NBA to announce new TV deal worth $24 billion
The NBA is inking a new TV deal that will up the ante for the league's profitability.
By J.A. Sherman Oct 6, 2014, 11:03am CDT
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Mark D. Smith-USA TODAY Sports
The NBA has announced today that it has reached an agreement for its next TV deal. Per ESPN:
ESPN and TNT retained the rights to show NBA games for the next nine years in a new deal announced Monday.
The deal takes effect starting with the 2016-17 season and increases ESPN's television, digital, highlights, data, audio and international NBA rights. Games will continue to air on ESPN and TNT through the 2024-25 season. The announcement was made by NBA commissioner Adam Silver and ESPN president John Skipper.
ABC will remain the exclusive network for the NBA Finals and both ESPN and ABC will combine for up to 44 postseason games, including the conference finals. ESPN will continue to air the draft, draft combine and draft lottery.
The New York Times reports the deal's value at more than $2.5 billion per year. ESPN's current relationship covering NBA games on television began in 2002, when the network won the rights from NBC. TNT has been covering the NBA since 1988.
The total value comes to around $24 billion in totality. There are a lot of good things about this newly announced deal, which is nearly 3 times as much as the NBA's previous TV deal. It signifies that the NBA has finally righted itself as a premier professional sports league in the sports entertainment landscape after a long stretch of playing 3rd fiddle. The NFL is in the middle of a 9 year, $27 billion deal and Major League Baseball has its own 8 year, $12.4 billion deal. What will make it so lucrative to the people involved is that they are dealing with a much smaller pool of stakeholders, with NBA rosters limited to only 15 players, 30 total franchises, and a smaller farm system than MLB.
Check out Tom Ziller's assessment of the consequences that may bear themselves out. For example, let us consider our very own league MVP, Kevin Durant, who coincidentally becomes a free agent the same time this new deal takes hold:
Let's put it another way. Kevin Durant will be a free agent in 2016. Assuming the TV deal kicks in at $2.67 billion and the NBA doesn't work out a way for more gradual salary cap increases, Durant would be eligible to sign a five-year deal worth $162 million with the Thunder. If he wanted to sign with another team, he'd be eligible for four years, $120 million.
Durant's current deal will pay him $20.1 million in the final year of his contract, according to the smart guys at ShamSports. Under this proposed deal, assuming KD would sign for the max number of years (no guarantee) he'd see his contract value in the following season jump to $30 million per year if he went to another team and $32.4 million if he stayed in OKC. On a comparative 4 year contract basis, this means he'd be leaving about $10 million on the table if he chose to leave the Thunder by entering free agency and going to another team.
It is all still going to be wild speculation though, so let those ghost dogs run where they may.
Meanwhile, you know who comes to mind as I see this Death Star-sized new TV deal? These guys. Just goes to show that even the deal of a lifetime eventually has to end, and it is usually because somebody got tired of paying it.