The NBA is the last of the major pro sports leagues who find their television package up for bidding and the last to cash in on the explosion in sports rights fees.
With the negotiations ongoing, it’s looking more and more likely that the status quo will be kept in place and the league will re-sign with ESPN and Turner Sports. John Ourand, who is the czar of sports media rights deals reporting, teams with John Lombardo in Sports Business Journal to report that the NBA should have the ink signed on a new contract with ESPN and Turner before the season begins next month.
And as has been the case across the television industry, the price of poker is going up. Wayyyyyyyyy up. In fact, the NBA should more than double their current TV revenue to over $2 BILLION per season:
The NBA and its network partners expect to reach an agreement in principle on new long-term media deals by the start of the regular season, according to sources on all sides of the discussions.
Talks have progressed so rapidly that details are emerging on a massive agreement that would see the league’s annual rights fee more than double, with ESPN and Turner combining to pay more than $2 billion per year on average. One source said ESPN already has committed to pay “well over” $1 billion per year, and Turner is not far behind for a media rights extension that would kick in with the 2016-17 season.
As part of the current eight-year deals that end in June 2016, ESPN pays $485 million per year and Turner pays $445 million per year on average, bringing the league’s total take at just less than $1 billion per year.
But that figure would be dwarfed in a new deal that several sources pegged as an eight-year pact, though one source with knowledge of the talks said it ultimately could end up running nine years.
This next rights deal represents a huge opportunity for incumbent rights partners ESPN and Turner Sports to further solidify their place as the home of basketball with their long-term NCAA partnerships. And in reality, the NBA has a great deal with ESPN and Turner, so if it isn’t broke, there’s really no need to fix it. The Finals can stay on ABC, the conference finals on ESPN/Turner, and Turner gets to retain their digital relationship with the league.
There had been rumors that networks like Fox Sports 1 or NBCSN could make a bold, aggressive play to build their live sports portfolio in a big way and carve out a third rights package. However, SBJ reports that there is “little chance” another network will be allowed into the NBA’s playground. Furthermore, in what would be the most interesting development in these negotiations, ESPN is reportedly lobbying the NBA to not make a third package available.
The reasons why are obvious – it’s just as valuable for ESPN to keep NBA rights as it is to prevent a network like Fox Sports 1 from gaining NBA rights. If ESPN can lock FS1 out of the NBA for the next decade, it’s going to give them a significant advantage in maintaining their deathgrip over the sports world, especially in the winter months. Perhaps that’s worth even more than the billions the network will pay the NBA to televise their games.