News and Insights

The State of Sports Media… Rights!

November 28, 2023

FINN Consumer Lifestyle and Sports client, the National Women’s Soccer League (NWSL) recently announced a historic sports media rights deal – the largest ever for women’s sports worth a reported $240 million.

A look at the broader landscape, the NFL, MLB, NHL, and MLS all recently secured long-term media rights deals as well.  Now, all eyes are on the NBA as its existing $24 billion agreement with ESPN and Warner Bros Discovery expires at the end of the 2024-25 season.

As recent sports media rights deals have proven, especially with streaming services officially in the media rights mix, competition is intensifying and driving up value.

Hate it or love it, on Friday, November 3, the NBA debuted its inaugural in-season tournament, the NBA Cup, a Round Robin competition that features the league’s 30 teams competing every Tuesday and Friday night throughout November.

Inspired by domestic cup tournaments in Europe, the NBA Cup is meant to provide players and teams with another competition to win, engage fans in a new way and drive additional interest in the early portion of the regular season. According to NBA Deputy Commissioner Mark Tatum, “It really does give us an opportunity to create a new championship tradition that will be meaningful over time to teams, to players, to partners and fans.”

But wait, how does the in-season tournament even work?

The league’s Eastern and Western Conference teams are divided into three groups of five teams each, totaling six groups. Each team plays one game against each of the other teams in its group, for a total of four games (two at home and two on the road).

They also count as regular season games.

Four teams from each conference advance to a single-elimination tournament: the three pool winners in addition to the group runner-up with the best record as a wild card. Players on the champion team will each receive $500,000, and runners-up will get $200,000.

Okay, thanks! Now, what does this have to do with the NBA’s media rights?

While some fans have pushed back on the league’s new in-season tournament, the NBA just created another multi-billion-dollar media property for broadcast partners out of thin air, and we should all be paying attention!

The timing isn’t a coincidence either. As the NBA comes up on its historic media rights negotiations at the end of the 2024-25 season, this new offering could become a significant bargaining chip, with various media reports noting that the league’s next deal could be worth $75 billion, which is three times more than their current deal.

Could the NBA’s new in-season tournament serve as another property to attract yet another media partner? Could this lead to a potential streaming deal ala Amazon Prime and the NFL’s Thursday Night Football?

That could very well be the case, especially taking a look at ESPN’s solid viewership numbers following the first two weeks of the NBA Cup. To date, the network has reported that average viewership for the in-season Tournament is up 55% against the comparable windows last season (1.7M vs. 1.1M).

Interesting… so, put that into context. What’s the broader sports media rights landscape looking like?

Well, let’s start with the league that hits particularly close to home. The National Women’s Soccer League’s recent historic media rights deal with four major streaming and cable partners: CBS, ESPN, Amazon and Scripps will include 118 NWSL matches distributed across both linear and streaming platforms.

More importantly, the new four-year agreements were worth a reported $240 million, making the new deal 40 times larger than the league’s previous deal and the biggest in women’s sports history. Yes, very impressive.

In terms of the NFL, it has definitely leaned into streaming, partnering with Amazon for the media rights to Thursday Night Football, and teaming up with Google/YouTube TV for its Sunday Ticket, which gives fans access to out-of-market games on Sundays.

As for the MLS, earlier this year the league announced a new broadcast agreement with Apple, reportedly worth an estimated $2.5 billion over 10 years, replacing its past agreement with ESPN, Univision and Fox. The new deal marked the first pro sports league to do an exclusive agreement with a streaming partner.

Ahead of the 2021-22 season, the NHL announced a seven-year deal with ESPN and TNT, while the MLB reached a seven-year deal with ESPN, joining FOX ($728.6 million annually) and TBS ($470 million annually) for the same period of 2022-28. The total value for all three national broadcast partners for the seven years comes to $12.24 billion based on figures from the New York Times and Sports Business Journal.

So, what’s next? Will a streaming company come for the NBA?

According to our good friends at SportsPro, Apple has been touted as a possible bidder; however, it prefers global deals like the ones it has with MLB and the MLS, and the NBA’s international popularity means a similar arrangement would be difficult.

Amazon is also a contender given its pre-existing relationship with the NBA as a partner in Brazil. It would also serve as a great way for Amazon Prime to complement its NFL coverage, establishing a year-round sports schedule. Speaking of the NFL, Google could also be a contender as it seeks to complement its Sunday Ticket coverage on YouTube TV.

Inspired by the NFL’s recent success, which sold its rights for more than $110 billion over 10 years by transforming Thursday Night Football and Sunday Ticket into streaming propositions that have attracted Amazon and Google, the NBA is expected to carve out a package of games for a streaming platform and will expect any pay-TV partner to simulcast matches via a direct-to-consumer (DTC) service. Given younger viewers are more likely to cut the cord, cable exclusivity is not desirable at all.

That said, there’s still two seasons left on the NBA’s current TV deal, and both ESPN and Warner Bros Discovery still have their exclusive negotiating period to leverage their existing relationships. Nevertheless, the NBA’s decision will have a huge impact on the sports media landscape, with an announcement expected to take place toward the end of the 2023-24 season, leaving plenty of time for speculation, and situations to resolve themselves.

What’s FINN’s Final Take?

If content is king, then sports content is the reigning emperor, and the value of live sports is undeniable.

While the rise of streaming platforms has given consumers the ability to watch their favorite shows whenever they want, however they want, live sports calls for “appointment viewing,” and fans wouldn’t have it any other way, even willing to pay top dollar to watch.