I said it then and I’ll say it again. Everyone was reaching for complicated explanations for the NBA deals when the reality was it was simply a set of terrible deals driven by a confluence of events that were unlikely to be replicated.
Despite the parade of your podcast guests over the past year asserting that the MLB has surpassed the NBA in the zeitgeist (a bad take then and remains so now), I agree that the NBA is doing well
I also concur that Goodell asking for renegotiation is laughable…although my parents would tell you that there is never harm in asking…they can only say no. The NFL owners seem to be of the same generation as my parents as they prepare Goodell’s next lucrative extension.
Having said that, I do have one small quibble. Specifically, we need to understand the immense value time has on financial transactions and appreciate that looking at long-term investments from a snapshot perspective instead of much longer trend line can be misleading.
Let’s take the numbers provided here:
“…Adam’s 2024 negotiation triumph put NBA rights at 69 percent of what the NFL hauls in annually. That was an incredible coup.”
Is it really a coup or a predictable and expected result of timing? Lets look further:
“…When the NFL renewed in 2021, that put the NBA at 26 percent of the NFL haul. Before the NFL did the 2021 contract, the NBA was at 59 percent of the NFL take.”
So, the NBA gained some ground after its new deal and three full years after the NFL inked its prior deal. Although NFL owners receiving three full years of higher revenues to reinvest does complicate the numbers a bit by comparison, this is again not at all surprising. That’s what indefatigable time does.
What is a bit surprising is the apparent data from the longer trend line. The NBA and NFL media contracts are not synchronized; they are executed years apart. So, snapshots in time can be misleading…a longer time-frame is needed to discern the actual state of affairs.
If I’m understanding the data here correctly, prior to the NFL’s new contract in 2021, the NBA was at 59% of the NFL’s take. Three years later - and again prior to the NFL’s next contract - they were at 69% of the NFL…a relatively modest 10% gain over three long years compared to the prior analogous point in time. I wouldn't characterize that as a coup. More like expected progress.
Sports league media deals are inherently long-term investments for both parties. A longer perspective is needed to accurately assess, particularly when they are not synchronized. When the NFL renegotiates its deal in a few years, the NBA’s percentage will again predictably plunge …perhaps to around 39% of the NFL or so.
But I’m here to share that there is good news when that happens. You can re-invite all those prior pod guests to remind us how right they were that the NBA was dying.
Could interpret Silver going for 59% to 26% to 69% as just contract cycle. Could also compare NFL going from $4.4B -> $10 billion as 2.3x and NBA going from $2.6B → $6.9B as 2.6x...loosely within margin of error.
Impressive that Silver got that deal. Goodell...given shifts in streamer spending, he had to at least try now?
Great piece, Ethan, but have you ever written an explanation of how Silver was able to negotiate such a big number in the face of declining ratings? It still makes no sense, except as a personally self-interested move by CEOs jealous of Zaslov’s courtside seats.
He did at the time. In summary, Amazon paid near the NBA’s asking price because it gained Thursday and Friday games, plus exclusivity to the semi-final and final of the In-Season Tournament (it’s also couch cushion change for Bezos). NBC was desperate for NBA rights again to drive subscriber growth and retention for Peacock and had to outbid TNT. ESPN was never going to part with its rights because it would devalue both the ESPN channel’s rights fees to cable operators and direct to consumer ESPN.
"Imagine losing the most important technological battle ever because you wanted to own Titans-Browns."
This almost caused the coffee through my nose this morning!
It’s pretty funny that the AI bubble is now crowding out the sports broadcast rights bubble.
You’re not wrong.
I said it then and I’ll say it again. Everyone was reaching for complicated explanations for the NBA deals when the reality was it was simply a set of terrible deals driven by a confluence of events that were unlikely to be replicated.
Sometimes it really is that simple.
“Adam Silver caught the last helicopter out of Streamer Saigon”
Well done, Ethan lol
Despite the parade of your podcast guests over the past year asserting that the MLB has surpassed the NBA in the zeitgeist (a bad take then and remains so now), I agree that the NBA is doing well
I also concur that Goodell asking for renegotiation is laughable…although my parents would tell you that there is never harm in asking…they can only say no. The NFL owners seem to be of the same generation as my parents as they prepare Goodell’s next lucrative extension.
Having said that, I do have one small quibble. Specifically, we need to understand the immense value time has on financial transactions and appreciate that looking at long-term investments from a snapshot perspective instead of much longer trend line can be misleading.
Let’s take the numbers provided here:
“…Adam’s 2024 negotiation triumph put NBA rights at 69 percent of what the NFL hauls in annually. That was an incredible coup.”
Is it really a coup or a predictable and expected result of timing? Lets look further:
“…When the NFL renewed in 2021, that put the NBA at 26 percent of the NFL haul. Before the NFL did the 2021 contract, the NBA was at 59 percent of the NFL take.”
So, the NBA gained some ground after its new deal and three full years after the NFL inked its prior deal. Although NFL owners receiving three full years of higher revenues to reinvest does complicate the numbers a bit by comparison, this is again not at all surprising. That’s what indefatigable time does.
What is a bit surprising is the apparent data from the longer trend line. The NBA and NFL media contracts are not synchronized; they are executed years apart. So, snapshots in time can be misleading…a longer time-frame is needed to discern the actual state of affairs.
If I’m understanding the data here correctly, prior to the NFL’s new contract in 2021, the NBA was at 59% of the NFL’s take. Three years later - and again prior to the NFL’s next contract - they were at 69% of the NFL…a relatively modest 10% gain over three long years compared to the prior analogous point in time. I wouldn't characterize that as a coup. More like expected progress.
Sports league media deals are inherently long-term investments for both parties. A longer perspective is needed to accurately assess, particularly when they are not synchronized. When the NFL renegotiates its deal in a few years, the NBA’s percentage will again predictably plunge …perhaps to around 39% of the NFL or so.
But I’m here to share that there is good news when that happens. You can re-invite all those prior pod guests to remind us how right they were that the NBA was dying.
Looking forward to it.
Every league is dying when small market teams make the championship round and universally beloved when big market teams make the championship round...
Could interpret Silver going for 59% to 26% to 69% as just contract cycle. Could also compare NFL going from $4.4B -> $10 billion as 2.3x and NBA going from $2.6B → $6.9B as 2.6x...loosely within margin of error.
Impressive that Silver got that deal. Goodell...given shifts in streamer spending, he had to at least try now?
Adjusting for inflation, the NBA deal is still around 59% of the NFL deal.
Great piece, Ethan, but have you ever written an explanation of how Silver was able to negotiate such a big number in the face of declining ratings? It still makes no sense, except as a personally self-interested move by CEOs jealous of Zaslov’s courtside seats.
He did at the time. In summary, Amazon paid near the NBA’s asking price because it gained Thursday and Friday games, plus exclusivity to the semi-final and final of the In-Season Tournament (it’s also couch cushion change for Bezos). NBC was desperate for NBA rights again to drive subscriber growth and retention for Peacock and had to outbid TNT. ESPN was never going to part with its rights because it would devalue both the ESPN channel’s rights fees to cable operators and direct to consumer ESPN.
Good one Ethan
Two more variables:
- It will likely be Goodell's final media rights deal as commish
- Who knows what the next administration's position on the NFL's antitrust exemption