Despite the soft deadline expiring on April 1, four NBA teams are reportedly set to renew their media rights deals with Main Street Sports Group, the owner of FanDuel Sports Networks. According to a report by Tom Friend in Sports Business Journal, the Atlanta Hawks, Miami Heat, Minnesota Timberwolves, and Milwaukee Bucks are likely to extend their local media rights agreements with FanDuel for the upcoming season, while the Cleveland Cavaliers are less certain. The artificial April 1 deadline has reportedly been “pushed into this summer or beyond,” giving teams more time to assess the local television and streaming landscape before making decisions on renewing current agreements.
The key issue between the parties appears to be the duration of the new agreements. Main Street Sports Group, which emerged from a lengthy bankruptcy proceeding last year, prefers two-year agreements to ensure stability as it attempts to grow as a business. Conversely, the teams would prefer one-year contracts to maintain flexibility for potential participation in a future national streaming service that the NBA is reportedly negotiating with companies like Amazon, YouTube, and Apple. However, reports indicate that such a streaming service is not expected to materialize in the near future, as the league has informed team executives that it is “not immediately imminent” and to “stay patient.”
The decision for the affected franchises to remain with FanDuel comes down to financial considerations. Some NBA teams have chosen to bypass traditional regional sports networks that require cable subscriptions, instead broadcasting games on free over-the-air channels and paid streaming services. According to Sports Business Journal, this strategy has often resulted in generating only half of the local media revenue compared to traditional networks like FanDuel, which may limit their reach but enables teams to keep a larger share of their local media revenue.
Sports Business Journal categorizes the Hawks, Heat, and Timberwolves as “almost certain” to renew their agreements with FanDuel for next season, while the Bucks are considered “likely” to extend their current deal. The situation for the Cavaliers is more uncertain; owner Dan Gilbert launched an over-the-air regional sports network called Rock Entertainment Sports Network last year with plans to air the team’s games there. However, given the current economics of local media rights, which may lead to a significant decrease in rights fees, the Cavaliers “may simply return to FanDuel Sports Network,” according to the report.
The financial boost from the NBA’s new national media rights agreements with ESPN, NBC, and Amazon next season offers a lifeline for franchises struggling with local media revenue. Starting next season, teams are expected to receive $142 million annually, with a 7% increase each year over the 11-year deals. For context, local media agreements for the five teams in renewal discussions with FanDuel range from $24 million to $55 million per year. This influx from national TV deals may lower the stakes for regional negotiations, yet these talks are crucial for regional sports networks as they vie for a position in whatever future streaming solutions leagues like the NBA, MLB, and NHL may develop.
