James Dolan, the executive chairman and chief executive officer of Madison Square Garden Entertainment and Madison Square Garden Sports, the chief executive officer of Sphere Entertainment and owner of the New York Knicks and New York Rangers, was critical of the NBA’s new media rights deal in a letter shared with the league Board of Governors. Dolan, who has owned the team since the 1990s, was critical of a possible 8% cut for the league officer within the new, proposed $74.6 billion media deal, a national television and streaming package that makes league regional sports networks “unviable.”
The Knicks, who are the second-most valuable team in the NBA, according to valuations from Forbes, are coming off a second consecutive playoff appearance and were led by superstar guard Jalen Brunson. Dolan, who has invested significant money in the team this offseason with the contract extension of Brunson, resigning of OG Anunoby and trade to acquire Mikal Bridges, was critical of the dispersion of revenues in the deal worth a total of $74.6 billion. Dolan drew a comparison to the NFL and the way it distributes revenue obtained from its media rights deals, which reportedly equate to more than $12 billion annually.
“The NBA has made the move to an NFL model – deemphasizing and depowering the local market,” Dolan said. “Soon, your only revenue concern will be the sale of tickets and what color next year’s jersey will be. Don’t worry, because due to revenue pooling, you are guaranteed to be neither a success nor a failure. Of course, to get there, the league must take down the successful franchises and redistribute to the less successful. This new media deal goes a long way to accomplishing that goal.”
Within the letter, Dolan compared the percentage of remuneration the league retains in the new media rights deal, outlining an increase from $15 million (0.5%) for the 2024-25 season to $358 million thereafter. Additionally, Dolan stated that the league would plan to retain $6 billion (8%) of total-NBA related fees in the deal. The augmentation in the latter monetary figure lacks “sufficient justification,” he said, along with no transparency pertaining to the allocation or utilization of such revenue. Dolan also explained that the deal would negatively impact local sponsorships and include a diminution of “camera-visible benefits” by approximately 20% to what had been provided historically.
The Ch. 11 bankruptcy of Diamond Sports Group, which has continued for more than a year, has been among the examples outlining the demise of regional sports networks. Several teams have left the traditional RSNs and partnered with free, over-the-air broadcast networks concurrent with consumers leaving traditional paid television. Moreover, some cable distributors have altered the tier at which regional sports networks are carried as other companies move out of the RSN business entirely.
“Member teams depend on revenue received from local rights fees and on increased fan engagement through high quality broadcasts that provide dedicated and tailored coverage for local audiences,” Dolan said. “Yet the proposal threatens to completely eliminate [regional sports networks] without a comparable replacement offered by the league and no articulated plans to address the production and distribution vacuum that the league will inevitably create in its quest to further disrupt the RSN industry.”
Dolan divulged that MSG Network has had a 45% decline as 42 million homes have abandoned traditional cable over the last eight years. Sources told Tom Friend of Sports Business Journal that the Knicks could be forced on up to 18 exclusive national TV broadcasts in the 2025-26 season, up six games from the current apogee. Moreover, the report divulged that the league plans to negotiate a deal with Amazon or Apple to potentially take local TV packages depending on which teams want to be involved and the status of the Diamond bankruptcy case.
“The increased number of exclusive and non-exclusive games means that national partners would have the ability to air nearly half of the regular season and all postseason games,” Dolan said. “This reduction in available games for RSNs risks rendering the entire RSN model unviable. The inclusion of streaming partners in the proposal (e.g., Amazon Prime Video, Peacock) allows fans in all NBA markets to bypass their RSN to watch certain games in their local market. The proposal offers no local protections for RSNs.”
The league’s current media rights deal with The Walt Disney Company’s ESPN and Warner Bros. Discovery’s TNT Sports expires at the conclusion of the 2024-25 season. Warner Bros. Discovery is expected to attempt to match Amazon’s $1.8 billion package, according to John Ourand of Puck News, arguing that the combination of Max and its linear television channels can equate to the reach of Prime Video. Over the last several months, Warner Bros. Discovery has added media rights for the Big East Conference and French Open, along with sublicensing select College Football Playoff games from ESPN and revamping its truTV programming lineup. The NBA Board of Governors is reportedly expected to vote Tuesday on the new 11-year media rights deal.
