When it comes to American sports leagues, nobody is as successful at monetizing broadcasts, team identity, and their sport itself as the National Football League. The NBA has made great strides in recent years, but they’re still looking up at the NFL and the gap isn’t close.
Not coincidentally, the NFL also has the most lucrative and balanced broadcast revenue stream in the industry. That’s causing one Blazer’s Edge Reader to ask whether the NBA couldn’t imitate them, to the benefit of smaller-market franchises.
The discussion on changing the draft reminded me that I’ve often wondered why the NFL is a much more “balanced” league in which even small market teams have a more-or-less equal chance to be just as competitive as large market teams. Now that the NBA has multiple cameras in every arena for recording and analyzing games as well as a “league pass” program to see games, why can’t the league take responsibility for televising all games and share the revenue equally among the teams? I think that how the NFL keeps the revenue similar for all teams in the league so they can compete on a more-or-less level playing field.
It’s a fair question, but there are several obstacles to what you’re suggesting. Caveat that I’m not anywhere close to an expert on these things. Readers may end up augmenting this response in the comment section. I suggest you read there too as it populates.
The first step in nationalizing revenues from NBA broadcasts would be to actually get those games broadcast. That’s a far bigger problem in basketball than it is in football. Football has 32 franchises, each playing one game a week. Allowing for byes, that’s…what? 13-14 games each week? Most of those occur on Sunday afternoon, with some on Monday and Thursday, but it’s contained. Divided between member networks, a broadcast partner might be devoting between 6-12 hours per week to the sport.
The NBA has 30 franchises, each playing 3-4 games a week. That’s 50 games or more. At 2.5 hours per game—the minimum you’d need—that would be 125 hours of programming to account for, running every evening across multiple time zones, on weekend afternoons too.
Current NBA broadcast partners are fine televising a limited number of games during targeted hours, just like NFL broadcasters do. Zero of the major broadcasters would want to devote four times that amount of airtime to NBA games, especially when a large number of those include teams from Utah, Charlotte, Portland, and the like. The commitment would be enormous. The ratings wouldn’t hold up. They’d never sell enough ad time to justify the endeavor, meaning they couldn’t pay the NBA enough to make it worth it.
To get this plan to work, the league would have to find a single, subscription-dependent streaming outlet (think Amazon or Netflix) to host games over a few dedicated channels. These outlets are more willing to absorb loss than actual networks. The holes in the plan are obvious:
- The NBA would be dependent on broadcast rights from that source to replace current local revenue from all 30 franchises. In fact the rights would need to exceed current revenue substantially, otherwise why would they make the change?
- The new cost would also include camera crews, production staff, broadcast trucks, on-air talent, and the like which are now paid for by local franchises and/or outlets. That’s not just a financial nightmare, but a logistical one. Nightly travel for everyone, enough crews to cover 11 games in a single day…ugh.
- The NBA would have to inform the same broadcast partner that’s paying a MINT for the rights (and financing all the broadcast crews) that other national rights-holders have first dibs on the best games, per their existing contracts. That’s a hard sell…like telling someone they can buy your entire 1984 basketball card set except the Michael Jordan rookie. Oh, and they have to display those other cards in their storefront window.
- The product, in the end, would look exactly like what League Pass looks like now. Except League Pass just piggybacks on the local broadcasts already in place. It doesn’t incur costs by adding to them or replacing them. Since this service already exists for people who are interested enough in basketball to buy it, the league is theoretically getting the revenue anyway, right now. There would be little reason for the NBA or any streaming service buying the rights to NBA games to assume that they could increase the national revenue stream enough to justify the costs and risks. It’d be like a grocery store saying, “We’re going to divert shoppers away from Checkstand 3 and make them buy their groceries through Checkstand 6 instead!” All you did is shift the lineup to a different place. You didn’t get more people to buy more product.
- The people you would get more revenue from is local consumers who want to see their team. The problem is, a huge number of those patrons are getting games for free now, either via over-air channels or part of their satellite/cable/streaming subscription. People in outlying areas have to pay extra, but in the team’s city itself, games are easy to access at cheap or at no cost. Now you’re charging them $100 or more a year for the same service via a different source. Most of them won’t pay. That means team viewership will go down the drain, threatening the integrity of the league itself. The money the league and its teams got from new, local subscribers wouldn’t offset the damage.
Summarizing: The NBA couldn’t sell that many games to broadcast partners. Any new broadcast partner would be taking on a cost they probably couldn’t recoup. They’d be taking on significant technical challenges. They’d also be getting 95% of the “hind end” of the product and very little of the cream on top. As a result, there’s no way they could pay the NBA enough to justify the switch from the current system. On top of that, 95% of the NBA’s fanbase would get screwed by the shift and a large portion of them would simply stop watching.
We also have to consider ad revenue. The league has a few national sponsors…the kind that get their names appended to All-Star Weekend events. But a good part of the revenue for broadcasts comes from local sources particular to each franchise.
Would the NBA or its broadcast-rights partners try to seek out even more national partners to fund this new system? If so, how many corporations with ultra-deep pockets and a need for name recognition via basketball are out there? Would the current national partners worry about their participation being diluted by this new influx?
If you try to maintain local connections, how does that happen? Nationalizing broadcasts means no local faces (including sales staffs and interpersonal relationships) anymore. How does a sales crew from New York even know to contact Localyokel Appliance in Gresham, Oregon? If they get the lead, how do they pursue it? We’re talking a whole new corporate department paid for by somebody, one far less in touch and effective than these teams currently have.
On top of that, why should Localyokel Appliance pay the same amount of money to reach a limited pool of subscribers to this new, non-area-specific network that they once did to reach literally everybody in their local area who tuned into the game?
If that weren’t enough, it’s an ill-kept secret that the league’s marquee and/or big-market franchises do very well with their local broadcast rights. That’s part of why those teams sell for $7 billion while the others only go for $4 billion or so. Having that taken away and redistributed by any means is going to cause a revolt among those franchise owners.
For all these reasons, adopting the NFL system of broadcast rights and revenue sharing is likely a non-starter. Since the NBA has just signed a multi-billion dollar national rights deal, I doubt that redoing the system is even on their radar. This league has 99 problems, but monetizing TV coverage ain’t one.
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