Second only to the NFL, the NBA is one of the most profitable sports in the world. It generates about $10 billion in revenue annually, with a profit of nearly $3 billion. Over the years, the NBA has expanded its sources of income through ticket sales, broadcast rights, sponsorships, digital properties, video games, etc. As the NBA generates more revenue, it directly impacts players’ contracts. And thanks to the new CBA, NBA players are now earning more than they did a decade ago.

However, there is one factor that might throw a spanner in the league’s upward momentum. With the rise of the tech giants, cable TV has lost its footing in the media industry. This might jeopardize the NBA players’ $3,700,000,000 income as the league navigates its way around the latest challenge.

How is the NBA’s current media rights agreement hurting the players’ salaries?

With the recent trend of viewers moving towards streaming services, cable TV revenue has taken a tremendous hit. There has been a steady decline in viewership, resulting in regional sports networks filing for bankruptcy. The NBA’s current media rights agreements include Disney’s ESPN and Warner Bros. Discovery’s TNT, which pay the NBA $2.7 billion a year to air national games. However, the league’s average viewership rating has been dropping and is still well below the Michael Jordan years.

In light of this setback, Joe Pompliano on The Joe Pomp Show unraveled how the NBA’s current media negotiations might have a negative impact on the league. He said, “These two factors — local media rights dropping and national media rights not going up as much as predicted — could limit growth for the NBA in the short term. That would have a downstream impact on team valuations, player salaries, and more.”

He added, “But it’s not like these things would drop in value; they just wouldn’t go as high as fast.” Therefore, the NBA needs to take the necessary steps in order to mitigate these issues.

How can the NBA maintain its groove?

NBA’s current media rights contract, which was signed in 2014, ends after the 2024–25 season. Furthermore, the league’s international and local deals are also expiring at the same time. This provides ample opportunity for the league to revamp its media structure and use it to its maximum advantage. As per current reports, the NBA is eyeing a $75 billion media rights package.

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Tech giants such as Comcast’s NBCUniversal, YouTube, Amazon, Apple, and Netflix have emerged as top contenders to replace the incumbents. With the league trying to establish itself internationally and reach wider demographic, online streaming services could prove to be real game-changers. Therefore, Adam Silver’s decision about the new media rights agreement carries a lot of weight.

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