The Wall Street Journal is reporting that the NBA is in the process of renegotiating its national TV rights package with Walt Disney and Time Warner and are looking for a 100 percent increase to roughly $1.8 billion per year.
Disney currently pays roughly $485 million per year to broadcast games on ABC and ESPN while Time Warner pays $445 million for broadcast rights on TNT, according to the article.
NBA owners have a meeting scheduled Tuesday to discuss the next TV-rights deal and other matters, the Wall Street Journal reports.
If all this sounds familiar it is because I have been beating this drum steadily for the past year. It's important to keep this in mind as we assess not only the current contracts being handed out to the likes of Jodie Meeks but also while considering the eventual worth of restricted free agent Greg Monroe, and just how much of an albatross of a deal already handed out to Josh Smith.
Also, Andre Drummond is going to be extremely expensive.
And it also explains things such as why LeBron James would have an opt-out clause in his new deal with the Cleveland Cavaliers after two years and how Steve Ballmer could pony up $2 billion for the Los Angeles Clippers.
Essentially, because TV ratings are doing well both nationally and in local markets, and live sports is somewhat immune to DVRs, networks are able to charge a premium during sports coverage and those professional leagues have the bargaining power to ask for huge increases in the rights to broadcast those games.
Even under the old deal, the NBA salary cap saw a bump of roughly $5 million this year and anticipate another bump in the $3 million range next year. Teams get roughly $30 million under the terms of the current TV deal so doubling that deal could mean up to $60 million in team's pockets even before accounting for any other revenue source.
But the Players Union will have something to say about how this new windfall is divied up between teams and players as the current collective bargaining agreement has an opt-out for both sides in 2017.