Amazon has secured the rights to the TV broadcast of games from the US professional basketball league NBA. Disney will also remain a partner. This is what analysts think about the billion-dollar deal in US sports.
• Amazon buys rights to TV broadcast of NBA
• Disney also remains a key partner
• Analysts see light and shadow
Amazon secures rights to NBA broadcast
Last week it was announced that the North American professional basketball league NBA had concluded a billion-dollar deal with Amazon regarding future TV broadcasts. Specifically, it concerns the eleven seasons from 2025/26 to 2035/36. The volume is said to be around 76 billion US dollars, according to several media reports.
Until now, the broadcaster TNT Sports held the rights to the TV broadcast, but now it is being replaced. TNT division Warner Bros. Discovery, which has broadcast the league for decades, wants to challenge the decision. “We have matched Amazon’s offer, which we are contractually entitled to do,” dpa-AFX quoted a statement from the broadcaster. “We believe they have grossly misinterpreted our contractual rights with respect to the 2025/26 season and beyond, and we will take appropriate action,” Industry Leaders Magazine quoted from a statement from TNT. However, Ross Benes of eMarketer points out, according to the magazine, that this could be a risky move that could jeopardize or even prevent possible future partnerships with other sports leagues. “A lawsuit could follow, but that would be risky. Even if WBD won a hypothetical lawsuit to get the NBA back, it would have to work with an angry NBA that just sued it. Such a move could also deter other leagues from doing business with them,” the expert predicts.
Meanwhile, Disney will remain a key partner with the broadcasters ABC and ESPN. “Our new global media agreements with Disney, NBCUniversal and Amazon will maximize the reach and accessibility of NBA games to fans in the United States and around the world,” NBA boss Adam Silver is quoted as saying. And he continued: “These partners will distribute our content across a wide range of platforms and help transform the fan experience over the next decade.”
NBCUniversal, Disney and Amazon
According to the future contract, NBC will broadcast around 100 regular season games annually. Amazon will also show 66 regular season games each season via Amazon Prime Video, further intensifying its expansion into live streaming of sports broadcasts. 80 regular season games, including the NBA Finals, will be shown on Disney.
As Industry Leaders Magazine pointed out, the deal is expected to significantly increase the NBA’s revenue, making it the second richest sports league in the US. According to Tom Forte, senior consumer internet analyst at Maxim Group, professional sports leagues favored companies that they believed “can pay the most for the rights to broadcast their games now and in the future,” Industry Leaders Magazine quoted. The deal is also expected to help the NBA overtake Major League Baseball, the magazine estimates.
Analysts see light and shadow
As some analysts noted, the deal is likely to represent a significant financial commitment. “Each partner will likely cut back on some entertainment spending by reallocating their content budgets to sports,” MarketWatch quoted analysts at MoffettNathanson as saying. While the deal is certainly seen as a win, it also presents a challenge. Analysts are wondering how Amazon, Disney and NBCUniversal will make money on the large payments to the league. “Of course, working with the NBA comes at a high cost,” said analysts at MoffettNathanson. “Disney, NBCU and Amazon will collectively pay out an average of $6.9 billion per season over the term of the new contracts.” “How the NBA’s new partners plan to monetize these rights packages and break even (or perhaps even make money) on this investment is a complicated question,” MarketWatch quoted the experts as saying. According to the analysts, the companies will probably have to rely primarily on advertising to ultimately get something out of the deal financially.
Since the deal was announced on the NASDAQ, Amazon shares have risen by around 1.3 percent to $183.20. Since the start of the year, the price has risen by almost 21 percent. Meanwhile, Disney shares on the NYSE have gained around 2.6 percent since last week to $92.14. Since the beginning of 2024, the stock has risen slightly by around two percent.
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2024-07-30 14:23:00
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