NEW YORK — New York Knicks owner James Dolan lodged a number of protest votes on NBA measures over the last year, and among other matters, he took issue with the NBA’s new media rights deal, arguing that the league has devalued and deemphasized local media deals.
The Knicks, who have their games broadcast on MSG Networks — both owned and run by Dolan — would likely be one of the teams hurt most in this regard by the new media deal, which is set to expand the number of games exclusive to national broadcasts from 12 to 15.
Dolan, in a letter sent to the league ahead of its board of governors meeting in July and obtained by The Athletic, wrote the new media deal, worth roughly $75 billion over 11 years, “threatens to completely eliminate RSNs without a comparable replacement offered by the league and no articulated plans to address the production and distribution vacuum that the league will inevitably create in its quest to further disrupt the RSN industry.”
Commissioner Adam Silver said the NBA’s board of governors discussed that issue at length Tuesday during its latest meeting.
Silver conceded the new media deal will have an impact on local media deals, but he defended the new media rights deal and how it would lift the league altogether during a rocky time for the local RSN industry and NBA teams. Diamond Sports promised the NBA last month that it would operate through the upcoming 2024-25 season and broadcast the games of the 13 teams it has contracts with, though Silver admitted Tuesday those teams took “significantly lower fees” this season as a result to ensure that.
But Diamond Sports also ended agreements with the New Orleans Pelicans and Dallas Mavericks, who moved to over-the-air channels and a streaming component.
“On the other hand, prior to us completing our national deals, I think 18 of our RSNs were either defunct or in bankruptcy,” Silver said. “So if you look back, sort of just graph it over the last few years in terms of both decline in number of homes covered by those RSNs and decline in revenue, that is the reality in that aspect of our business, and it’s something we’re paying a lot of attention to.”
Silver said the NBA will spend the next six months looking at the local broadcast situation for its teams, and he expressed confidence it would find an answer that left the NBA in a better place than it stands now.
“I think we will emerge in a very good place,” Silver said. “I think we have a bit of a rocky transition.”
He added, “I think we’ve got this dip. It’s just factual; it’s where we are. But I think coming out of it, what you’ll see is that just in the same way these new media deals we entered into demonstrated the enormous interest in NBA and WNBA programming on a national and global basis, there’s no reason that shouldn’t translate on a local basis.”
FIBA secretary general Andreas Zagklis addressed the NBA’s board of governors Tuesday as the league continued to consider its possible options in European basketball. Silver said last month that the NBA is weighing whether to try to start up a league or tournament across the continent but is unsure of the details or timing yet.
“There is no specific plan right now about Europe other than we’re agreeing to look intensively at the opportunity,” Silver said Tuesday.
The NBA, according to a league source, is considering a number of possibilities. One would include a league that includes current European basketball teams, and could include possible investment from the Gulf states. The NBA has been working with a financial firm, The Raine Group, to take stock of its opportunities.
The NBA could take advantage of what European basketball executives told The Athletic last month is a period of uncertainty in basketball on the continent. There has been discontent among even some top European teams about a lackluster financial situation.
“No one was waiting for the NBA to come in but at this point, there’s a certain need to structure the markets and the competitions in a certain way,” a EuroLeague team president told The Athletic. “There is one brand that has proven they can do that.”
Silver said Tuesday that one thing the league must figure out is how to come into that region in a way that is not hostile to the existing infrastructure. It has been working with FIBA to learn more about that area and would involve it in the possible new league.
“Where we are in terms of the level of interest in basketball is not commensurate with the level of commercial activities,” Silver said. He added: “The way all of us see it, it’s not just about a basketball opportunity. We’ve been in this position in our league before where if you can’t demonstrate to the market that you can’t run a successful business it’s not sustainable.”
Silver said the NBA has not yet created a committee to examine expansion and there was not much talk of it at the BOG meeting Tuesday. The league, he said, is not yet ready to decide if it will expand, let alone which markets. He believes that process will be addressed later this season.
“It get a bit complicated in terms of selling equity in the league,” he cautioned. “What that means for the existing television relationships, etc. What we’ve told interested parties is, ‘Thank you for your interest, we’ll be back to you.’”
Silver had no updates on the Minnesota Timberwolves sale and arbitration process or the Boston Celtics sale. With the Timberwolves, Silver said their dispute resolution “exists independent of the league.”
Celtics controlling owner Wyc Grousbeck outlined a sale process for the franchise that would include a step transaction that would sell the franchise in parts and allow him to retain control of the franchise for years before the new ownership group takes over. Silver had signaled his aversion to step transactions once the league got done with the Timberwolves dispute.
“In terms of the composition of ownership and any potential step transaction, what we’ve said to them present to us what you’re considering and we’ll look at it on a unique basis,” Silver said. “I think every one of these situations presents itself differently. It remains the case of what I said philosophically about step transactions but the devil’s in the details there.”
The NBA board of governors approved the use of instant replay in reviewing out-of-bounds violations this season. If a coach’s challenge leads to a review of an out-of-bounds violation, referees and the league’s replay center will now be able to decide if a foul “proximate to the violation should have been called,” according to the NBA.
(Photo: Roy Rochlin / Getty Images for Fanatics)
