On October 26, 2023, according to U.S. sports business outlet SportsPro Media, the NBA is on the brink of initiating its next domestic media rights cycle. Heavyweights like ESPN, TNT, NBC, Amazon, Apple, Google, and Netflix are all potential contenders for the upcoming rights contract.
While current rights holders ESPN and TNT show signs of renewing their contracts with the NBA, other giants like NBC, Amazon, Apple, Google, and Netflix are eager to get in on the action. Sources suggest that the NBA's new media rights contract could be worth a staggering $75 billion.
The NBA has previously benefited from a lucrative $24 billion deal signed with ESPN and TNT in 2014. Indications from the past suggest that the NBA is keen on partners that can boost revenue, enhance the league's influence, and better cater to public expectations.
SportsPro Media highlighted that the NBA is likely to introduce a streaming package and expects all its pay-TV partners to simultaneously broadcast games directly to consumers (DTC) through this platform. Streaming, which involves real-time transmission of compressed media data over the internet, now accounts for a third of all TV revenue in the U.S. This has elevated the value of media deals, as streaming services act as tools to acquire and retain customers.
Thus, media entities that can offer the NBA an enhanced streaming package, retain more users, and increase the number of paying subscribers will be the most coveted partners.
ESPN, with its vast capabilities in pay-TV, streaming, and free-to-air broadcasting (FTA), is set to launch a comprehensive DTC version of its flagship network. However, a potential hurdle is the decline in ESPN's cable TV subscribers over the past seven years, dropping from over 100 million to 70 million.
Sports business outlet Front Office Sports revealed mutual interest between the NBA and NBC, as NBC aims to produce free public TV channels. This could attract more participants and help the NBA expand its reach.
In the new media rights cycle, several streaming platforms, including Amazon, Apple, and Netflix, have emerged as potential NBA partners.
According to Financial Times, Apple's service revenue reached $21.2 billion in the June 2023 quarter. Its 2 billion active users, growing customer loyalty, and robust growth in paid subscriptions reflect the strength of Apple's service ecosystem, which could significantly benefit the NBA.
Amazon has long sought to include the NBA in its NFL coverage. Sports Illustrated reported that Amazon and the NBA are working towards a media rights deal worth between $50 billion and $70 billion. If finalized, this could offset the NBA's revenue losses from recent seasons impacted by the pandemic.
Netflix aims to produce sports-themed documentaries for the NBA and one-off live special events. In 2022, Netflix reported revenues of $31.62 billion, a net profit of $4.49 billion, and a total market value exceeding $140 billion, surpassing traditional studios like WBN and NBC Universal. Its substantial assets and vast subscriber base give Netflix a competitive edge.
While current partners ESPN and TNT have exclusive negotiation opportunities with the NBA, given the prevailing uncertainties, the NBA is unlikely to announce any new deals until at least the end of the 2023-2024 season.
