Hoop streams! The NBA is closing in on deals with NBC, Amazon and ESPN that point to the staggering value of sports rights and the anxieties of media's biggest players.
As Ed McMahon used to say, "Heeere's Johnny!" For today's media companies, that Johnny is sports. The NBA sweepstakes has thrown traditional media into turmoil, exposing their fears about cable's decline and their shaky footing in the streaming landscape. More telling is that it underscores a central dilemma: sports content is incredibly expensive, yet essential for attracting viewers in a world dominated by streaming services.
The numbers are a constant barrage of non-stop 3-pointers. NBC's part of the deal with the league averages $2.5 billion a year to show roughly 100 games per season. Amazon’s $1.8 billion-a-year package is like its Prime Deals and includes a grab bag of different games from regular-season and playoff games, to a piece of the conference finals. Disney would retain an NBA package and would continue to air the NBA Finals, with payments averaging about $2.6 billion a year. Separately, ESPN’s deal allow the company to air games on its direct-to-consumer streaming service, which is set to launch in 2025.
The streaming industry has too many ugly ducklings. While the size of the deals may make headlines, they also bring with them questions and concerns especially at NBCUniversal. Why? The streaming business is still highly volatile and as of now, a perennial money loser for anyone not named Netflix. In the case of NBC, its streaming unit Peacock has been more like a floundering duck with a struggling subscriber base and erratic content development. Whether the NBA deal helps drive subscriptions remains debatable, but with a shiny new sports package, NBC may even raise prices for Peacock.
Amazon along with Big Tech are the ultimate puppet masters. For Amazon, the NBA package is yet another building block as it brings more live events into Prime. That has a potential big payday for the ecommerce giant as it continues to add and solidify its subscription base. More importantly, Amazon package likely lessened the financial load for NBC and Disney/ESPN.
We saw this with Major League Baseball, and even more so with the NFL, but the price of these licensing deals are increasing astronomically thanks to Big Tech. It also has plenty to do with the continuing transition to streaming and the challenge to turn a profit. Sports and other live events appear to be the golden goose, but as many of the old school media companies are discovering, you have to pay the piper to even play https://lnkd.in/gv_W8wvz #nba #sports #streaming #television #nbcuniversal #amazon #espn #entertainment