Posts Tagged ‘NBC’

The History of the NBA and its TV Rights

Monday, April 28th, 2014

nba logo     tv logo

The National Basketball Association has a rich history of growth since their first television contract in the 50’s. One piece of quantitive data to represent this development is television rights deals. When we examine this information we see how the amount of money involved in the network and cable contracts has increased with each contract. This growth is consistent and exponential.

One important differentiation to understand is between “network” and “cable” television. Network television has been around longer and is delivered to homes through radio waves. Cable television was a later invention that came to surface around the 80’s. Cable TV essentially un-monopolized the network television market allowing for more viewer choice.

As the name implies, it is delivered to homes via cable. For purposes of this blog we will avoid redundancy by just talking about “network” television. The network and cable contracts both show similar trends. The network deals were between the NBA and networks such as ABC,NBC, and CBS.

celtics v lakersBird, Magic, and JordanLBJ

The NBA’s first “network” television contract was in the 1953-1954 season for $39,000 .  In the 1973-1974 season the contract ballooned to a 3-year contract worth $27 million dollars.  An explanation for this could be the NBA’s dramatic increase in popularity with the domination of players such as Bill Russell and Wilt The Stilt Chamberlin in the 60’s.

Another large jump in revenue was between the 1986-1990 and 1990-1994 contracts. The contract value went from $173 to $601 million. This can be equated by the phenomenal marketability of key players and teams such as Magic Johnson and the Lakers, Larry Bird and the Celtics and the emergence of a young Chicago Bulls star named Michael Jordan. If we were to name all of the influential players of the 80’s, by itself the list would greatly exceed our 250 word minimum blog!

The NBA’s current network contract was signed in 2008 and is the longest and priciest TV contract in the league’s history: 8 years and $7.44 billion . The forefathers helped grow the league into a powerhouse and current star players such as LeBron James continue to elevate the status of the league. However, the increase in talent and media coverage makes it difficult to see the ceiling in terms of NBA TV rights growth.

NBA Basketball

One last important point to make: The NBA has a large global marketplace. It is currently broadcasted in 215 countries. None of the figures we discussed included data beyond the United States.

 

 

 

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NFL and the history of its TV deals

Sunday, April 27th, 2014

 

The start of professional football can be tracked all the way back to 1869 where modified London football rules were used in a game of college soccer. It wasn’t until 1939 however, that the first NFL game was televised by NBC between the Philadelphia Eagles and the Brooklyn Dodgers. By 1951 the NFL Championship Game was televised coast-to-coast for the first time, December 23. The DuMont Network paid $75,000 for the rights to the game, in which the Rams defeated the Browns 24-17. By 1955, NBC became the television home to the NFL Championship Game, paying $100,000 to the league for the rights to telecast the league finale.

As Pro Football gained in popularity, it rights fees went up causing CBS to pass on NFL Football in the mid 1990’s and allowing the new FOX Television Network to gain a foothold in the broadcast sports realm. Today, the major networks pay upwards of $550 million a year to televise NFL games which can now be seen on cable, satellite and broadcast networks. NFL announced nine-year extensions to its broadcast television packages with Fox, NBC and CBS under which the networks are expected to pay roughly 60% more. The new agreements will run through the 2022 season as the current deals expired after the 2013 season.

The NFL’s new 10-year labor agreement and increased TV rights deals are the reason that NFL teams are worth $1.04 billion on average or twice as much as the average MLB team and three times what NBA teams command. NFL games represent 23 of the 25 most-watched TV programs this fall and they attract twice as many average viewers as broadcast primetime shows. Annually, the NFL redistributes upwards of $4 billion in radio, TV and digital earnings across its 32 teams, roughly $125 million apiece, plus an equal share for the league, and that number shows no sign of declining. The 19 highest-rated fall TV programs (and 28 of the top 30) were NFL games, and this year’s Super Bowl was the most-watched program ever. 5 of the many popular sports networks: ESPN, DirecTV, FOX, NBC, and CBS all have contracts with the NFL of roughly 3.985 billion dollars a season. ESPN pays $1 billion per season (18 games), DirecTV pays $1 billion per season (8 games plus NFL Sunday Ticket), FOX pays $712.5 million per season (102 games), NBC pays $650 million per season (18 games), and CBS pays $622.5 million per season (102 games).

T.V. rights have continued to escalade for the NFL and from what history shows will only continue to keep doing so. A new contract is underway with the NFL and major networks that will keep them under contract till 2022. The fan base is so large for the NFL, do to location in major cities across the U.S. & because of this, the demand for football is high. Households who are unable to see their favorite team live, can sit back in the comfort of their own home and watch the game televised almost anywhere in the U.S. Which is why football is the highest rated fall TV program.

We continue to see an increase in fan base in the NFL which brings in more popularity to the sport. As popularity and demands for the sport increase, more games will be televised, to the point where one day each game will be broadcasted nationwide. However, when that does occur a plateau may occur and profits may stop and just maintain a steady income. If this does occur which will be some time down the road, the NFL being money hungry will expand their horizons and aim for new markets, which is one of the reasons football is trying to spread to other parts of the world; I.E. Canada, Europe. This is also why some games are hosted in London, to help promote football and to expose others about the sport, so during the future it can expand and be broadcasted as a worldwide sport.

 

http://static.nfl.com/static/content/public/image/history/pdfs/History/2013/353-372-Chronology.pdf

 

http://www.nfl.com/history/chronology/1951-1960

 

http://nfl-tv-history.blogspot.com/

 

http://www.forbes.com/sites/kurtbadenhausen/2011/12/14/the-nfl-signs-tv-deals-worth-26-billion/

 

http://sportsillustrated.cnn.com/multimedia/photo_gallery/1103/nfl-inside-money-machine/content.2.html#ixzz308FRNGpe

 

http://www.youtube.com/watch?v=vhOAzRnwpdY