Bill Streicher-USA TODAY Sports
NBA revenue is poised to skyrocket thanks to the league’s new TV rights deal worth more than $70 billion over the next 11 years. However, recent NBA rumors have revealed that nearly half the league could also be on the brink of a massive financial hit.
Major League Baseball is currently going through a similar problem stemming from broadcasting deals with regional sports networks. The collapse of the Diamond Sports Group, which operates Bally Sports has cost tens of millions of dollars in revenue for clubs around the league.
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As a result, according to Evan Drellich of The Athletic, MLB will be redirecting luxury tax dollars to help a vast number of teams who have lost significant revenue from the loss of TV deals or reduced fees for the broadcasting rights to their games. Soon, the NBA could have the same problem.
According to Tom Friend of the Sports Business Journal, the Diamond Sports Group’s filing for bankruptcy in 2023 could now lead to the company cutting ties with multiple of its partnered teams this year. Furthermore, DSG is also considering reducing the fees it is paying to other teams for the broadcasting rights to their games.
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The teams reportedly at risk of losing their regional TV deals outright – Dallas Mavericks, New Orleans Pelicans, Oklahoma City Thunder, Detroit Pistons and Memphis Grizzlies – would be at risk of losing tens of millions of dollars in revenue. While there is reportedly a chance that DSG only terminate its contracts with three of those teams, the ramifications would still be significant.
Other NBA teams will also have to take a hit. DSG has TV rights deals with the Milwaukee Bucks, Atlanta Hawks, Miami Heat, Charlotte Hornets, Orlando Magic, Cleveland Cavaliers, Los Angeles Clippers, Indiana Pacers, San Antonio Spurs and Minnesota Timberwolves.
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The SBJ reports that those 10 teams are expected to have their rights fees cut by upwards of 30 percent to 40 percent for the 2024-’25 NBA season. If that course of action is taken, the teams could lose up to $16 million in revenue.
As Colin Salao of Front Office Sports detailed, teams in danger of having their contracts with DSG wiped out are already exploring other options. However, any deal made with a local TV network or even direct-to-consumer packages for fans would not come close to the revenue generated under the original contracts.
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As a result, the NBA might have to explore similar actions as MLB to help teams make up for the lost revenue. Considering DSG’s previous decision forced many MLB teams to tighten their wallets, limiting movement in both free agency and at the MLB trade deadline, this storyline could become a factor in NBA rumors for the clubs involved later this summer.