Media companies play a crucial role in the multibillion dollar sports industry. They help sports clubs and leagues broadcast their events to tens or hundreds of millions of viewers locally and internationally. ESPN is one of the major broadcasters of sports events. The company broadcasts diverse sports events including basketball, football, soccer, baseball, and cricket. It has particularly been a major broadcaster of National Basket Association (NBA) events since the early 2000s. NBA is the top and most popular men’s professional basketball association not only in North America, but also worldwide. In 2014, NBA and ESPN renewed their deal to the tune of $24 billion to broadcast the league’s events up to 2025 (Riccobono, 2014). Focusing on the ESPN-NBA deal, this paper discusses why media companies acquire the rights to broadcast sports events.
Basketball is one of the most popular sports in the U.S., with NBA events attracting 16,000-19,000 attendees on average (Experian Data Quality, 2016). NBA events are also viewed by tens of millions of fans across the country and globally. Statistics indicate that 5% of American adults regard basketball as their favorite sport (The Harris Poll, 2016). The huge popularity and fan base of NBA events explain why media companies constantly fight for broadcasting rights. The current deal between ESPN and NBA is valued at $2.6 billion annually for nine years starting from the 2016-2017 season. By the end of agreement, ESPN will have paid NBA a total of $24 billion, which is the largest deal in the history of the league. With the deal, player salaries are expected to increase, making Lebron James the topmost paid basketball player ever (Riccobono, 2014). More importantly, the deal will significantly boost the exposure of NBA events domestically and internationally.
The deal means even a lot more for ESPN, which has a viewership of more than 90 million households across the U.S. under paid subscription model. The present deal has some aspects that make it more beneficial for ESPN. Unlike under the previous deal where ESPN nationally televised 90 regular season games, ESPN now broadcasts 10 extra games (ESPN, 2016). This certainly implies more revenue for the company. In addition, consumers are now able to stream nationally televised games via the internet and their mobile devices without paying for cable. A win for the consumer means a broader stream of revenue for the company. Even so, with ESPN paying NBA more under the current deal, cable charges are expected to increase in the long-term as cable providers may have to pay more to carry ESPN. This additional cost is ordinarily passed down to the consumer.
ESPN will also make more money under the present deal via franchises. The network is viewed not only in the U.S., but also worldwide. Through franchise agreements, the network is visible in more than 100 countries around the world, including Europe, Latin America, and Asia Pacific. With more coverage of NBA events, coupled with increased access of the network’s programming via digital platforms, ESPN’s competitive advantage in the long run will be boosted. For instance, the company may be better placed to charge more for franchise agreements as the deal is likely to increase revenue potential. This is a particularly important point of consideration as the business of franchising is heavily dependent on a proven business model — a model with immense and established potential for revenue. Due to increased revenue potential, new firms may be interested in acquiring franchise rights, which would ultimately increase ESPN’s exposure across the globe.
More fundamentally, the enormous value of the current deal between ESPN and NBA clearly demonstrates how sports broadcast rights have increasingly become a major issue for media companies. As mentioned earlier, the current deal is valued at $2.6 billion annually, which represents a 180% increase from the previous deal ($930 million per year) (Riccobono, 2014). The phenomenal growth of value means that sports broadcast rights play an instrumental role in the growth of sports television networks. As explained by Schaub (2002), the acquisition of broadcast rights has historically been a key driver of television markets. With the present deal, ESPN is likely to experience more remarkable growth in the next one decade or so. The network will be better placed to attract more paid subscribers as well as franchisees all over the world, which would typically translate to increased financial power. Greater financial strength on the part of a sports broadcast network would enable the network to leverage its position and boost its dominance in the market (Cave & Randall, 2000). It may also open possibilities for acquiring sports teams and leagues to the advantage of the network (Cave & Randall, 2000).
Overall, as demonstrated by the ESPN-NBA deal, the acquisition of broadcasting rights for sports events is a major business for media companies. Media companies are able to grow their viewer base as well as franchisees, which ultimately improve revenue performance. Without major sports events on its programming such as NBA events, ESPN would perhaps not be where it is today. Acquiring broadcasting rights is, therefore, crucial for the growth of media companies.
Riccobono, A. (2014, October 6). NBA TV deal 2014: what the $24 billion new agreement means for the league. International Business Times. Retrieved 15 October 2016 from: http://www.ibtimes.com/nba-tv-deal-2014-what-24-billion-new-agreement-means- league-1699971
Experian Data Quality (2016). North America’s most popular sports. Retrieved 15 October 2016 from: https://www.edq.com/data-quality-infographics/north-america-popular- sports/
The Harris Poll (2016). Pro-football is still America’s favorite sport. Retrieved 15 October 2016 from: http://www.theharrispoll.com/sports/Americas_Fav_Sport_2016.html
ESPN (2016). NBA extends television deals. Retrieved 15 October 2016 from: http://www.espn.com/nba/story/_/id/11652297/nba-extends-television-deals-espn-tnt
Schaub, A. (2002). Sports and competition: broadcasting rights of sports events. Retrieved 15 October 2016 from: http://ec.europa.eu/competition/speeches/text/sp2002_008_en.pdf
Cave, M., & Randall, R. (2000). Sports rights and the broadcast industry. Retrieved 15 October 2016 from: http://dspace.brunel.ac.uk/bitstream/2438/850/1/00-18.pdf
Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?
Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.
Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.
Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.
While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.
Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.
In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.
Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.
We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!
We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.
Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.
We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.
Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.
There is a very low likelihood that you won’t like the paper.
Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.
We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.
You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.
We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.
You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.
Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.
You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.
The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more