Why the New NBA Deal Is So Weird. Plus, How Sports Rights Actually Work.
May 28, 2024
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Exploring the paradox of increasing revenues in sports media amidst declining viewership, the upcoming NBA rights deal, the impact of exclusive content like NBA playoffs on subscriber numbers, and the potential winners and losers in the evolving sports media rights arena.
48:33
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Quick takeaways
The NBA's new media rights deal showcases how leagues can boost revenue despite declining ratings.
Streaming services are reshaping sports media economics, with exclusive rights as a key strategy for revenue growth.
Deep dives
Implications of the NBA Media Rights Deal
The podcast discusses the unconventional dynamics of the NBA media rights deal, where despite declining regular season ratings, the league is set to nearly triple its annual revenue from broadcasters. The NBA's upcoming deal, expected to be worth $76 billion over 11 years, reflects the complexities of modern sports economics.
Role of Streaming in Changing Media Economics
The episode delves into the impact of streaming services on media economics, particularly how platforms like ESPN and Disney+ navigate revenue generation. With traditional cable models declining due to cord-cutting, companies are exploring how exclusive sports streaming can attract and retain subscribers.
Power Dynamics in Sports Media Rights
The conversation highlights the power dynamics in sports media rights negotiations, showcasing how leagues like the NBA can leverage multiple bidders to drive up prices. This strategic approach contrasts with the challenges faced by other sports leagues like Major League Soccer in securing lucrative broadcast deals.
Rise of Women's Sports and Future Opportunities
The podcast anticipates the growth potential in women's sports, with a spotlight on the WNBA's profitability hinging on upcoming media rights renewals. As women's sports gain momentum, private equity investors are eyeing opportunities beyond basketball, pointing to sports like women's volleyball and softball for potential growth and investment.
In an age of cults, sports are the last gasp of the monoculture—the last remnant of the 20th century mainstream still standing. Even so, the new NBA media rights deal is astonishing. At a time when basketball ratings are in steady decline, the NBA is on the verge of signing a $70-plus billion sports rights deal that would grow its annual media rights revenue by almost 3x. How does that make any sense? (Try asking your boss for a tripled raise when your performance declines 2 percent a year and tell us how that goes.) And what does this madness tell us about the state of sports and TV economics in the age of cults and cord-cutting? John Ourand, sports correspondent with Puck News, explains.
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