2016: How much TV money will the NBA be making?

The central question of the lockout, endlessly repeated, parsed, and blow-dried: Is the NBA losing money? This is an interesting topic, but we could be overvaluing its import. A new CBA shapes the future of the league; it doesn’t have to address the present. What I’m getting at, reduced to chewable question form: How much of the lockout is about owners feeling poor in 2011 and how much of it is about owners trying to get rich in 2016? 

2016 is when the NBA’s current national TV deal expires. This 2007-inked agreement promises pro basketball a total of 930 million dollars per year from ESPN and TNT, divided equally among teams. Stern netted the package during something of an NBA nadir, an ugly lull that did little to foreshadow this renaissance we’re all chomping mutton legs to in 2011.

Back then, basketball was still mired in the palace-brawl era, the post Shaq-Kobe era. San Antonio had just pummelled Cleveland in the 2007 Finals, a dismal four-game cornea-etcher that averaged a 6.2 Nielsen rating–down 27% from a 2006 Finals that was far from box office platinum.

The 2007 national TV deal? Well, that 930 million-per represented a 22% boost over the preceding arrangement. A ratings dip oddly came before a rise in television money. From the Los Angeles Times:

“The cost of sports broadcast rights has escalated despite a decline in television ratings for the recent NBA finals and overall TV viewership of the league’s regular-season games. That is because sports are still considered appointment viewing on television and reach a demographic swath coveted by advertisers, who are also trying to expand their digital reach.”

Perhaps it’s also that, there is only one NBA, in good times and bad–and there are so few major sports. The finite supply of these sports might ensure increasing cash totals from increasingly rich advertisers/broadcasters, just like the finite supply of NBA teams might ensure increasing team values from increasingly rich buyers.

And in good times? If the cost of NBA broadcast rights climbs after bad ratings, great TV ratings should boost the NBA’s televised value higher than helium-sucking angels. The league has been on a TV tear recently, culminating in 15.0 rating for the 2011 championship-clincher. Even before that strong finish, Mike Ozanian of Forbes wrote of a potential 3 billion dollar total increase for the next NBA television deal.

Basketball isn’t alone in riding a viewership wave, as many sports are thriving in the television landscape that social media sculpts. Can this trend crest out to 2016? Is it more than a trend? 

Say ratings keep billowing, and say multiple suitors battle over NBA television rights in 2016. Say 930 million dollars looks like a starter home. Say these things, and you can posit as to why owners say the new CBA should be ten years, not five. Say these things, and you can guess at why owners would be ready to cement player salaries near current levels–despite proclamations of current destitution.

I’m not against owners playing the long game here, it’s certainly their perogative. I just think we’re not giving NBA owners enough credit when the ruling assumption is that these men are governed by yesterday’s balance sheets. Is the NBA losing money? Perhaps the question should be: How much TV money will the NBA be making?

Related posts:

  1. Cleveland: Thank LeBron for making you terrible
  2. Nowitzki and James: Making and unmaking myths in the NBA Playoffs
  3. My Interview with ESPN’s Kevin Calabro Part 2

Trackbacks

  1. [...] Ethan Sherwood Strauss of Hoopspeak zeroes in on an issue that has perhaps been underplayed in lockout coverage so far: the fact that the NBA’s [...]

  2. [...] As Sherwood Strauss reminded us at Hoopspeak today, there is an elephant in the room at these CBA talks not really being discussed. 2016 is when the NBA’s current national TV deal expires. This 2007-inked agreement promises pro basketball a total of 930 million dollars per year from ESPN and TNT, divided equally among teams. Stern netted the package during something of an NBA nadir, an ugly lull that did little to foreshadow this renaissance we’re all chomping mutton legs to in 2011. [...]

  3. [...] Strauss from Hoopspeak, breaks it all down in his report.  2016 is when the NBA’s current national TV deal expires. [...]

  4. [...] As Sherwood Strauss reminded us at Hoopspeak today, there is an elephant in the room at these CBA talks not really being discussed. 2016 is when the NBA’s current national TV deal expires. This 2007-inked agreement promises pro basketball a total of 930 million dollars per year from ESPN and TNT, divided equally among teams. Stern netted the package during something of an NBA nadir, an ugly lull that did little to foreshadow this renaissance we’re all chomping mutton legs to in 2011. [...]

  5. [...] Money gets left on the table in both scenarios. Now, I believe the NBA is set to net a huge future TV rights contract, but that belief comes with the impression that the league has recently ceded [...]

  6. [...] Recent NBA television ratings have been floating higher than helium-farting condors. In general, sports are a’ booming. Perhaps this success has been stoked by social media and perhaps it’s just because the pinched seek distractions. But unless David Stern can clearly demonstrate how a bad economy is bad for his owners, it’s a convenient falsehood. And no, the Maloofs don’t count. That Palms business was some extracurricular self-immolation. [...]

  7. [...] in 2007, they agreed on an eight-year contract. When the NFL deal was being negotiated last year, TrueHoop asked how much the NBA deal could be worth when it expires in [...]

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