Buyer Beware: NBA Is Of Decreasing Value To TV Partners
The NBA is looking to triple its broadcast revenue during its next rights negotiations after the 2024-2025 season.
A report in the Wall Street Journal suggests the league is likely to re-up with its current partners, ESPN and TNT, though in a smaller capacity.
"ESPN and TNT, which carry roughly 165 nationally televised games combined, are exploring signing up for smaller packages, said people familiar with the situation. That arrangement would help them hang onto a premier asset in American media without breaking the bank. Those companies already are in renewal talks with the NBA, with an exclusive negotiation period set to expire in April," reports the outlet.
In that scenario, the NBA would look to add a third, maybe a fourth broadcast partner. The three suitors to watch are Amazon, Apple, and NBC -- each of which has shown an early interest in the NBA.
Sources tell OutKick that the league could incorporate an additional partner by way of a Sunday night primetime package following the NFL season. Perhaps that is where NBC, which broadcasts Sunday Night Football, could come into play.
The NBA has value. All live sports do. In the Netflix-ization of TV viewing, sports are among the only properties that viewers tune into live and in large numbers.
But live sports still have a price. ESPN proved that when it passed on renewing rights to the Big Ten college football conference last year. As did NBC when it passed on renewing the rights to the NHL.
And while the price for the NBA is increasing, the interest in the NBA is decreasing.
The on-court product has steadily grown dull. Regular-season games matter only a little. Star players tell us that each time they sit out for "load management" or in LeBron's case, a "sore ankle."
There's an argument that the three best players in the NBA are foreign: Nikola Jokić, Luka Dončić, and Giannis Antetokounmpo. The most-hyped player of the offseason is Victor Wembanyama, a rookie from France.
In a personality-driven league, foreign players struggle to capture the same appeal as American-born stars.
The NBA also branded itself politically. Last month, Clay Travis argued the NBA "was the original Bud Light" by espousing political values that run afoul of half of its customer base.
"The most consequential consumer boycott of the 21st century didn’t come from drinker’s rejection of a beer, it came from sports, in particular the NBA, which has destroyed its brand with a large percentage of the American sporting public by embracing woke, political, far-left-wing messaging in its games. So why haven’t you heard about this despite the overwhelming data I’m about to lay out for you? It’s simple, the American sports media is so far-left wing they have refused to share the data right in front of their eyes," Clay wrote.
"The American sports media overwhelmingly supports far-left-wing political messaging, they love it because it reflects their own ideals,” Travis added. “The vast majority of the sports media wants sports to be filled with left-wing politics – they see it as an affirmation of their own personal beliefs and applaud it."
The evidence is in the ratings.
In June, the NBA Finals averaged just 11.64 million viewers. Four of the five lowest-rated NBA Finals of the past 30 years have occurred in the past four years. (12.4 million viewers in 2022, 9.91 million viewers in 2021, and 7.45 million viewers in 2020.)
The NBA is a mainstream product in terms of social media and sports media interest. Yet its viewing interest has become niche.
For example, NBA games on TNT, ESPN, and ABC averaged 1.6 million viewers last season. WWE's Raw and SmackDown averaged a respective 1.8 million and 2.2 million.
By the way, Raw is an available property. One could argue WWE, for a third of the price, is more valuable than an NBA regular season package.
Amazon and Apple need live sports to position themselves as competitive with Netflix, Disney+, and Max. But we are skeptical subscribers will pay to watch games of little consequence, as most NBA regular season games are.
So far, the NFL (Amazon), UFC (ESPN+), and boxing (DAZN and Showtime) have proven value to streaming properties. We are not surprised. Those three sports present a sense of urgency -- a reason to subscribe.
By comparison, MLB and the NHL have shown little return on investments for their streaming partners: ESPN+, Peacock, and AppleTV.
Professional basketball, with 82 regular season games, projects to align closer with MLB and the NHL.
ESPN and TNT know what they have in the NBA and want less for a reason.
Perhaps buyer beware best describes the NBA's status as it heads to the open market.