NBA Extends TV Deals

The NBA owners owe a huge debt of gratitude to David Stern. Demonstrating his worth once again, Stern delivered an extension of the league's television contracts for eight years, through the 2015-16 season, with an approximately 20% increase in rights fees, up to about $930 million a year, in an environment of declining ratings and mounting criticism of his league and its product. In short, a stunning achievement.

To obtain the increase, the NBA has given its broadcasting partners, ESPN/ABC and TNT extensive new digital media rights, including media not yet discovered or in use. The digital rights include the right to broadcast live games on the web and mobile TV, as well as through digital means not yet developed.


"This agreement sets a new standard -- it is the most expansive package of rights we've acquired from a major professional league in our 27-year history," ESPN president George Bodeheimer said. "We're thrilled to take a major step forward in our relationship with David Stern and the NBA with this broad, global agreement. The scope of this deal and the new rights we obtained offer us tremendous opportunities to serve NBA fans like never before -- in the U.S., around the world, and through any device."

It is the expansive new digital media rights that enabled Stern to craft a package containing a substantial rights fee increase. Today, it looks like a winner. In 2015, will he have given away the store too cheaply? Only time will tell but it certainly appears as if he has retained no flexibility for any upside. Now, remember, I haven't seen the contract so there may be all kinds of contingent upside built in that no one is discussing publicly. I sure wouldn't if I were them.