The model of sports business has drastically changed with the advent of the Internet.
Media rights are the main source of income, not attendance anymore. The NFL has become increasingly worried with this. The NBA changed its ticketing and arena modeling to make up for this change in reality. Luxury suites and courtside seats came in for those with the money to be seen. The everyfan was left to the upper reaches of the stadium as they got overwhelmed with amenities and “reasons to attend.”
The money was still in the ability and the right to show the games on television — live sports are still the one safe haven for TV advertisers.
And it is where the NBA is going to become awash with money for many, many years. Just nobody thought it was be this much.
The NBA, according to many reports now, is set to sign a nine-year, $24 billion television rights deal with ESPN and Turner Sports. For viewers, this means little change. For the NBA, it means nearly a tripling of their television revenues.
NBA to announce $24 billion/9 year deal w/ ESPN and TNT on Monday. Annual average value nearly 3x current deal.
— Richard Sandomir (@RichSandomir) October 6, 2014
Annual avg value of new NBA deal soars from about $930M to $2.66B. New deal starts after 2015-16 season.
— Richard Sandomir (@RichSandomir) October 6, 2014
It is unclear yet what this means for the ever-growing digital rights. However, it is reported that ESPN is going to make NBA games available for those without a cable subscription.
This is a whole lot more than was expected for the NBA. A whole heck of a lot more.
What this means for the future is a little more uncertain.
It likely means the salary cap will go up as basketball-related income increases. That means more money for players and an increase in salaries across the NBA.
It could also mean the players are hoping to get a bigger share of the basketball-related income in the next round of collective bargaining. That could mean another lockout.
That is business though.
And business for the NBA right now is very, very good.
