An announcement was expected today, but no one saw this figure coming. In a move that surprised prognosticators who envisioned a jump in the NBA’s TV-rights deal, but not this large an increase, the NBA will be paid $24 billion over the nine years of their contract with Turner (TNT) and Walt Disney (ESPN/ABC).
Per Richard Sandomir of the New York Times, came news of the new gargantuan TV figure last night:
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
It was confirmed this morning in an announcement from commissioner Adam Silver:
The National Basketball Association (NBA) has expanded its partnerships with Turner Broadcasting System, Inc. and The Walt Disney Company through new, nine-year agreements under which ABC, TNT, and ESPN will televise NBA games beginning with the 2016-17 season and running through the 2024-25 season.
The agreements were announced today by NBA Commissioner Adam Silver; Washington Wizards owner Ted Leonsis, chairman of the NBA’s Media Committee; Turner Broadcasting System President David Levy; and ESPN President and Disney Media Networks Co-Chairman John Skipper. The NBA’s current eight-year deals with ABC/ESPN and TNT expire at the end of the 2015-16 season.
Roughly, the figures mentioned by the Times’ Sandomir almost triples the NBA’s current TV rights deal, which could mean a huge jump in cap space and a change in the current collective bargaining agreement. Originally, most expected a jump from $900 million a year to $2 billion a year, but this goes almost to $3 billion, showing just how much television wants live sports — perhaps the last medium advertisers can be assured won’t wind up on the DVR; hence, no eyeballs for all-important television ads.
Sources tell Sports Business Daily ESPN will account for about $1.4 billion per year, while Turner’s payment will average around $1.2 billion.
According to Forbes, the deal adds more games to TNT’s regular season schedule and puts a few NBA D-League and Summer League games — normally only televised on NBA TV, on ESPN
The Wall Street Journal, by way of SB Nation, adds that the league also laid plans in a partnership with ESPN for a new online video service:
The league also laid plans in partnership with ESPN for a new online video service that would show live regular season games, the people said. In a significant move for ESPN, which derives its huge profits from the pay-TV ecosystem, that service will be open to people who aren’t cable or satellite TV customers.
It seems Fox Sports 1, who was reportedly bidding to be included in the new TV rights deal, was left out in the cold.
According to the press release from Turner, TNT will have the following rights beginning with the 2016-17 season and extending to the 2024-25 season:
-The network will be the home of NBA Opening Night;
-Exclusive Thursday Night regular season doubleheaders;
-TNT’s additional 12 games will air over the second half of the season on another night of the week than the network’s traditional Thursday Night doubleheaders;
-Exclusive coverage of NBA All-Star Weekend signature events including NBA All-Star Saturday -Night and the NBA All-Star Game;
-More NBA Playoff games than any other network. TNT’s coverage of the NBA Playoffs will include live first round coverage, exclusive second round game telecasts and one Conference Finals (alternating between the Eastern and Western Conference each year).
Disney/ABC/ESPN also outlined what they’re buying as part of the historic deal in a release of their own:
In addition to the over-the-top service, the new and enhanced rights also include:
-10 additional regular-season games for ESPN or ABC bringing the regular season total to 100;
-10 more exclusive regular-season windows;
-Increased team appearances to showcase the most popular teams and most compelling matchups more times throughout the season;
-As part of the new agreement, ESPN will substantially increase its NBA-focused programming -with 750 new hours of NBA content on linear and digital platforms, establishing a significant year-round presence for the NBA on ESPN;
-ESPN has reached a multi-year extension for WNBA rights through 2025, which will include increased in-progress highlights on linear and digital platforms;
-ESPN International – In Latin America, the Caribbean, Australia and New Zealand, ESPN will carry significantly more exclusive regular-season and playoff games on ESPN platforms, including expanded weekend windows during the regular season, increased first and second round playoff coverage, and the NBA conference finals and NBA Finals (including exclusivity in Australia and New Zealand). Additionally, ESPN will carry more NBA-themed programming throughout the year;
-Increased ability to use NBA footage and highlights, plus in-progress highlight rights, on all linear and digital ESPN offerings, including, ABC; ESPN; ESPN2; ESPNEWS; ESPN Deportes; ESPN International; ESPN Audio; ESPN.com; ESPN3, WatchESPN, SEC Network, ESPNU, Longhorn Network, Grantland, FiveThirtyEight, ESPN Films;
-Live, national rights to NBA Summer League and NBA D-League across ESPN entities;
While increasing its English-language distribution rights, ESPN Audio will become the exclusive Spanish-language national rights holder through ESPN Deportes Radio on terrestrial radio, satellite and all forms of radio devices including digital and third party platforms;
Additional regular-season and playoff games for ESPN Deportes and ESPN Deportes+.The new rights join these extensive continuing elements in the new agreement:
-ABC will continue to be the exclusive broadcast home of The Finals;
-The NBA post-season begins and concludes on ESPN networks, as ESPN and ABC combine for up to 44 NBA post-season games, including the Conference Finals;
-ESPN Audio will continue its 20-plus year tenure as the exclusive, national radio home of the NBA, with coverage of the NBA Finals, NBA Conference Finals, NBA Playoffs, NBA All-Star Game and NBA regular-season games;
-ESPN and ABC will continue with a significant television presence for NBA Christmas Day, the NBA’s season-opening week and NBA All-Star festivities such as the Celebrity All-Star Game;
-Season-long prime time games Wednesdays and Fridays on ESPN and Sundays on ESPN and ABC;
-NBA Finals streamed on ESPN3 or WatchABC and ESPN Deportes;
-Extensive weekly studio programming on ESPN;
-ESPN will continue to be the exclusive home to the NBA Draft, NBA Draft Combine and NBA Draft Lottery.
The NBA just got a whole lot richer, which means the teams will have a lot of money to spend on players. Unfortunately, the huge influx of cash to begin the 2016-17 season means the salary cap structure in place right now could get blown up entirety. Silver said in his announcement this morning that league and the Players Union haven’t even begun to ascertain what the new deal means for the salary cap:
As Adam Silver just said, union and league have barely started any discussion of possible cap-smoothing.
— Zach Lowe (@ZachLowe_NBA) October 6, 2014
That being said, the BRI (basketball-related income) just jumped significantly starting with the 2016-17 season, which affects the salary cap and luxury tax tabulations each year. This announcement is part of the reason guys like LeBron James only signed two-year deals to allow them space should the cap jump significantly along with max salaries, or even the abolishment of salary maximums completely.
What do you think?
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