ESPN and NBA Deal Essay

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ESPN-NBA Deal



Media companies play a crucial role in the multibillion dollar sports industry. They help sports clubs and leagues broadcast their events to tens or hundreds of millions of viewers locally and internationally. ESPN is one of the major broadcasters of sports events. The company broadcasts diverse sports events including basketball, football, soccer, baseball, and cricket. It has particularly been a major broadcaster of National Basket Association (NBA) events since the early 2000s. NBA is the top and most popular men's professional basketball association not only in North America, but also worldwide. In 2014, NBA and ESPN renewed their deal to the tune of $24 billion to broadcast the league's events up to 2025 (Riccobono, 2014). Focusing on the ESPN-NBA deal, this paper discusses why media companies acquire the rights to broadcast sports events.



Basketball is one of the most popular sports in the U.S., with NBA events attracting 16,000-19,000 attendees on average (Experian Data Quality, 2016). NBA events are also viewed by tens of millions of fans across the country and globally. Statistics indicate that 5% of American adults regard basketball as their favorite sport (The Harris Poll, 2016). The huge popularity and fan base of NBA events explain why media companies constantly fight for broadcasting rights.
The current deal between ESPN and NBA is valued at $2.6 billion annually for nine years starting from the 2016-2017 season. By the end of agreement, ESPN will have paid NBA a total of $24 billion, which is the largest deal in the history of the league. With the deal, player salaries are expected to increase, making Lebron James the topmost paid basketball player ever (Riccobono, 2014). More importantly, the deal will significantly boost the exposure of NBA events domestically and internationally.



The deal means even a lot more for ESPN, which has a viewership of more than 90 million households across the U.S. under paid subscription model. The present deal has some aspects that make it more beneficial for ESPN. Unlike under the previous deal where ESPN nationally televised 90 regular season games, ESPN now broadcasts 10 extra games (ESPN, 2016). This certainly implies more revenue for the company. In addition, consumers are now able to stream nationally televised games via the internet and their mobile devices without paying for cable. A win for the consumer means a broader stream of revenue for the company. Even so, with ESPN paying NBA more under the current deal,….....

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References


Riccobono, A. (2014, October 6). NBA TV deal 2014: what the $24 billion new agreement means for the league. International Business Times. Retrieved 15 October 2016 from: http://www.ibtimes.com/nba-tv-deal-2014-what-24-billion-new-agreement-means- league-1699971

Experian Data Quality (2016). North America's most popular sports. Retrieved 15 October 2016 from: https://www.edq.com/data-quality-infographics/north-america-popular- sports/

The Harris Poll (2016). Pro-football is still America's favorite sport. Retrieved 15 October 2016 from: http://www.theharrispoll.com/sports/Americas_Fav_Sport_2016.html

ESPN (2016). NBA extends television deals. Retrieved 15 October 2016 from: http://www.espn.com/nba/story/_/id/11652297/nba-extends-television-deals-espn-tnt

Schaub, A. (2002). Sports and competition: broadcasting rights of sports events. Retrieved 15 October 2016 from: http://ec.europa.eu/competition/speeches/text/sp2002_008_en.pdf

Cave, M., & Randall, R. (2000). Sports rights and the broadcast industry. Retrieved 15 October 2016 from: http://dspace.brunel.ac.uk/bitstream/2438/850/1/00-18.pdf

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