Every free agent in the NBA has had an eye on next summer and the summer after. That explains why LeBron James took a one-year deal with a player option for the second. It is because he, and everyone associated with the league, knew what was coming down the pike.
The market is set and now the league just waits to make the profit and reap the rewards. And they should be quite profitable.
John Lombardo and John Ourand of Sports Business Daily reports ESPN and Turner Sports are expected to renew their television rights deal for a combined amount north of $2 billion. ESPN alone is expected to spend more than $1 billion for the NBA’s television rights. The deal is expected to be completed before the beginning of the season at the end of October.
The deal is expected to mirror the current deal, according to Lombardo and Ourand, with talks so advanced that it is unlikely for a third television package to get carved out. The remaining issues of contention would be the distribution of streaming and digital rights. This appears to be done and little will change on your television.
What will change is off the court.
Two billion dollars is a lot of money. A LOT OF MONEY.
Players and teams were already planning their futures with the idea that there would be a major influx of cash coming into the league, increasing the salary cap and their ability to spend. Players know they will get a big piece of that pie. Thus the positioning throughout this year’s free agency.
The television rights deals are the big frontier for NBA business. It is where the majority of the league’s basketball related income comes. Much of the lockout a few years ago was about putting the owners in a position to make as much money as possible and return profitability to them through this television rights deal.
Now that it is settled, do not be surprised if there is pushback when the collective bargaining agreement expires in a few years and the league and players fight over how to split this very, very large pie once again.
For fans, this is not necessarily good news. While TNT will continue to do its fantastic work, it is disappointing for NBA die hards to see ESPN secure its rights through the exclusive negotiating window. Many NBA fans have been disappointed with the Worldwide Leader’s NBA coverage. Some pressure from an upstart like FOX or a return to NBC could have put pressure on the network to re-invest in its NBA coverage. Maybe that will happen anyway.
Ultimately, though, fans will see very little change, except for maybe higher use fees on their cable bills — a matter for another day.
Yes, the business of the NBA is good and the league is making a healthy amount of money.