On Monday, word broke from John Ourand of the Sports Business Journal that the 15 NBA franchises that have local TV rights deals with Bally Sports will get their rights back at the end of this season, no matter how long their current contracts run, as part of a new deal with Diamond Sports Group as part of their ongoing bankruptcy case.
Because every team in the NBA is on a different local TV contract for varying lengths of time, there has never really been a time like this where half of the league will be shopping their rights at the same time. This presents a unique opportunity for the NBA to finally reshape its long-standing issues with local TV rights and take back some control going forward, building towards a vastly improved League Pass model that could benefit the league and teams.
The first step is for teams to negotiate that they have control over their streaming rights. We’ve seen a few teams debut direct-to-consumer streaming services in recent years — the Clippers, Suns, and Jazz all moved to that model recently with their current TV deal, and it should be the standard going forward. What must change is the need to purchase both a DTC service and League Pass to watch the league as a whole.
One of the biggest issues with selling teams on a leaguewide streaming service has been the biggest franchises — Lakers, Knicks, etc. — make a ton off of their local rights, while smaller markets do not. Those big teams don’t want to share that much of the pie, and understandably so. However, it would benefit the league greatly to find a way to sell a League Pass option without blackout restrictions locally, and the shift to DTC models could provide a way to bridge that gap. From a fan perspective, having to bounce between apps to watch different games is incredibly annoying. It’s also annoying to have to pay a significant amount for multiple services to watch the league as a whole.
So, what if instead of having to pay $125 for a local option and $99/149 for NBA League Pass (regular/premium), the league brought those under one umbrella (the current DTCs already sell through NBA.com) and let teams sell a local streaming option and also a League Pass without blackout restrictions for $199, much like MLS’ new structure with Apple. Teams could still sell their broadcast TV rights to bring in that revenue, and it would be easy to track streaming sales to ensure teams get their cut of the League Pass purchase. That would mean the big market teams could still reap the benefits of being in the big market, while small market teams would get some help from the league in terms of running the streaming service rather than having to get it off the ground themselves. That would also (hopefully) cause the league to be more invested in the League Pass product and it would mitigate a lot of the previous concerns for bundling everything together.
As pretty much anyone that has tried to cobble together different streaming services is aware, the value is largely gone at this point as things become more fractured, and this is a rare opportunity for the league to look to take control of their own streaming rights to avoid further splintering as the RSN model becomes more fraught. Adam Silver has noted that the RSN model has to change and the league has to be proactive in figuring out what the shift should be, and with the opportunity to get half of the league under one umbrella next summer, this is the best chance to take a major step forward in that.
There might be a short-term financial hit teams would take by splitting up the broadcast TV rights and the streaming rights to sell those themselves, but with franchise valuations ballooning and a new national TV deal set to make everyone lots and lots of money, that seems like a worthwhile gamble. Silver has been adamant that the NBA needs to make it easier to watch games and he is clearly skeptical of the TV bundle still being the answer long-term.
If that’s the case, then why wouldn’t you look to bring everyone’s streaming rights under one umbrella and control it as a league, letting the teams be the ones to sell it directly to their fans? There won’t ever be a better opportunity to do so than next summer when you could get 15 of your franchises on board, and then look to add the rest whenever it’s their turn to renegotiate.
