While we all struggle to digest the enormity of the new NBA broadcast rights deal, extending the current contract between the league and both ESPN and Turner Sports for the mind-altering price of $2.66 billion per year (up 186% from the current $940 million a year deal), there is another highly relevant topic worth discussing amongst the flurry of Johnny Manziel money signs being made around the NBA offices:
The positive impact on sports jobs.
But first, let’s understand the underlying economics of the sports landscape to fully understand why this is happening now, and more importantly, if it is sustainable.
The Value of Sports as a Business Continues to Rise
If you are looking to gain clarity on why sports broadcast rights have grown faster than a teenage Manute Bol, peer towards the black box sitting next to your TV.
In the pre-DVR days choices had to be made by every couch bound stalwart - watch your favorite sitcom or watch your favorite team. The two events were on a level playing field, in direct competition with one another and more often than not people watched Seinfeld instead of the Sonics.
But all that changed with the ability to fast-forward, rewind and record. Now the choice shifted, watch one event live and record the other to watch when you feel like it. Which would you choose?
Enter social media.
Social media made it cool to discuss and comment on events as they happen – none more so than sports. Very few running commentaries exist on an episode of The Big Band Theory, but tune in to Twitter and you can follow, and get involved in, the ongoing reaction to your teams live performance.
As sitcoms and dramas became the fodder for recording and watching later, so did the ability to fast forward through all those high-priced advertisements that used to wage a price war for a 30-second piece of ‘Must See TV’.
In turn, the value of advertising on traditional TV programming diminished.
Now the price war has shifted to live sports, the last space for advertisers to grab a slice of your consciousness and implore you to buy their products. We have proven as a society that we like to watch our sports live, commercials and all, and that is why the PAC-12 network and a host of other team, conference and league run networks have become commonplace.
Why sell your product to another distributor when the value is so high? Instead the choice was made by many to control and broadcast their own product, their own messaging and their own revenue stream. (See: YES Network, NESN, Big Ten Network etc.)
This forced the hand of distributors like ESPN, Turner Sports, NBC Sports Network and Fox Sports to, in theory, overpay to obtain rights. The sports leagues played their card masterfully, placing enough fear in the distributors that they would keep and maintain their own valuable product, and the distributors responded appropriately with, "How does a couple billion sound to you?"
The reason it all works is because the ESPN's and Turner Sports still have something these niche networks don't – wide distribution - which has allowed the bidding war to reach incredible heights. The sports networks compete for rights fees in order to drain every last drop of advertising life blood, and the prices get inflated. For example, NBC outbid Fox for the Olympics by $1 Billion.
Now, don’t cry for ESPN or the other networks – they are smart too, they've done the math with more than just #2 pencils and scratch paper, and are able to conclude there is money to be made even when you pay $2.66 billion per year for a product.
What Does it All Mean for Sports Jobs?
While most media outlets will focus on the jostling set for NBA free agency in 2016 and the huge salary demands of players, we’ll take a different angle and focus on some careers that should see an upswing.
1: Sports Broadcasting - This segment of the sports industry is the clear winner, with ESPN and Turner paying such a hefty fee for broadcast rights, they will need to create an even bigger, hungrier market for their product. Enter more NBA themed magazine style shows, a renewed emphasis on the studio pre- and post-game shows, more jobs in creative services developing promotions – you name it.
“Increased hours of coverage and live game broadcasts stand out, but the big deal is the rights that ESPN/ABC gets to create a digital channel in partnership with the league. But the idea, as [Wizards Owner Ted] Leonsis explains it, is for ESPN and the NBA to be able to sell digital packages to mobile customers worldwide with a large choice of payment systems. Imagine a person in Beijing buying a season's worth of a team's games for his phone, or even just particular highlight packages, or maybe even for just a quarter of live action on the spot after following the game on Twitter. That's all possible, and it's not hard to visualize. Although nothing is for sure, that idea was worth hundreds of millions of dollars to the NBA in this deal.”
For you, the seeker of sports jobs, this will mean more opportunity in the digital landscape to create new products and enhanced online content and delivery.
3: Sports Marketers - With the networks intent on creating more and more recognizable NBA stars, sports marketing agencies will have a huge opportunity to play a role. Look for more national and international campaigns geared towards marketing the NBA experience… last I heard, NBA action was fantastic.
Another realm sports marketers can benefit from is from the individual athletes. Agents will undoubtedly seize the opportunity to leverage their clients increased fame into more marketing and sponsorship deals.
Which brings us to…
4: Sports Agencies - Not every NBA player is represented by either Jay-Z or Arm Tellum, there are countless other agents cruising the landscape looking to sign players. Now, with the pending increase of player salaries there stands to be more opportunity, and more competition.
The best agents will rise to the top, because they will demonstrate an ability to leverage players on-court abilities into opportunities off court. But agents don’t work alone, they have staffs that help with marketing, foundations, financials etc.
As the economic picture changes and money rains down like a Rajon Rondo floater in the lane, expect there to be an increase in staffing at sports agencies.
Of course there are a plethora of other jobs including trainers, nutritionists, scouting at lower levels, retail, manufacturing and more, but the clear fact is - if you build it, in stacks of cold hard cash as the NBA has, the sports jobs will come.
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