In a letter to his fellow NBA Board of Governors, James Dolan criticized the league’s impending $74.6 billion media rights deal and revenue sharing policies. Dolan indicated that the new media deal renders Regional Sports Networks as “unviable.”
“The NBA has made the move to an NFL model — deemphasizing and depowering the local market,” Dolan wrote in the letter. “Soon, your only revenue concern will be the sale of tickets and what color next year’s jersey will be. Don’t worry, because due to revenue pooling, you are guaranteed to be neither a success nor a failure.
“Of course, to get there, the league must take down the successful franchises and redistribute to the less successful. This new media deal goes a long way to accomplishing that goal.”
Dolan outlined his criticism of what he called the league’s plan to retain “…$6 billion (or 8 percent) of the total-NBA related fees…..” without “sufficient justification … nor transparency into how it arrived at the sum, how these fees will be allocated or to what extent the league will utilize this purported revenue growth to incur new and incremental costs and further expand the league’s ever growing expense level…”
Dolan made a comparison to the league retaining $15 million (0.5 percent) in the league’s current media deal for the 2024-2025 season and expressed a dissatisfaction with an increase of $358 million in 2025-2026 under the league’s proposal, according to the letter.
Dolan cited issues with proposed revenue sharing in the league’s sponsorship and local television packages too, according to the letter. According to Dolan, the league’s “…proposal would also have a negative impact on the value of each member team’s local sponsorships,” including “…the delivery of camera-visible benefits at as few as 23 home games — -roughly 20 percent reduction to what was historically provided.”
Also, Dolan wrote, “team sponsors/partners would no longer be protected” during national broadcasts, which undercuts the premium that member team sponsors can be charged for being the sole third party promoted in a specific sponsorship category.
“…These changes drastically increase the challenges associated with attracting and renewing vital sponsorship revenue by creating a particularly unfriendly environment for member team sponsors.”
In the letter, Dolan concluded: “We trust that our concerns are shared by many of our counterparts across the league, each of whom will be similarly impacted. The league will say that it does not matter because your franchise value will continue to rise; that contemplates you will eventually sell….
“Once again, pride of ownership is what is sacrificed. We are well on our way to becoming a one size fits all, characterless organization. Just remember we did this on the backs of owners like Jerry Buss.”
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July 15, 2024 | 11:30 pm
