NBA Media Rights Negotiations Wrapping Up, Where’s Apple?, NBA and Apple Immersive Video
Today's update will have an NBA / Apple theme. We begin with a close look at how the NBA media rights negotiations are trending (via the WSJ). The discussion goes over who are likely to be the big winners. We then turn to Apple and look at where the company is relative to NBA media rights. The update concludes with some ways the NBA can embrace Apple Immersive Video.
Hello everyone.
Some quick follow-up to yesterday’s discussion.
We talked about how publishers are receiving attractive monetization terms from Apple News and Apple News+. As for some of the details, if a publisher participates in the News Partner Program, they receive a 15% commission rate on in-app purchase subscriptions through their iOS app. This includes monthly subscription signups. That is not a bad commission rate, especially considering how other platforms for writers, like Substack, charge 10%. For Apple News ads monetization, publishers keep 100% of ads that they sell and 70% of ads that Apple sells. Again, not bad.
Today's update will have an NBA / Apple theme.
NBA Media Rights Negotiations Wrapping Up
Here’s the WSJ:
“The National Basketball Association entered its first TV negotiations in a decade with a problem: Its main business partners seemed to be on shaky footing.
TNT parent Warner Bros. Discovery was saddled with more than $40 billion in debt, while ESPN parent Disney was battling a Wall Street activist over its slumping stock. Each company was reluctant to pony up the full premium the league wanted. But the NBA had quietly laid the groundwork with two other potential partners, Amazon and NBC, who pounced as soon as they got the chance.
Now, with negotiations ongoing as the Boston Celtics and Dallas Mavericks prepare to face off in the NBA Finals, the league is on track to score big: It is closing in on deals with NBC, ESPN and Amazon that would bring in about $76 billion in media revenue over 11 years, people familiar with the discussions said.
The NBA sweepstakes has turned into a defining moment for the TV industry, highlighting the anxieties of traditional media companies about the collapse of cable and their uncertain financial futures in the streaming world. It has put front-and-center the paradox that sports content is outrageously expensive but also critical to own in an industry in which it is one of the few reliable ways to draw in audiences.”
Here are the NBA media rights details that the WSJ is hearing:
Disney: $2.6B/year for games (fewer than it currently airs) and the NBA Finals. The new ESPN streaming service that will launch will be able to air games.
Comcast (NBCUniversal): $2.5B/year for 100 games per season (half will air exclusively on Peacock). The NBC games
An Above Avalon membership is required to continue reading this update. Members can read the full update here. (Members: Daily Updates are accessible via the archive. If you haven’t logged into the archive before, fill out this form to receive an invite.)
Choose either a monthly or annual membership. Payment is hosted by MoonClerk and secured by Stripe. Apple Pay and other mobile payment options are accepted. After signup, use this link to update your payment information and membership status at any time. Contact me with any questions.
Contact me directly if you would like to purchase multiple subscriptions (five or more) for your team or company.
An audio version of the newsletter is available to members who have the podcast add-on attached to their membership. More information about the podcast add-on is found here. Special Inside Orchard bundle pricing is available for Above Avalon members. Additional membership customization is available via the Financial Models add-ons.
Disney Reveals ESPN Profitability, Revisiting ESPN’s Valuation, NBA Looking For Streaming Partners
Hello everyone.
Tech earnings season has begun. The game plan is to begin going over the most interesting reports related to Apple next week. For today, we will go into the sports world as Disney broke out ESPN’s financials for the first time. This will then bring us to reporting that pegs the NBA as wanting to partner with tech companies for its upcoming media-rights auction. Let’s jump in.
Disney Reveals ESPN Profitability
“Profits from Disney’s sports segment, home to ESPN, declined 20% in the first nine months of its fiscal year, according to a new filing Wednesday that offers a clearer look at the toll cord-cutting is taking on the business.
Operating income for the newly reported sports segment fell to $1.48 billion in the nine months ended July 1, while revenue declined 1.3% to $13.2 billion. The unit includes ESPN and related channels, Disney’s ESPN+ streaming service and Star-branded sports channels in India.
Profits from ESPN-branded TV networks, ESPN programming on the ABC network and ESPN+ fell 7.8% to $2.06 billion in those nine months. The company shared more-detailed financial results for the business as it seeks a potential strategic partner to help shape the future of ESPN’s content and distribution.”
One reason Disney is making this financial disclosure change is to separate struggling businesses, such as linear networks, from what Disney views as its growth engines. It’s along the same general idea of Alphabet separating Other Bets losses from Google proper. The change in disclosure will also streamline Disney’s talks with potential suitors and partners regarding asset sales and divestures.
Within the new Disney Sports segment, the company includes various sports-related businesses and segments into one.
An Above Avalon membership is required to continue reading this update. Members can read the full update here. An audio version of this update is available to members who have the podcast add-on attached to their membership. More information about the podcast add-on is found here.
(Members: Daily Updates are always accessible by logging into Slack. If you haven’t logged into Slack before, fill out this form to receive an invite.)
Above Avalon Membership
Payment is processed and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special Inside Orchard bundle pricing is available for Above Avalon members.
More information about Above Avalon membership, including the full list of benefits and privileges, is available here.