Make money doing the work you believe in
Two summers ago, I tried to make a simple argument:
The giant NBA media rights deal wasn’t actually that impressive.
Specifically, the NBA manipulated the deal to generate super positive headlines. They added a third partner, added more national games, and sold international rights. They also expanded from nine years to eleven.
And it worked! Almost every NBA analyst and pundit routinely mentions the NBA’s giant media deal, and almost no one mentions declining local sports rights. Some analysts predicted that the NBA salary cap would increase drastically year after year, capped at 10% per year.
Yes, the national media rights revenue was going up, but headlines about “tripling the deal” misled folks about the state of the NBA’s revenue health. The new deal wasn’t big enough to offset declining local media rights deals, which used to make up 15 to 20% of annual revenue. But the NBA was very hesitant to talk about local rights.
Well, we just got the NBA’s salary cap projections for and they are grim for the NBA. The increase is only 5.5% for the 2027-2028 season.
Here’s the key chart, comparing NBA revenue growth for the first three years after the last national media rights deal to this three year period:
Is the NBA revenue growing? Sure. But at half the rate as after the last national media rights deal. This number could impact teams that signed big contracts two years ago and may also explain why the NBA seemingly tamped down on expansion talk earlier this year.
Here are my links on this:
