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Marketplace

How the NBA TV deal is already having an effect

Nova Safo and Lawrence Murray Oct 28, 2014
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The NBA season starts Tuesday night with a lot of hope toward the future. Earlier this month, the basketball league announced a $24 billion deal to allow TV networks to carry its games, nearly tripling the league’s broadcast revenues compared to its previous deal.

But the trickle-down effect of the cash infusion started even before the deal  scheduled to start in 2016 and last until 2025  was even signed. That’s because NBA watchers and insiders had been expecting a more lucrative TV contract, although best guesses had assumed a doubling of fees, not a near tripling.

Nevertheless, that anticipation of a cash infusion had already had an effect, says Victor Matheson, who specializes in sports economics at the College of the Holy Cross.

“Just a couple years ago, we thought that a team like the Clippers may be worth $500 million, maybe a billion. And all of a sudden the Clippers are selling for $2 billion,” Matheson says.

Valuations are forecast to go up for the other 29 teams as well. And players have also been factoring in the expected TV cash, too, says Raymond Sauer, who teaches sports economics at Clemson University.

“LeBron James signed a short-term contract, so he’s positioned to re-up, as it where, with the new revenue streams,” says Sauer.

And for those players who don’t have contract renewals coming up, the NBA and the players’ union are now looking into how to best spread the wealth. One of the options that may be considered is a combination of a raise of the current salary cap  set at 51 percent of revenues  and a payment to the union, which then would distribute money among players.

The NBA, by the numbers:

$24 billion

The deal the league struck to allow TV networks to carry its games, nearly tripling their broadcast revenues.

11.7 million

The number of followers for the NBA’s official Twitter handle. That’s the highest of the four major American sports leagues, by far. (NFL = 7.68 million, MLB = 3.93 million, NHL = 2.8 million.)

6

The number of NBA teams with at least one million followers on Twitter. The Los Angeles Lakers lead all teams with 4.02 million. The other five teams are the Miami Heat (2.78 million), the Chicago Bulls (1.76 million), the Boston Celtics (1.54 million), the Orlando Magic (1.2 million), and the New York Knicks (1.04 million).

3

The number of years the NBA has presented “Social Media Awards.” The awards were slightly expanded in 2014 with more categories.

$2 billion

 The record-breaking price Steve Ballmer paid for the Los Angeles Clippers earlier this year.

29 teams

 Besides the Clippers who hope the league’s coffers keep flowing.

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