Courtesy of EconMatters
We discuss the massive drop in ESPN subscribers this year, and how this relates to those massive NBA Television Broadcasting Deals that were based upon much higher subscriber bases going forward, and how this filters down into larger salary caps for NBA Franchises leading to $20 Million Dollar annual player contracts guaranteed for 5 years.
The math doesn`t add up for this vertically integrated supply chain. Somebody is going to be left holding the bag here and losing a bunch of money over the next decade. These player salaries seem out of whack with the changing dynamics of the skinny bundle, streaming media habits and shrinking subscriber bases.
Many of these television deals may have to be renegotiated on the fly by necessity as the media landscape is changing dramatically underneath the feat of the NBA, Network and Cable television, the Advertising Industry, and NBA Franchises half of which are already losing money under the current NBA structured finance model.
Donatas Motiejunas contract fiasco serves as another example of how in the NBA when it comes to money nobody has a clue what they are doing from a negotiations standpoint. The NBA is one of the poorest run and managed organizations in all of sports, and as we noted before it wouldn`t surprise us if the NBA is bankrupt in 5 to 10 years.
