The NBA and its media partners ESPN/ABC and Turner Sports announced new agreements today that will extend the relationships through the 2024-25 season.
There are a lot of questions the new deals have created; here is an attempt to answer some of the more pressing ones.
#1 – How Much?
The new ESPN/ABC deal is said to be worth $1.4 billion per year, up from an estimated $485 million under the current deal. Turner Sports will pay $1.2 billion per year, up from $445 million per year under the current deal. The total package is said to be worth $24.4 billion over the life of the deal.
The new nine-year pact will kick in for the 2016-17 season and gives both partners access to more games, more content and several new distribution options, namely a new online service powered by ESPN that will allow streaming of NBA games without a cable subscription in a more Netflix-type experience for users.
#2 – How Will This Impact The Salary Cap?
This season, it will not.
It is unlikely that the new deal impacts next season’s cap, although there has been some talk of “smoothing” the transition from the current value to what’s expected to be a massively bigger value in July of 2016.
The NBA’s Board of Governors is expected to meet on this new agreement and discuss how it impacts not only the salary system, but revenue sharing agreements that were reached as part of the 2011 Collective Bargaining Agreement settlement.
There is a chance, although a remote one, that the NBA as part of this deal gets more money from its TV partners next year, which would allow for a larger than expected July 2015 cap number.
Current projections for 2015 have the cap hitting somewhere in the $66 million range, which would be an increase from this season’s $63.065 million level.
Initial projections for July of 2016 could have the salary cap starting north of $80 million, depending how the new TV money is paid out. It’s possible that the deal could go even higher if the deal is paid out in somewhat equal installments.
#3 – What Will Happen To Older Contracts?
There has been some speculation that older contracts could see some benefit from this new deal, however unless a deal is tied to a percentage of the cap, older “legacy” contracts will not be affected by this deal.
The lone deal without a locked in value belongs to Kyrie Irving, who will receive a maximum percentage of the salary cap based on next year’s cap. It’s possible that players who are negotiating extensions now could get max extensions – such as Klay Thompson and Kawhi Leonard.
A max extension’s value gets locked in during its first year, so it is possible if the 2015 salary cap is increased more than expected, players could see a bump, but that is still a big unknown and considered unlikely.
The players drafted in 2012 negotiating rookie scale contract extensions next year could see a massive increase due to what’s expected to be a massively bigger salary cap in 2016.
#4 – Does This Mean There Will be A Lockout In 2017?
These deals combined with improvements all around the business of basketball make it more likely than not that the Players exercise their option to exit the current labor deal.
That, in and of itself, doesn’t mean there will be a lockout, it does however mean the Players and the Owner are likely headed towards a new labor fight in July of 2017.
Given how radical the financial swing has been under the current deal, there may be “room” for compromise.
With all labor talks, it’s hard to say where each side will really be in 2017, but given the enormity of the dollar figures it’s unlikely that operation under the current agreement continues. Whether both sides can reach a new deal before games are lost remains to be seen.
#5 – How Will This Change Free Agency?
In the short term, not significantly. In the long term, we are looking at a world where the NBA salary cap could get to $90 million quickly and a maximum contract value of $30 million per season, under the current system.
As a percentage of total salary cap some of the older contracts will become far more economical.
What we currently consider normal will change. Take Suns guard Eric Bledsoe, who signed for roughly $14 million a season. Today that number represents 22 percent of the salary cap. In 2016, that same $14 million equals 17.5 percent of an $80 million cap.
Said another way, if Bledsoe is worth 22 percent of the cap, his 2016 value against an $80 million salary cap is $17.6 million per year.
The most significant change will be that unless unchecked, almost every team in the NBA will have ample cap space in July of 2016. Some teams could have as much as $60 million in cap flexibility and even teams with currently ugly cap situations could not only see cap space, but they could see ample cap space.
Another key factor to this is the luxury tax, and that too could increase massively to a level well over $100 million against an $80 million salary cap, meaning we could see numerous NBA teams carrying payrolls near what could be a new $100-plus million tax line.
#6 – Does This Mean Kevin Durant Is Leaving Oklahoma City?
No. What it does mean is that the free agent class of 2016 is highly unlikely to even consider a contract extension and they could all be part of the biggest free agent spending spree the sport has ever seen.
For Durant specifically, it means as many as 15 teams could have the kind of cap space it would take to sign him, with Oklahoma City still having the ability to offer him the most guaranteed money.
A huge jump in the cap means there will be more suitors possible, and those suitors could have room to add more than just one maximum level player.
A rise in the cap doesn’t mean anything specific to Durant, except that more money available means more possibilities to tempt him away.
#7 – How Will This Impact The Sale Of Teams?
The value of this new rights package has been factored into the last few transactions. So this was a key reason the Los Angeles Clippers commanded the valuation they commanded last summer when they fetched $2 billion from Steve Ballmer. It’s also the reason the Milwaukee Bucks sold for $550 million.
The Atlanta Hawks are currently on the market and industry insiders say they could command north of $750 million with a potential $1 billion sale valuation possible if the entire franchise is ultimately sold.
The fact that this deal is done, and the NBA is said to be weighing increasing how much debt it will allow its teams to carry, means valuations of future franchise sales could see a bump not just because of the new rights package, but because of the things this guaranteed revenue will allow in other areas of the business.
#8 – Can Anyone Else Enter The Deal?
The NBA did have conversations with other media companies. There was talk that FoxSports1 was a possible partner, however there were reports that ESPN upped their offer to keep other partners out of equations.
There was also talk that one of the major digital companies like Google were interested in digital streaming rights, but those were accounted in the ESPN deal and those should be part of a new Netflix-type non-cable sports offering powered by ESPN.
The current agreements between ESPN/ABC and Turner Sports accounts for all of the rights currently available or part of future expansion plans, so these deal effectively shut out anyone else other than local TV and radio partners.
#9 – Could The NBA Have Gotten More Hitting The Open Market?
Potentially. There was some discussion about the timing of all of this. The NBA’s feeling was that the market environment was right for a new deal and struck one while ratings were still very strong and the game was at an all-time high in terms of popularity among its 30 member teams.
There are some who believe if the NBA’s rights had hit the open bidding stage, they could have commanded more. But the NBA and, more importantly, its owners wanted to capitalize on the surge in rights fees networks have been shelling out and they understood that as quickly as things change, networks might shift away from these kind of deals down the road so this really was a case of seeing a very good financial deal and taking it.
#10 – Where Does This Deal Put The NBA Among Major US Sports?
According to ESPN’s Darren Rovell, the average annual payments to the NFL for its national TV deals are $6.45 billion per year. The NBA’s new TV package puts it in second place with a combined average annual payout of $2.6 billion per year. Major League Baseball is bringing in $1.5 billion per year in its national TV rights package, while the NHL comes in significantly lower at $200 million per year for its national US TV rights.
There will obviously be more details on this new agreement over the coming weeks, and we will try to update this information or post follow-ups as it’s materially necessary.
NBA Daily: Checking In With Terrance Ferguson
Oklahoma City Thunder rookie Terrance Ferguson talks to Basketball Insiders about learning from his teammates, earning minutes and being mentally tough.
Before he reached the NBA, the Oklahoma City Thunder’s Terrance Ferguson was once often referred to as a man of mystery. After changing course on two different programs in a two-month span, Ferguson ditched the typical one-and-done collegiate season for an adventure on the other side of the planet. But even after the Thunder selected Ferguson with the No. 21 overall pick in last year’s draft — the questions still lingered. How would a teenager with one season overseas adjust to the world’s most physical basketball league?
Not many rookies can contribute to a 40-plus win squad out in the cutthroat Western Conference so quickly — but down the stretch, here Ferguson is doing just that. With the Thunder locked in a tight playoff battle with six others teams, the 19-year-old’s hard-working personality has fit alongside the roster’s three perennial All-Stars — Russell Westbrook, Paul George and Carmelo Anthony. And although his rookie season has come with some growing pains, Ferguson is earning meaningful minutes and making the most of them.
“I think it’s my work ethic, I come in every day with the same mentality,” Ferguson said. “I work my butt off — inside the game, being physical. Even though I’m a skinny guy, as everyone can see, I’m still everywhere on the floor being physical. I think [the coaching staff] really likes that, especially on the defensive end.”
Skinny or not, Ferguson is one of the league’s youngest players, so the 6-foot-7 guard has plenty of room to grow — literally. But for now, he’s playing an integral role on an Oklahoma City team looking to protect its high postseason seed. Late January brought the unfortunate season-ending injury to Andre Roberson — an All-Defensive Second Team honoree in 2016-17 — so the Thunder have needed both new and old players to step up in bigger roles.
While those candidates included the three-point shooting Alex Abrines, veteran Raymond Felton and the newly-acquired Corey Brewer, Ferguson’s recent rise in the rotation has arguably been the most interesting development. Since the calendar flipped to January, Ferguson has featured in almost all of the Thunder’s games, tallying just two DNP-CDs and one missed contest following a concussion. This steady diet of opportunity comes as a stark contrast to the 15 games in which he received no playing time, spanning from the season’s opening tip to the new year.
Of course, playing time is not always indicative of success, but Ferguson himself isn’t surprised that he’s carved out a crucial role ahead of the playoffs.
“Not really, it’s all up to coach’s decision,” Ferguson told Basketball Insiders. “I’m just here playing my part, staying ready at all times and some minutes came, so I’mma take them and play to the best of my ability.”
Back in October, Basketball Insiders’ own Joel Brigham spoke to Ferguson about his unconventional path to NBA and the choice to spend a year grinding with the Adelaide 36ers, an Australian outfit. In the land down under, Ferguson averaged just 15 minutes a night, considerably less than he would’ve likely received as a highly-recruited prospect here in America. Some five months later, Ferguson’s early-season stance on the move still stands out.
“I’m living the dream now, right? I must have done the right thing,” Ferguson said.
Today, it’s hard to disagree with Ferguson’s decisions considering that they’re currently paying off. In 2009, Brandon Jennings became the first to skip college and play in Europe before being drafted, with Emmanuel Mudiay most notably following in his footsteps six years later. While those two point guards both were selected in the top ten of their draft classes — at No. 10 and No. 7, respectively — it still remains the road far less traveled.
Considered raw by most pre-draft evaluations, an early expectation was that Ferguson would spend much of the season with the Oklahoma City Blue, the Thunder’s G-League affiliate. Instead, Ferguson has played in only three games with the Blue, where he has averaged a commendable 14.7 points, four rebounds and 1.3 steals per game.
But as of late, the Thunder have found somebody that’ll always work hard, learn from others and do the little things that don’t show up in the box score.
“I’ve learned a lot more from when I first started,” Ferguson told Basketball Insiders. “I got great teammates — I got Nick Collison, I got Russ, PG, Melo, so just picking their brains. I got Corey now, so just the work ethic they put in, just picking their brains each and every day about what I can do better, watching game film, it’s a lot of things.”
When he was drafted, Ferguson had a reputation as a skyscraping leaper with the athleticism to become an elite perimeter defender. Although his current averages with the Thunder understate his innate potential, Ferguson knows he can contribute without scoring — even noting that he can make up for it “on the other side of the court.” Playing defense and competing hard every night, he has slowly made a name for himself.
And while Ferguson has tallied far more single-digit scoring outings than his 24-point breakout performance in early January, he’s earned the trust of head coach Billy Donovan and his veteran teammates, which is something the rookie will never take for granted.
“Coach believes in me and that means a lot to me,” Ferguson said. “But my teammates believe in me, so I’m not gonna let them down. I’m gonna go out every day and play my hardest, compete and try to get the win each and every night.”
One might assume that his year abroad in Australia helped to mentally mold him into the high-flying, hard-nosed rookie we see today. Ferguson, however, contends that he’s had that edge from the very beginning.
“I’ve been mentally tough, it wasn’t overseas that did that,” Ferguson told Basketball Insiders. “I had to be mentally tough just to go over there — so I’ve always had that mentality, the [desire] to just dominate, play to the best of my ability and compete.”
And now he’s doing just that in the NBA.
Is Kyrie Irving’s Second Opinion a Cause for Concern?
Shane Rhodes breaks down the tough situation the Celtics are in with Kyrie Irving.
The Boston Celtics are in one awful predicament.
With a third of the roster out due to injury, Brad Stevens has been forced into the impossible task of maintaining Boston’s championship aspirations with some subpar talent; while they have performed admirably, the likes of Abdel Nader and Semi Ojeleye wouldn’t see the same run they are currently on with most contenders. Gordon Hayward has missed the entire season, save a few minutes on opening night. Kyrie Irving, Jaylen Brown, Marcus Smart and Daniel Theis are all currently out, some for the year and others not. Key contributors Al Horford, Marcus Morris and others have missed time as well.
It couldn’t get worse, could it?
Well, it may just have. Reports surfaced Tuesday that Irving, who had missed time this season — including the last four games — with left knee soreness, is seeking a second opinion after a lack of progress in his recovery.
My understanding is that Kyrie Irving is getting a 2nd opinion on his left knee, perhaps as soon as tomorrow. Bottom line: he needs the screws out. Knee is flaring up. He will either play thru it going forward or … he will get thee screws out and won’t play at all. Stay tuned.
— Tony Massarotti (@TonyMassarotti) March 20, 2018
With lack of progress on his ailing left knee, Celtics All-Star Kyrie Irving plans to travel for a second opinion later this week, league sources tell Yahoo.
— Shams Charania (@ShamsCharania) March 20, 2018
In the wake of the Isaiah Thomas fiasco and his ailing hip last Summer, an injury that lingered deep into this season, the Celtics will likely be more than cautious with Irving, whom they gave up a haul (the rights to the 2018 Brooklyn Nets first round pick, most notably), to acquire. But one can only wonder if these persistent issues — Irving’s left knee was surgically repaired after he sustained a fractured kneecap in 2015, and he reportedly threatened the Cleveland Cavaliers with surgery this offseason before his trade to Boston — are a cause for concern for general manager Danny Ainge and the Celtics.
The situation presents the Celtics with a quandary, to say the least.
Knee injuries aren’t exactly a death-knell, but fans need not look far for to see the devastating effect they can have on NBA players (e.g. Derrick Rose). They can snowball and, over time, even the best players will break down. Regardless of the severity, Irving’s knee issue presents problems both now and in the future.
The problems now are obvious: the Celtics, already down Gordon Hayward, cannot afford to lose Irving if they are at all interested in making a Finals run this season. Boston struggles mightily on the offensive end when Irving and his 24.4 points, 3.8 rebounds and 5.1 assists aren’t on the court. In a playoff atmosphere, especially, the team would sorely miss his scoring prowess.
Looking ahead, if Irving is dealing with these problems at the age of 25, what could the future hold for the All-Star guard? Knee issues, most lower body issues in general, are often of the chronic variety, and constant maintenance can wear on people, both mentally and physically.
Just a season separated from a likely super-max payday, will the Celtics want to commit big-money long-term to potentially damaged goods?
If there is a silver lining in it all, it is the fact that 20-year-old rookie Jayson Tatum must now shoulder the scoring load, something that should go a long way in building on the potential that made him the No. 3 overall pick last June. And, should Irving miss the remainder of this season, exposure to the fires of the playoffs should only temper the Celtics’ young roster. In the event that Irving’s absence isn’t prolonged, time like this could only serve to strengthen the roster around him.
Still, Ainge brought Irving to Boston for a reason: he was meant to lead the Celtics into battle, alongside Gordon Hayward and Al Horford, in their quest for a title. Obviously, he can’t do that from the bench. Without Irving at 100 percent, the Celtics are not a championship caliber squad, healthy Gordon Hayward or not. That fact alone will make Irving’s situation one to monitor going forward and for the foreseeable future.
NBA Daily: Houston Has It All
Deciphering whether Houston is a contender or pretender is tough, but they’re making it easy.
It is very easy to get caught up in the NBA regular-season hyperbole. The past is littered with a plethora of NBA teams that looked like world-beaters in the regular season only to pull up lame in the playoffs and emerge as a bunch of pretenders.
So when it comes to the Houston Rockets, it’s no surprise many pundits and fans of the game fall heavily on one side or the other. The 2017-18 Rockets are a polarizing squad in that respect. On one side of the fence, you have the folks that are struggling to get behind Houston until they see how the franchise performs in the playoffs under the brightest of lights and on the biggest of stages. On the other, folks that place a great deal of weight on the 82-game regular season and the ability to sustain consistency throughout the marathon.
As always, the truth is somewhere in the middle.
At the top of Houston’s lineup are two future Hall of Famers in James Harden and Chris Paul. The latter was a perennial star in his heyday and is still a top-tier talent in the league. Harden, on the other hand, is closing in on his first MVP award and had serious cases for winning the honors in prior seasons, as well. Both Harden and Paul are criticized for their past playoff failures.
Paul entered the league during the 2006 season and has been dogged by the ever looming fact that he’s never reached a Conference Finals. Harden has been to the NBA Finals but has been dogged for multiple playoff missteps and shaky performances that remain etched in everyone’s memory. But something about this season’s Rockets team (57-14) seems different as the duo closes in on 60 wins.
One way to measure the true greatness of a NBA team is evaluating how many ways the roster can win playing a variety of styles. From the eyeball test, Houston checks the boxes in this category. The team sustains leads during blowouts. They have an offense built to erase large deficits quickly. The team possesses the talent to employ an array of versatile lineups to withstand top heat from opposing teams. Head coach Mike D’Antoni has shown the ability to adjust on the fly during certain situations. Houston is seemingly comprised of a bunch of guys that are selfless and ready to sacrifice at this stage of their respective careers.
Time will tell on all of those aforementioned aspects, but the Rockets are built to compete and win now. On paper at least, the team fits the criteria.
Paul has a chance to go down as a top five point guard in NBA history .His court vision is unquestioned and his big men always seem to end up being in the top five of field goal percentage each season (i.e. Tyson Chandler, DeAndre Jordan and now Clint Capela). In years past, the Rockets faltered down the stretch of games because the entire system ran through Harden. But this year’s club has the luxury of taking some of the on-ball expectation away from Harden and by giving the rock to Paul who naturally thrives in this role the squad doesn’t take a step back on the floor.
This is going to be big for Houston which has seen Harden gassed late in playoff games from carrying the entire load.
Small Ball Ready
Presumably standing between the Rockets and an appearance in the NBA Finals are the Golden State Warriors. The Warriors turned the NBA upside down with their free-flowing offense, long range accuracy and the successful ability to push the pace while playing small ball.
At the height of Golden State’s success they employed the “death lineup” which places All-Star forward Draymond Green at center. In different variations this gives the Warriors five guys on the court who can dribble, drive, pass and shoot. Versatility is important and if you look at this year’s Rockets team they have the ability to match the death lineup with their own version. Veteran forward P.J. Tucker would be able to guard Green in this scenario at center or Houston could just rely on the athleticism of Capela.
When it comes to defense, the Rockets will never be confused for the bad boy Detroit Pistons of yesteryear, however, the team has an assortment of individually capable defenders on the roster. Paul has all defensive team honors hanging on his mantle during his time in the league. Small forward Trevor Ariza made his bones in the league by placing an emphasis on defense. Before Capela emerged as a double-digit scorer, he was relied on as a defensive spark off the bench. Luc Mbah a Moute has a reputation and consistent track record of being a very willing defender.
Shooting, Versatility and Experience
All of this success, leads to the variation D’Antoni can put out onto the floor. The versatility to go with a small ball lineup or a lineup heavily skewed toward defenders is a luxury amenity. Houston also features five guys with 125 or more three-pointers made this season with Harden, Eric Gordon, Ariza, Paul and Ryan Anderson leading the way. A sixth, Tucker, should join the +100 club before season’s end. Veteran Gerald Green has only played 30 games with the franchise but has already knocked down 76 attempts from distance.
Experience is key as well. This year’s Rockets team features only one player under 25, receiving 25 or more minutes per night in the rotation. Look at NBA history, title winning teams are full of veterans not second or third year players.
Again, the Rockets will never be confused with the late 80s or early 90s Pistons but the team has more than a few guys that don’t shy away from contact or physical play. The collection of Nene, Tucker, Green and Ariza have had more than their share of shoving matches when things get heated on the floor.
With the start of the NBA playoffs (April 14) under a month away, the Rockets continue to build momentum toward a title run. Will Harden and Paul’s playoff demons from the past emerge or is their first true shot at greatness with a complete team? These questions will soon be answered.