LEARNING MODULE 💡

That’s Showbiz Baby 📺

The largest revenue driver in basketball is big media. Companies like Warner Bros and Disney (ESPN) pay billions of dollars annually for long-term contracts to broadcast games to millions of fans across the country. This accounts for 41% of the league’s revenue each year.

The NBA’s media contract expires next year, and these companies are currently negotiating for the rights. There’s just one minor problem: fewer and fewer people are watching the NBA. 📉

Obstacles for the NBA

• 👀 TV Viewership Trends: Over the course of 20 years, the average rating for regular-season NBA games has dropped 42%

• ⭐️ All-Star Game Decline: The 2023 All-Star Game viewership hit a record-low 4.6 million viewers. While there was a 14% increase to 5.5 million viewers in 2024, it still indicates challenges in maintaining audience engagement.

• 👴 Aging Stars: The NBA's biggest stars of the past two decades—LeBron James, Steph Curry, and Kevin Durant—are nearing the end of their careers, raising concerns about maintaining high viewership numbers without these marquee players.

So, ratings for regular-season NBA games have dived 42% over the past 20 years. Surely this spells a discount for the Logan Roys of the world bidding on those eyeballs, right?

Wrong! The projected value of the new media deals is more than double the previous one and is expected to bring in $6.9 billion per year for the league. How can this be? The cards seem stacked against the NBA, 🂡 with leverage favoring the good people at Warner Bros.

Enter Adam Silver, commissioner of the NBA and strategic wizard 🧙 who’s navigating the waters of media rights perfectly.

Adam Silver’s Uno Reverse Card 🔄

• 🧩 Modular Events: Silver has increased the media value of NBA properties by breaking events like the All-Star Game and early playoff games into distinct, sellable parts. The inaugural In-Season Tournament was a significant success this year, with group-stage games on ESPN and TNT averaging 1.5 million viewers.

• 🤝 Enabling Negotiations: Rather than simply renewing existing deals with TNT and ESPN, Silver opened negotiations to third-party bidders after the incumbents' exclusive negotiating windows expired. NBC, Amazon Prime, and potentially other new players are now vying for NBA rights.

• 🎰 Diversifying Revenue Streams: Silver has consistently pursued new revenue streams, from supporting legalized sports betting to selling jersey patch sponsorships and allowing private equity funds to invest in NBA franchises.

We’re approaching the final stages of contract negotiations and will soon have the numbers set in stone, lighting the way for a prosperous decade in the NBA. The only question is, who’s going to be the face of it? 😎

If you liked this, here’s the more detailed piece that inspired this article from Front Office Sports.

THIS PAST WEEK ⏮️

No more Croissants 🥐

The French Open is underway, kicking off a busy Summer in Paris as the Olympics 🏟️ and Tour de France 🚴 also come to town in July.

While it’s always one of the four major tournaments in the tennis season, this French Open is a bit different, as it was likely Rafael Nadal’s last showing ever at the event. Nadal is unequivocally the best player ever to step foot on a clay court, winning 14 of his 22 grand slam titles at Roland Garros and racking up $23.7 million in winnings 💰 in the process.

Tennis is interesting because the major tournaments are played on different surfaces. The Australian Open and US Open use hard courts, Wimbledon is played on grass, and the French Open is held on clay. Imagine if a quarter of hockey games were played on sand instead of ice! 🧊

Something about the clay in France has suited Rafael Nadal 🧬 for the better part of two decades and if this really is the end, the fans at the red courts of Roland Garros will be sad to see him go.

After his loss on Monday, he gave an emotional speech all but marking the end of his storied run. We also posted a video breaking down Nadal’s career on Instagram and Tiktok.

Choose your Fighter 🏎️

This past Sunday hosted two historic races, the Monaco Grand Prix (F1) and the Indianapolis 500 (INDYCAR).

Although they are very different sporting events at their core (one took place on a tight street circuit and the other on a 2.5-mile oval), the excitement in racing surely stems from the passes and aggressive maneuvers on the course.

This excitement was abundant at the Indy 500. There were 649 overtakes throughout the race, ⏭️ the most since 2017, and an unbelievable finish.

In the Monaco Grand Prix, the top 10 starters finished in the exact same positions with only four overtakes in the entire race. 😴

Sure, the yachts, 🛥️ parties, 🎉 and spectacle 🏨 of Monaco are a sight to behold, but the new age of F1 cars has outgrown the tight racetrack. Supreme engineering has turned what used to be a soapbox derby car with a lawnmower engine into a motor monster strapped to the gills with sensors, optimized for perfect aerodynamics.

Fans and dissenters alike mostly agree the track in Monaco isn’t fit for a circuit race anymore ⚠️ but taking away the crown jewel of the richest country in the world might be harder than it sounds.

If you’re looking for an unhealthy discussion on the topic, the chart was featured in a tweet from Joe Pompliano where race fans had a field day on the comparison.

THIS NEXT WEEK ⏩

NBA Playoffs 🏀

The NBA Finals are set. The Celtics took care of the Pacers in a clean sweep while the Mavericks polished off the Timberwolves in 5 games. Our chart is beginning to take shape and in a couple of weeks we will have a champion crowned 👑.

The first game of the NBA Finals is next Thursday, June 6th.

NHL Playoffs 🏒

Unlike its NBA counterpart, the NHL conference finals have been a seesaw. Both series’ - the Stars vs. Oilers and the Rangers vs. Panthers - have traded wins for the past week, leading up to what could be the biggest weekend of hockey we’ve seen this decade.

Upcoming Games 📅

Stars vs. Oilers - Game 5
Today - 5:30 PM PST

Rangers vs. Panthers - Game 6
Saturday June 1 - 5:00 PM PST

Stars vs. Oilers - Game 6
Sunday June 2 - 5:00 PM PST