NBA Agrees To New TV Deal

http://basketball.realgm.com/wiretap/235089/NBA-Agrees-Upon-Nine-Year-$24B-Deal-With-ESPN-TNT-Through-24-25



NBA Agrees Upon Nine-Year $24B Deal With ESPN, TNT Through 24-25
Oct 05, 2014 9:44 PM EDT


The NBA has reached agreement on a long-term media rights deal with ESPN and TNT.

Rich Sandomir of the New York Times reports it will be worth $24 billion over nine seasons.

The deal will run through the 24-25 NBA season.

The Finals will remain on Disney's ABC network.

Disney has been paying the NBA about $485 million a year under its existing contract, while Turner has paid about $445 million annually. Those deals were set to expire after the 2015-2016 season.

NBA Commissioner Adam Silver is expected to announce the media deals in a news conference Monday morning.

Via Ben Cohen, Shalini Ramachandran/Wall Street Journal





bob
MY NOTE: MUCH more money. The impact on the salary cap will be big.



.

Hi,
I hope ABC and TNT will find ways to pay that money without extending time for commercial breaks to 10 minutes.

AK

Don't bet on it, Sinus. The good news is that we'll be able to eat our dinners without missing a second of action.

$24 billion? Is that a typo? That's even more than I make.

Sam

Early estimates say the cap could be $91M by the time of the 2016-17 season... Wow.


http://www.startribune.com/sports/wolves/278327491.html


Tripled TV deal could rock NBA salary cap

Article by: KENT YOUNGBLOOD , Star Tribune Updated: October 7, 2014 - 6:08 AM

Player payrolls could rise to as much as $91.2 million in 2016-17.


The Timberwolves were getting ready Monday for their first preseason game. Meanwhile, an announcement in New York fundamentally changed the NBA game everyone will be playing for the next decade.

The league announced a new broadcast and digital rights agreement with ESPN and TNT, a nine-year deal reportedly worth $24 billion that will begin with the 2016-17 season. It more than triples the value of the previous eight-year, $7.4 billion deal that will expire after next season. With the strokes of a pen it took to sign the deal, the near future of the league was changed, though it’s unclear how long it will take to find out just how much.

“What it is is a game-changer for the league,” said Flip Saunders, Timberwolves coach, president of basketball operations and minority owner, after Monday’s practice. “Adam [Silver, league commissioner] and the NBA did an unbelievable job in negotiating. I think it shows the impact of what our league is doing, from a national perspective. It’s one of those things that helps everybody.”

According to some analysts, the salary camp that is set for slightly over $63 million for this season could swell to as much as $91.2 million for the 2016-17 season. Which is why, in anticipation of this deal, superstar LeBron James signed a two-year deal — with the 2015-16 season a player option — when he returned to Cleveland. That means he, along with a star like Kevin Durant, could become free agents just when the windfall is scheduled to kick in.

“Our game has never been better,” Silver said when announcing the deal.

It remains to be seen how the new deal will be implemented. There already is speculation that the NBA Players Association will opt out of the current labor contract in 2017. Many expect the new deal will be phased in next season to ease the transition.

But the fact is the deal means the new contract is, as Saunders said, good for everyone. For players, for team executives and for owners, who will see the value of franchises continue to rise.

“There is no question that, when you’re in a league and you’re a coach or a player or an owner — no matter who you are — when you have more money coming in, that’s a benefit to people,’’ Saunders said. “But there is still a ways to go. Nobody knows yet how they’re going to cut the pie or anything else. I guess you’ll have to wait and see the dynamics. But, you’re going to get so much money, and you have 15 roster spots. So the money gets divided among those players.”

So how will that affect the Wolves?

The new TV contract could further complicate the already complex negotiations with Ricky Rubio’s agent Dan Fegan on an extension to the rookie contract Rubio signed in 2011. It would seem unlikely Fegan will come down much from his bid to land Rubio a maximum four-year, $62 million contract; any max contract signed now might suffer by comparison once the new deal kicks in. If Rubio doesn’t agree to an extension by month’s end he will be a restricted free next summer. He could then opt to accept a $6.7 million qualifying offer to become an unrestricted free agent in the summer of 2016.

“It’s good for the players, the money,” Rubio said of the new deal. “But I just play basketball because I love basketball.”

Other Wolves players will be affected, too. Thaddeus Young has a player option of $9.7 million next season. If he chose that option he, too, would be a free agent in 2016.

“This does change the landscape,” Young said. “I just found out about [the deal] this morning. It is definitely something I’ll talk to my agent about. It has changed a lot of things.”

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All this means is that the large market teams can smash the piggy bank open. Right now, the cap is $63M, so we're talking a $28M increase in one year.


KJ

Mind-boggling! Wish they'd stop stuffing their own banks like pigs and provide more support for retired players.

Sam

another article that points to a hard cap wanted by the owners

http://www.cbssports.com/nba/writer/ken-berger/24740037/nba-enters-new-stratosphere-with-tv-deal-but-how-will-pie-be-split


the key part for me:

The next frontier, according to a person with intimate knowledge of the league's labor negotiations, is an old frontier: a hard cap. With so much money entering the system, some owners might want to "push for a hard cap even further," the person said. Owners may also push for spending exceptions, such as the two-tiered mid-level exception and the bi-annual exception, to become things of the past. With the cap going from $63 million to $91 million, who needs exceptions, the league might argue? To which the players might respond: With so much money coming in, who needs a cap at all?

Of course, National Basketball Players Association executive director Michele Roberts weighed in with a statement Monday, saying that the new broadcast deals were "good news for all of the stakeholders in the business of the NBA." But she added, "Our job will be to ensure that the players receive their fair share ... and that we do everything possible to maintain the growth and popularity of the game."

In return for a hard cap, one NBA labor expert predicted that the league might offer to increase the players' share of revenues as a bargaining chip to achieve the only victory it was not able to check off during the 2011 lockout: an NFL-style hard cap. As the NBA's commissioner emeritus, David Stern, might say, life is a negotiation.

how to avoid a lockout in 2017 and have a fair CBA extension/adjustment after the new TV deal:

right now based on cap numbers from basketball-reference website the average cap number per team is about $71M.

this should be the KEY number for  the NBPA.

since each team will get an increase of about $34M the FIRST year of the new deal we have the parameters for a fair HARD salary cap.


using the current 51% of revenue in the CBA today (more on that later) the new average team salary will be more like $88Million in 2016.

however, the players were forced to lower the % of league revenues they got in salary's in the last CBA, under the guise that some teams were losing money. The player went from getting 57% of league wide revenue to 51% (at best) in the current deal.

under the new TV contract NO TEAM will be losing money (much like the NFL).so that owners argument is no longer valid and the players will want their portion of league revenues to climb back to previous numbers.

so the owners (lead by Silver) SHOULD propose an adjustment to the CBA that does the following to avoid a lockout/strike that would harm their own business.

1) all new TV moneys will be used on player salary's based on the old 57% of revenue rule. This will increase player salary's an additional $63Million total in the first year. so in 2016 the average team salary's will need to raise to $90Million.

2) NBA will use a HARD Salary cap set in 2016 at $100Million per team. No exceptions to the cap will be needed or used anymore. The NBA MINIMUM team salary's will be set at $80Million as well.

3) raise the rookie wage scale and all vet and rookie minimum salary's accordingly.


since most of the owners do seem to want an NFL style hard cap and the players will want an increase in the % of revenue they receive now that no teams can claim they are on the brink of bankruptcy , this could be the type of deal that could make sense to both sides.

I should have noted this would increase player % of overall revenue form 51% to about 52% in the first year. the NBPA will probably want more like 54-55%( at minimum) at some point.