The NBA is still in recovery from revenue lost the past two seasons with COVID-19 pretty much ravaging the world.
From finishing a season in a “Bubble” to beginning the following season in December instead of October, it’s safe to say the league has done about as good a job as one could expect of adjusting to it the “new norm.”
In 2016, the league signed a broadcasting deal that would have it them upwards of $24 billion when it expires in 2024.
That’s chump change compared to the new deal, which is slated to begin in 2025 and is rumored to be in the $75 billion neighborhood.
That’s “papercutz” and “Brinks truck” type numbers.
“The league is looking for a broadcast rights package worth more than $70 billion over nine years, and maybe as high as $75 billion, CNBC’s Jabari Young reported previously (for comparison, the NFL just signed a $113 billion, 11-year broadcast rights deal).
While it may seem counterintuitive that broadcast fee rights would spike as traditional NBA viewership numbers are declining, it speaks to the draw of major live sports and, more importantly, how streaming services want that draw to lure in fans. Increased legalized gambling plays into those numbers, as does the fact the NBA is much better at reaching Gen Z and younger fans than other major sports.”
A larger streaming deal, means more “moolah” in this age of social media. When new deals are cut that usually means there’s more money for every party involved. In fact the last time the league negotiated a new broadcasting deal in 2014, the salary cap rose almost $25 million from 2015 to 2016.
The Locker: The NBA will almost TRIPLE its revenue in new TV deal http://t.co/t3p88bFsoC
— Awful Announcing (@awfulannouncing) October 6, 2014
That was considered a huge spike back then, so actually tripling the current mark isn’t farfetched considering the explosion in ways that customers and fans can access NBA content. The league’s national television broadcast rights package alone brought in $2.6 billion a season.
The 2021-22 salary cap is set at $112.4 million, but if the Association agrees to the new deal, many believe the cap could rise to as much as $175 million by 2025. As crazy as that sounds, that means the league would have more than doubled its cap since 2015. It also means even bigger contract values.
If the league gets a deal in that $75 billion range, the salary cap could spike to surprisingly high numbers, reports Morten Jensen at Forbes.
Individual player contracts have increased greatly in the last half decade. Some are even north of $200 million. Warriors superstar Stephen Curry has signed two deals valued over $200 million.
With the money the NBA will be raking in, we could see an NBA superstar sign a $500 million contract, just like NFL superstar quarterback Patrick Mahomes did this offseason.
Although that probably won’t happen yet, players signing for $300 million is highly plausible.
Traditional TV ratings for literally everything are at all time lows.
The new NBA media rights deal is expected to at least double and might triple.
Traditional TV ratings are a horrible way of gauging interest in anything in 2021.
— Block Sr. (@517to214) April 12, 2021
With the salary cap shrinking the past two seasons due to the reduced revenue from the pandemic, a big boost via a new broadcasting deal would be a quick way to recover, while sending salaries skyrocketing.
It’s anyone’s guess what else that could mean for the future of basketball and the revenue streams.
