ESPN, and Prime Video. This is both a massive exposure boost for the league and a management challenge for everyone. Fans complain today that the games are hard to find. For this to work well, the NBA and its players will have to make these games even more compelling, and the NBA must work with its partners to balance new inventory across (at least) three major sales organizations, while making the viewing experience more seamless. Can you say: “NBA App?” In the NBA’s regular season, amazing things happen every night, but it’s hard to predict in which games. Flexibility will be important, as is the broadcasters’ willingness to show the best games, not just the biggest markets. Going forward, Oklahoma City and San Antonio are rising.
The NBA has established a 12-month content calendar with the rise of the WNBA and Summer League. USA Basketball might have snubbed Caitlin Clark (for now), but new partner NBC can be expected to spotlight the NBA and WNBA Dream Teams at the Paris, Los Angeles, and Brisbane Olympics.
We expect that this lineup will soon come with a next-gen TV world feed, inspired by COVID “bubble” learnings.
Our increasingly fragmented media world rewards strong, centrally managed enterprises. The NBA has long been a well-run originator of many of sports’ best practices. That track record matters, too. Relationships are critical, but it’s the people (think Ted Turner, Dick Ebersol, and Mark Lazarus), not just companies, that count.
Finally, whither “Inside the NBA,” one of the best TV shows in sports history — also one of the most valuable non-live-game properties in sports media? Could it move? Might Charles Barkley unretire? Quoting Marv Albert on both: “Yes!”
Our former boss, the visionary David Stern, deserves credit for setting the league on this path decades ago, helping make today’s reset possible 4 1/2 years after his death. These new deals with Disney, Comcast/NBC, and Amazon firmly establish the NBA as the No. 2 U.S. sports media property, only behind the NFL. Is an NFL rights re-opener in five years now inevitable?
Ed Desser is president of consultancy Desser Sports Media Inc. (www.desser.tv). John Kosner is president of consultancy Kosner Media (www.kosnermedia.com). Together they developed league TV strategy and ran the NBA’s media operations in the ’80s and ’90s. Ed negotiated every national TV deal during his tenure from 1982-2005. John participated in most of those negotiations, first at the NBA, and then at ESPN through the current deal.
