How The NBA's New Deal With Disney/TNT Takes One Step Forward, One Backward On Streaming
from the almost-there dept
For as long as I’ve had the privilege to write for Techdirt, I’ve had a special interest in sports leagues and their methods for broadcasts, with a particular eye towards blackouts and internet streaming. My motto has always been: just let me watch the damned game! It’s never made sense to me how the major pro sports leagues seem to pass on opportunities to expand streaming options, particularly given the trend towards cutting the cable cord that continues to this day. In conjuction with this is the fact that sports broadcasts remain one of the few things keeping cable television relevant and preventing subscription numbers from absolutely tumbling. The moment sports become easily accessible via the internet, with local blackouts removed and ad revenue driving the costs down, it’s over for cable.
That’s what makes the new broadcast deal the NBA recently signed with ESPN and Turner Broadcasting somewhat exciting, as the league has insisted on expanding the streaming availability in certain areas, even while keeping the streaming operations with Turner. The landmark deal, which is for $2.6 billion annually, should mean expanded viewing options for fans. But first, the bad news.
Turner currently runs NBA.com, NBA Mobile, NBA TV, and NBA League Pass, and will continue to do so. This runs counter to the recent trend of leagues clawing back digital operations that they’d originally outsourced. In the early 2000s most sports leagues decided they didn’t have the expertise to deal with digital and mobile, so they let somebody else pay them to do it. But as this revenue stream has grown, so has the leagues’ desire to bring digital back into the fold. This will not be the case in the NBA.
Which is unfortunate for a number of reasons. First off, the NBA.TV product is pretty sub-par compared with what the other major leagues are doing in streaming. MLB.TV in particular has set the standard, with all kinds of options for different broadcasts, camera angles, and announcing calls. Even what the NFL does in putting many of their games on the websites of the broadcast partners for free is a decent platform. Turner, for its part, has never seemed up to the task. The other reason why it’s important for leagues to take back ownership of their streaming product is because it severs one of the ties to a broadcast partner with an interest in driving most viewers to the television product. Once leagues expand their streaming product and begin monetizing the ad revenue that can come from it, they need television far less, and streaming will really open up. That can’t happen under this deal.
But that doesn’t mean the NBA doesn’t see the writing on the wall long-term. To understand the following part of the new contract, you have to also understand that the NBA insisted on expanded nationally televised games. The new deal means no less than roughly 14% of the games will be televised by either ESPN/ABC or TNT. It may not seem like a huge number, but this is a significant move, something like a 20% increase in games available nationwide. Couple that with the following and it should be easy to see what the NBA has planned for the next time it negotiates a broadcast contract.
You’ll be able to stream nationally televised games without needing cable: Currently, the NBA’s only streaming option is NBA League Pass, which is a steaming pile of garbage. One of the biggest problems is that the 142 nationally televised games, 96 NBA TV games, and all playoff games aren’t available, meaning you can’t actually watch the most important games. The NBA fan still needs to have cable.
But per today’s announcement, the league has “established a framework” with ESPN to “negotiate the launch of a new over-the-top offering in which the league would receive equity interest.” In this context, over-the-top means “internet and mobile streaming.” According to the Wall Street Journal, this streaming service will be separate from ESPN’s WatchESPN app, which is a walled garden you can access only if you already pay for cable. The details are far from finalized, but it looks like fans will soon be able to watch nationally televised games without having to pay for cable, a major consumer win.
Bigger than most even realize, I suspect, because this is a move designed to expand the streaming product as a standalone from cable subscriptions, such that the next contract will have an even larger streaming option provision, if it includes the broadcast partners at all. If the NBA can hook fans on streaming for free, it can use that to reclaim the streaming product the next time around and build an ad-revenue base off of the viewership numbers.
If you’re wondering why Disney and TNT allowed for this at all, the answer is easy: they had to. As I said, sports broadcasts are driving an insane amount of the cable business being done today and none of the other major sports leagues have deals up for renewal any earlier than 2020. The NBA was a huge commodity. What’s interesting is seeing the obvious positioning of streaming the NBA is presenting for their future.