The New TV Deal: Much has been made about the possibilities of massive economic expansion in the NBA tied to on-going TV rights negotiations. While all parties involved are keeping these talks close to the vest there are a few things that have come out as these discussions have taken place.
It seems ESPN/ABC and Turner Sports will renew with the NBA, although there are some things that look like they may change.
There is a sense that the NBA Finals will be split up among ESPN/ABC and Turner, giving Turner potential the mid-week games, while ESPN/ABC gets the weekend games.
The current rights package pays the NBA some $940 million per year, with Turner paying some $445 million per year with ESPN/ABC paying and estimated $485 million. Those figures are expected to almost double in a new deal with some estimates pegging the new deals to be worth $1.2 to $1.4 billion annually.
The wrinkle that may really drive the value up is a third partner. There has been considerable talk that Fox Sports 1 may be closing in on securing a rights deal for what insiders are calling NBA Saturday, which is a package of Saturday night games, which could add an additional $250 to $300 million to the total.
There has also been some talk that a new rights package may also include domestic expansion options, should the NBA decide to make that move.
It’s important to take all expansion talk with a grain of salt, but J Bruce Miller a Louisville attorney, who is leading the charge to land a NBA team in Louisville wrote a substantial post for a Facebook campaign geared around bringing the NBA to Louisville. In the letter, Miller immediately denounces the idea of expansion in the immediate future, citing the ongoing mess with the Clippers, however implies that after the Donlad Sterling mess is resolved, potential expansion into new markets could add new value to the TV deal and that Seattle and Louisville are on the radar.
Again, take all expansion talk with a grain of salt.
NBA sources have warned that expansion domestically is something of a pipe dream, mainly because what gets put in terms of an expansion fee is usually never greater than what a new member team takes out of the pie, and that given how long it takes a team to ramp up sales and revenue generation, expansion simply puts one more mouth at the table that usually does not carry its own weight.
Given what a new share of the TV deal could be worth, the existing 30 owners may not be willing to share the wealth to the expand the league, but it does seem like there could be some language in the new TV deal to allow for it and that’s a huge first step.