Broadcast rights money has been the lifeblood of American sports for decades, and Major League Soccer Tuesday news landing The $ 2.5 billion global deal with Apple Inc. for 10 years is the latest plunge in the domestic league.
How wondering is fair MLS‘ Unique relationship Contract with Apple — This contract puts most of the league’s games behind the paywall as part of future streaming services. Traditional television broadcasts still have some non-exclusive contracts — which will affect future rights contracts in other leagues.
In particular, National Basketball Association..
The NBA is the last of five major US men’s leagues alongside new media rights deals. Currently, it enjoys two major television contracts, ESPN and Turner Sports, and will pay a total of $ 24 billion by the end of the agreement after the 2024-25 season.
Since these contracts were announced in 2014 (effective in 2016), the state of the broadcast industry has been shaken by new technologies and changing consumer habits. We are now deeply involved in the so-called streaming wars fought by legacy networks and tech giants like Apple and Amazon. It is also deeply involved in the cord-cutting trend seen in US pay-TV homes (cables and satellites). ) It plummeted from more than 100 million a few years ago to about 70 million today.
And while the NBA is watching it Decline in TV ratings — Streaming tends to be only partially offset — the game and other live sports continue to be the industry’s beloved, as the secular decline isn’t as bad as on other televisions.
Therefore, money will continue to flow.Over the last few years we have seen TV giants NFL Direct new transactions worth $ 113 billion by 2033. NHL He said the new agreement between ESPN and Turner helped fuel. Record $ 5.2 billion Earnings for this season. The new baseball deal is worth $ 12.24 billion.
So, with all of the books, and with the bold and dangerous structure of MLS’s fresh global media rights trading, what can the NBA expect from the next rights negotiation in dollar terms?
Last year, CNBC report Sources familiar with the league’s media rights plan have fixed the expected figure at around $ 75 billion. This is clearly well above the current $ 24 billion. Whether it’s a negotiating figure that’s purely floating for a wind test and the league has a smaller number of secrets that it thinks it’s acceptable, we have to wait to see it. Hmm.
Patrick Krakes, a media industry analyst and former Fox Sports executive, said he believes the NBA’s media rights total at least $ 50 billion for long-term transactions like the current relationship. ..
“I think the NBA is looking to maintain established relationships and expand new ones,” he said.
The league has creative elements that can appeal to a variety of viewers, perhaps social media highlights, data, bets, etc., under one or more transactions that are expected to be a combination of traditional linear TV and streaming. There is no doubt that you will get a great raise by using it.
The NBA declined to comment.
The NBA’s current contract with ESPN and Turner will take place throughout the 2024-25 season, paying the league about $ 2.4 billion annually. (Ron Chenoy / USA Today)
We know that the league is in a position to benefit from the media rights agreements signed over the last two years. This leaves few top-notch sports facilities for broadcasters and tech giants to pursue. Even if there is only one boat left, the ebb and flow of the tide will lift all the boats.
Lee Berke, President and CEO of Entertainment & Media Inc, a sports media consulting firm based in Scarsdale, NY, said: Sports media company, you need to focus on the NBA. “
He didn’t provide a dollar-denominated estimate of how much the NBA could land, but agreed that it would be a remarkable increase.
“We’re seeing an increase in multiples of the NBA’s media revenue,” Burke said. “They are a highly desirable property that produces a significant amount of viewers, especially young viewers. It will be a very aggressive market.”
Former NBA senior executive media consultant Eddessa, who negotiated television rights deals for several major league and organizational teams, said the MLS deal is a “landmark” in the sports broadcast industry, with several elements. He said it could affect the NBA. Build the next media transaction.
He predicts more streaming, perhaps centralized game production, and the NBA League Pass could somehow be incorporated into national transactions. And Apple’s notion of being a legitimate and potential sports media partner is further solidified.
That said, it’s still a while before the NBA signs a new deal, and it’s impossible to see what changes will happen in the meantime due to technology, viewer habits, broadcast industry integration, economy, and more. is.
“The existing NBA contract has three more seasons, and the industry will grow further during that period,” said Desser. “The NBA has a very digitally savvy, young and distorted fan base, so in contrast to, for example, the allocation of digital rights is especially important. MLBNevertheless, we are doing some important streaming transactions. The NBA timing may prove to be ideal. This is especially because university conferences and additional NASCAR transactions will take place by then. “
Unlike MLS, most of the NBA team-level revenue comes from trading rights in the local sports network in the local market. This model is also used in MLB and NHL due to the high inventory of games. MLS local rights transactions were financially modest. A few years ago, MLS ordered the team to abolish local rights trading by this season, allowing all local, national and global rights in the league to be sold together. And it did just that with Apple in an effort led by Gary Stevenson, deputy commissioner of MLS, president of MLS Business Ventures, and lead of the deal.
“Stephenson was wise to jointly close all national and local transactions, which gave him the leverage to provide players around the world with critical mass locally and nationally. Has a much higher starting threshold, many existing local transactions over a decade or more, and well-developed international operations, “said Desser.
The NBA is expected to continue its mixed model of local, domestic, and international media transactions.
Curt Pires, founder and president of Charlotte, said: Based media management and consulting CAP Sports Group. “It can change, but it’s not the case now. It forces rights owners to rethink the rights of local teams and how to maximize them in the future if they are likely to be bundled together. Rethinking how to maximize local broadcast rights will come to mind, especially with potential expansion on the horizon. “
There is also a big difference between the MLS and the NBA. Launched in 1996 as the fifth major men’s league in the United States, Major League Baseball is not the most popular professional league in sports in the United States. Premier League And Mexico’s Liga MX is commanding more American football spectators.
The NBA is the most popular basketball league in the world. And it helps to demand more money, even if the next set of transactions reflects some of what MLS did this week.
It’s no mystery why traditional media companies such as Disney-owned ESPN / ABC and Warner Bros. Discovery-owned Turner Sports want live sports and are willing to pay big sums. We know that we can sell that broadcast time to brands at a premium rate (and use spectacular sports television broadcasts and streams to promote other shows). The model generally works even with less TV viewing.
Dealing with tech companies has a variety of business goals, Crakes said. Amazon uses sports transactions to drive people into e-commerce and on-demand video businesses. Apple uses sports to get customers to buy new devices and services (and you can see MLS streaming services bundled with these Apple products).
According to Crakes, Apple is a device maker and sports trading will never replace it.
“The media business needs to provide that service,” he said. Apple and Amazon believe that bundling games with core products and services will move the needle of profit, so they may bid on NBA media rights.
These tech giants can certainly afford to get more into the sport. Apple reported $ 365 billion in revenue in 2021, while Amazon’s revenue was $ 469.8 billion.
Whatever the NBA ultimately does, Crakes expects to see more streaming, perhaps with multiple partners, but said it’s not as radical as the MLS-Apple TV.
“Streaming is a bit more choppy,” Crakes said. “I don’t think the full pivot to MLS’s Apple system is what you’ll see in the NBA.”
(Photo above: Kyle Terada / USA Today)
