America’s top professional and college sports leagues have been living on easy street for the last ten years. Whenever their broadcast rights come up for negotiations, the NFL, NBA, NHL, Major League Baseball, the SEC and the Big Ten have been able to count on a line of bidders eager to get in on the action.
That party may be close to over though. Amin Elhassan of Meadowlark Media said last week that Mark Cuban may be the first to see it and that is why he is ready to sell off his majority stake in the Dallas Mavericks.
“That whole streaming money that everyone’s been talking about for years, like, ‘oh, when this next TV deal is up, it doesn’t even matter if Disney and Turner aren’t ponying up.’ ‘Oh, Amazon and Netflix are going to come in and just dump billions of dollars,’” he told co-host Charlotte Wilder on their Oddball podcast. “That’s not been the case. So I think Mark Cuban’s looking and he’s saying, ‘oh, this is the bubble and the bubble is about to burst.’”
He then pointed out that everyone in the NBA should be concerned if Cuban is the one with that vision. The now-former Shark Tank star has a good track record of identifying the ideal time to bail.
“He founded this thing called Broadcast.com,” Elhassan explained. “They pioneered the technology that allows people to stream video on the Internet. The reason why you’re able to watch anything on your phone, tablet or computer is because Mark Cuban and the company that he founded. He founded it and he sold it and within a few months, the dot com bubble crashed and that he made out like a bandit and everybody else was like Pets.com. ‘Ahhhh! We broke!’ So I definitely to me, it feels like the ship be sinking and ‘let me get off before everyone starts to figure it out and clamor.’”
Now, it should be noted that Cuban was recently asked about keeping the Mavericks a family business and passing control of the franchise down to his kids one day.
“I wouldn’t put them through it,” he said on a recent edition of All the Smoke. He then went on to explain that team owners need to court investments from real estate developers.
“That’s where the money is going be coming from potentially,” citing expensive real estate deals like the ones to get new areas for the Golden State Warriors and Los Angeles Clippers.
It’s very possible that Cuban doesn’t see the single majority shareholder model as a viable way to own and run a team anymore. It’s also possible he just wants to enjoy being rich and not have as many responsibilities. It was on that same episode of All the Smoke that the 65-year-old revealed his time on ABC’s reality show Shark Tank is coming to an end.
But this is a sports media site. We pour over rights deals and potential deals looking for justification or game changing strategy. Let’s dive into the idea that Cuban sees a bubble that is about to burst.
If Amin Elhassan is right, and that is indeed how Cuban feels, he is not alone. 97.1 The Ticket’s Mike Valenti said the same thing earlier this year, although his prediction was less about the demand diminishing and more about customer dissatisfaction with the product.
Valenti’s point is that leagues’ rights will not hold their value if the streamers and networks they sell to make it hard for fans to see the games. The NFL is putting playoff games behind a paywall. Regular season action in Major League Baseball, the NHL, and college sports are already there.
Puck News founder and former editor of The Hollywood Reporter Matthew Belloni disagrees. He told me that the willingness to allow some big games to be streaming exclusives actually makes a league’s rights more valuable to media companies in 2023.
“There’s a big push in the entire streaming industry right now to raise profits, even at the expense of growing subscriber numbers and usage,” he told me via email. “Using premium sports, the top driver of subscription and engagement, to increase profitability, makes perfect sense. All these games *should* be behind a paywall. Thats where they will benefit their broadcaster most, even if the leagues might want greater accessibility.”
Cuban and other owners are yet to settle on new broadcast deals for the NBA. Commissioner Adam Silver may have been overly optimistic in insisting that the league could triple its current revenue in its next TV rights deals, but he and team owners have been willing and eager to look at new revenue streams and more modern broadcast deals in order to help them get there.
Still, it’s hard not to think about two outlets when it comes to the NBA on TV – ESPN and TNT. Maybe other networks will get involved in the bidding, but at this point, it is hard to picture a world where those outlets and ABC are not airing NBA games.
Do Disney’s plans for the future of ESPN inch us closer to a bubble bursting for media rights deals? If the network will be a streaming product by 2025, will Bob Iger and Jimmy Pitaro be more conservative with what they are willing to spend money on and how much they are willing to pay?
I asked Belloni if he expected the company’s projections for what ESPN can generate as a streaming product are more likely to make it less agressive with the NBA and other rights deals in the short term.
“It’s not a question of aggressive vs frugal, it’s what does Disney need to compete in sports,” he said. “Iger has said he wants ESPN to be available on streaming by 2025, which isn’t that far away.”
He added that it doesn’t mean that competition stops. Other networks and streamers want in on the NBA. There are major commitments to the NFL, the SEC and others that Disney has to honor as well. Iger and Pitaro are not going to let those get away. They have to sustain the brand’s value no matter what form the network takes.
“Renewing top tier rights like the NBA will be key to that push because ESPN will be an expensive product, but he also should expect less revenue in the short term because making ESPN available digitally will exacerbate cord cutting,” Belloni said. “Hence why he is looking for a deep-pocketed partner to invest in ESPN and help defray the costs of those rights packages.”
Amin Elhassan is an incredibly smart guy. He didn’t simply see Cuban’s sale announced and jumped to the conclusion that a rights bubble is about to burst and he did a great job of explaining that.
He did leave out the part about who is buying Cuban’s stake in the Mavericks and what she plans to do with it.
Miriam Adelson is a Republican mega donor and widow of casino magnate Sheldon Adelson, who’s Las Vegas Sands Corporation built three resorts in Las Vegas and seven other properties across Asia.
Sports gambling has become a right versus left issue in Texas, with Republicans coming down on the side of “ain’t gonna happen.” Adelson’s investment in the Mavericks is said to include plans for an entertainment and casino complex near Dallas.
Mark Cuban may be “down to Earth for a billionaire,” but he is still a billionaire obsessed with his public image. Remember how furious he was with Draymond Green in 2017 when the Warriors’ star said that the term “team owner” invoked the unpleasant idea of one person owning another? Cuban is not completely abandoning the team. He will continue to run basketball operations in Dallas. If he really saw a rights bubble that was about to burst, it seems more likely that he would want to put as much distance as possible between himself and the perceived failure.
This deal is not about Cuban’s projections for sports media’s future. It is about Miriam Adelson recognizing an opportunity to wield political influence and add a few billion to her net worth.
Demetri Ravanos is a columnist and features writer for Barrett Media. He is also the creator of The Sports Podcast Festival, and a previous host on the Chewing Clock and Media Noise podcasts. He occasionally fills in on stations across the Carolinas in addition to hosting Panthers and College Football podcasts. His radio resume includes stops at WAVH and WZEW in Mobile, AL, WBPT in Birmingham, AL and WBBB, WPTK and WDNC in Raleigh, NC.
You can find him on Twitter @DemetriRavanos or reach him by email at DemetriTheGreek@gmail.com.
