The stakes in this lockout are rising by implication. Every time a new league cashes in on the current TV rights boom, the NBA’s theoretical money pile grows. And when I say “current TV rights boom,” I want to do more than just evoke the idea of “growth.” I want to shake you by the shoulders, shout into your nostrils, “NCAA conferences are multiplying their old deals times four! The NHL nearly tripled their previous contract! The games with bouncing objects have struck liquid gold in the Frivolous Distraction Basin and the gushers are springing higher than lost balloons! It’s getting VERY SILLY OUT THERE!”
First, a brief explainer:
TV rights are what broadcasters pay to sports leagues for the privilege of airing games. When a network like Turner-TNT or ABC-ESPN acquires rights to the NBA, they make money off selling advertising during those games. If the sport is prominent, networks will occasionally overpay–that is, give more to the league than they get back in ad money–just to be associated with such a hot property. There are hidden benefits to broadcasting a power league like say, the NFL. Your network might be paying 4 billion in exchange for 3 billion in football ad revenue, but you can pummel millions of viewers with in-game ads that flaunt your channel’s latest version of “the ironic maudlin shame spectacle of untalented famous people judging untalented normal people who are trying to become untalented famous people.”
Anyway. As I was saying.
It’s getting silly out there. Recently, the NFL cut a 1.9 billion dollar per-year Monday Night Football deal with ESPN, an arrangement that towers over the NBA’s 2007-2016, $930 million in total yearly television revenue. Zach Lowe was all over this NFL news, using it to emphasize the importance of TV money in the NBA lockout poker game:
“The fact that owners and players are talking more is nice, but today’s NFL news is a reminder of how much work must be done — and how much is at stake.”
My initial reaction to the NFL agreement was: Is the rights to 17 Monday Night Football games really worth more than twice the rights to every single national basketball game? My second take: Could the NBA do better than this NFL deal? In other words, could the NBA make roughly as much from national TV as it now pays to players ($2.16 billion)? Keep in mind that the NBA’s old deal was signed during an ugly Spurs-Cavs-Finals ratings nadir, back when New York, Boston, Chicago and Los Angeles carried far less clout.
Of course the NFL is king, and the ability to televise football grants channels a special kind of leverage in price negotiations with cable providers. But there are a whopping 144 nationally televised NBA regular season games scheduled in 2011-2012 (74 on ESPN, 54 on TNT, 15 on ABC, 1 on ESPN2). And those would be followed by roughly 80 higher-rated playoff battles.
At a 10.5 rating, 14.7 million-viewer average, MNF is as strong as cable sports gets. But the last NBA Finals drew bigger numbers on ABC, and ended in an impressive 15.0 rating, 23.5 million-viewer crescendo. Some of that advantage can be attributed to network-versus-cable reach, but TNT managed a 10.4 million viewer average from five rounds of Bulls-Heat. That’s short of MNF status, but it represents the NBA’s ability to draw big numbers on cable.
Considering that–some day–the NBA could conceivably produce 17 games of MNF-level ratings (A great Finals combined with a highly impressive Conference Finals round), $930 million per year sounds about as cheap as the phrase “$930 million” ever could. So I’ll go out on a limb and predict David Stern’s league will indeed top $2.16 billion in the next TV contract. I am tagging projections of a 1.2 billion dollar NBA rights deal with the oxymoronic label of “wildly conservative” and swinging for deep fences. And if proven laughably wrong, I can always hide behind, “Stern negotiated poorly!”
A theoretical TV money pile weighs heavily on this, the lockout negotiating table. It’s likely why owners want to cap player salaries at near current levels, stunting revenue sharing right before a cash influx comes flooding. It’s likely why players want a CBA that ends close to the new TV deal in 2016-2017, whereas owners prefer a decade-long version. And if I am correct, it’s why the NBA will be making more from just national TV than they currently pay out to players.
(Note: For the sake of easy comparison, I reduced the MNF deal to its bare essentials. The contract includes digital rights, international rights, and the possibility of televising a future Wild Card Game.)
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