Professional sports leagues, in my opinion, are often guilty of lacking foresight. The NBA isn’t in that camp, currently, after its new television deal with the Bally Sports-branded regional sports networks.
The deal includes the company paying 16% less on its television rights deals, with the NBA getting out of its contracts at the end of the season. The timing isn’t a coincidence. The league is about to negotiate a new national TV deal, and having the local TV rights, or more specifically the streaming rights, to use as a deal sweetner should be would nice to have.
The league is apparently interested in a “hybrid” situation, where traditional television would still be available to over-the-air and regional sports networks. Conversely, the streaming rights for the league would be available on a national basis for a service like ESPN+, Amazon Prime Video, Peacock, and AppleTV+.
if we can deliver scale or deliver a critical mass and maybe even include it as part of a national arrangement we’re negotiating right now, those opportunities are very intriguing,” NBA President of Global Content and Media Distribution Bill Koenig said.
My immediate question when reading the comments from Koenig was: who the hell would agree to that?
The league is looking out for itself by trying to get a huge rights fee. That’s its job. The only way to get to the extraordinary rights fees the league is trying to garner is by dividing and conquering. But at the same time, how many over-the-air or regional sports network suitors are there going to be if the games are going to be available for an affordable price on Peacock or ESPN+? Why would those TV groups agree to that deal? Similarly, why would the streaming platforms agree to a deal that competed with local over-the-air or regional sports networks for eyeballs?
The NBA is going to be seeking billions for the streaming package, and rightfully so. The league has done a great job turning into a national product, which has been helped by its current national TV partners TNT and ESPN/ABC. But with TV companies being increasingly frugal, which company is going to shell out billions upon billions for a non-exclusive package? And it’s not even a non-exclusive package, it’s half of a non-exclusive package! It would be like buying into a pizza restaurant, but only getting the revenue from the subs and salad sales. Does that sound like a great business deal to you? No? Now, imagine that the asking price has two commas in it.
I can’t fault the NBA. It has huge aspirations and an eye toward the future. That should be commended, not condemmed. Also, I think it’s probably likely that the Association agrees to a similar deal pitched, with teams still striking deals with local TV partners, with the league selling the streaming rights as part of an overall package.
But when those deals are struck, I’ll ask for preemptive forgiveness in my reaction, because those will be business deals that we’ll look back at with a “Can you believe how stupid (insert company here) was with that NBA deal?” It’s a great deal for the league, but I don’t know how wise or practical of a decision it would be for media companies.
Garrett Searight is Barrett Media’s News Editor, which includes writing bi-weekly industry features and a weekly column. He has previously served as Program Director and Afternoon Co-Host on 93.1 The Fan in Lima, OH, and is the radio play-by-play voice of Northern Michigan University hockey. Reach out to him at Garrett@BarrettMedia.com.
