Q: The NBA is reported to have finalised agreements with ESPN, NBC Universal, and Amazon for its US national TV rights for an 11-year period starting from the 2025-26 season, for a total value of $76bn, which is 2.6x the NBA’s current value on a per-season basis. What is driving the big increase?

A: There are a number of factors behind the significant increase in the value of the NBA rights. The first is the long-term nature of the current and the upcoming rights cycles, which are commonplace in the US, but far less common in Europe. The current deal started in 2016; and since then, the US TV market has grown by 16% in revenue terms. However, the percentage increase in the value of the new NBA deal (+159%) far exceeds the rate of growth in the US TV market, which suggests that the length of the deal is not the primary driver of the value growth.

The most important factor is the highly competitive nature of the US sports rights market. Competition for sports rights between US broadcasters has always been high, but this has only intensified in recent years, due to:

• The greater predictability of the investment in sports rights relative to other forms of entertainment – making rights to premium sports such as the NBA a valuable investment at a time when linear viewing continues to decline and the performance of original content challenging to forecast. This is important both for maintaining broadcast revenue streams, through carriage fees for sports channels; and through driving streaming revenues, via either nascent or planned sport streaming services
• The growing share of spend on sports rights from streaming services, injecting fresh competition into the rights process. Streaming plays an important role in the new NBA deal: according to reports, Amazon will pay a reported $1.8bn per season for the rights to the NBA, making it Amazon’s largest ever investment in sports rights, while Peacock could get regular streaming-exclusive games under the new deal.

Q: What characteristics make the NBA specifically so appealing to broadcasters and streaming platforms?

The NBA is the second most popular sports property in the US, with a long history of having its games shown on premium channels – meaning its fans typically expect to pay to watch games on TV. NBA fans also typically exhibit a higher propensity to pay than average - according to a survey of US sports fans Ampere ran in Q4 2023, the average NBA fans says they would be willing to pay $19 per month to watch all their favourite sports – compared to an average of $16 among NFL, NHL and MLB fans.

The NBA also skews younger (average age 38.2) than the typical US sports fan (average age 40.2). Indeed, the NBA is the most popular competition among 18-34 year-olds, which broadcasters – and advertisers – are always keen on being able to target.

Q: Is this an isolated case or part of a larger trend? What properties can expect to see similar levels of growth in the value of their TV rights?

A: The US sports TV rights market is undergoing a period of virtually unparalleled inflation. Between 2019 and 2024, the overall value of the US sports rights market has grown by 54% - compared to an overall TV industry revenue growth of 15%. Most notably, the NFL saw an increase in the value of its domestic TV rights by about 70% under the current deal; but the list of sports properties experiencing double - if not sometimes triple - digit growth rates includes properties across the entire spectrum of sports, including:

• College sports (NCAA Championship: +238%; Big 10: +152%, College Football Playoffs: +177%)
• Tennis (French Open: +191%)
• Ice Hockey (NHL: +213%)
• Soccer (MLS +158%, UEFA Champions League +253%, English Premier League +170%, NWSL +3,144%)
• Motor Racing (F1 +1,600%)

This trend has been broadly consistent across different players, with broadcasters increasing their sports budgets to compete for rights. In the past five years, every single major sports broadcaster has seen its total spend on sports rights increase, from Disney (the largest sports broadcaster in the country) seeing its US sports rights budget increase by 18%, to Comcast and Paramount increasing their sports budget by 86% and 100% respectively. During the same time period, streaming platforms have invested increasingly to acquire sports rights for themselves; and by the end of 2024, four streamers will feature in the top 10 investors in sports rights in the USA.

With this level of competition, it is fair to expect that more properties will see similar levels of growth in the value of their TV rights. However, the long-term nature of many of the sports rights deals struck in recent years means that as much as 90% of the US sports TV rights by value are already locked-in until the end of the decade. UFC rights will be the next major property to be up for grabs in 2025, when the current deals with ESPN expire. At present, UFC generates $300m from two separate deals (a broadcast deal and a streaming-exclusive deal), but its recent growth in popularity – particularly among younger audiences – will likely see multiple suitors at the point of renewal.