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While basketball fans will be focused on the NBA season tip-off this week, business fans will be more focused on the massive shake-up happening in media that’s set to reshape pro sports.
Driving the news: The NBA is heading into its first media-rights negotiations since 2014 when it was able to triple its media rights fees. The league is in a strong position to repeat that success, per The Wall Street Journal, even in a much-changed media landscape.
- The NBA’s two largest partners, Disney’s ESPN and Warner Bros. Discovery’s TNT, together pay the league around US$2.6 billion per year as part of a deal that ends after the 2024-25 season.
Yes, but: ESPN and TNT are under pressure to cut costs as more people cancel their cable bundles, and are unlikely to pony up higher fees demanded by the NBA.
- That means the NBA will need to find new buyers for at least some games if they hope to significantly increase media revenue.
Why it matters: This will be the first opportunity for streamers to add the NBA to their roster as they look to beef up their live sports offering.
- Apple and Amazon, which already have deals with MLB, the NFL, and Major League Soccer, have reportedly expressed interest in buying media rights from the NBA, too.
- The league may also look to distribute more games itself through individual team’s over-the-air channels, a model that the Phoenix Suns have already adopted to broadcast their games for free to fans in Arizona.
Bottom line: The decline of cable and rise of streaming isn’t just changing how movies and TV shows get made; it’s forcing sports leagues to update their business models, too.