MW Here's why some NBA teams show their games on TV for free, while others charge fans hundreds of dollars
By Weston Blasi
NBA owners have very different ideas about the benefits of showing their teams' games for free
Watching sports on television has gotten more complicated and more expensive with the advent of streaming. Some fans must sign up for several different services in order to watch all of their favorite team's games.
Some American sports teams have created their own streaming services where fans can pay directly for games. One example is the NBA's New York Knicks, whose MSG+ app last season allowed fans to watch the team's locally televised games for $310 for the season, for $10 a game or for $30 a month. Baseball's New York Yankees also have their own streaming app, the YES Network, where fans can pay $240 annually to watch most of the Bronx Bombers' games.
Those two New York-based streaming services recently launched a separate streaming brand this month called Gotham Sports that bundles the services for $360 a year. It also includes other New York-area teams including the New Jersey Devils, Buffalo Sabers and New York Rangers.
Viewing games on the app will be free for people who subscribe to a cable plan that has the networks, Jon Litner, CEO of YES Network, said in a statement. He added that the app "will provide one convenient digital destination for our programming services and for fans of some of the most iconic teams in all of sports."
But many people who cancel traditional cable - 60% of U.S. households didn't have a cable package in 2023, compared with 20% in 2015 - have no other way to watch their favorite teams play. And even if people sign up for a popular cable substitute like YouTubeTV or SlingTV, they often don't get regional sports networks like MSG $(MSGE)$ and YES.
And the $360 yearly price tag is more expensive than most on-demand streaming services like Netflix $(NFLX)$, Amazon Prime $(AMZN)$ or Disney+ $(DIS)$ - but still roughly half the annual cost of digital cable substitutes like YouTubeTV $(GOOG)$ or FuboTV $(FUBO)$.
One expert still thinks this bundling makes sense for some consumers.
"If you're a fan of multiple teams, it forces you to buy individual apps. The splinter of the sports landscape has reached a tipping point of what I call app fatigue," Dennis Deninger, professor emeritus of sport management at Syracuse University, told MarketWatch.
"You have to compare the pricing to what you were paying for your cable system, and if you're a sports fan and on cable you were just watching the sports offerings, you're spending hundreds of dollars a month to get a lot of channels you're not watching," Deninger said. "The world has changed."
Another NBA team that charges fans to watch its games via an app is the Utah Jazz. On the Jazz+ app, fans can get most games for $125 a year. For $175, they also can also watch the NHL's Utah Hockey Club games.
So why don't more professional sports teams charge fans hundreds of dollars to watch their games?
In reality, very few teams have similar on-demand TV offerings, instead opting for local TV deals with regional sports networks. In these deals, a team sells a certain package of games to appear on local TV stations, such as those affiliated with Fox $(FOX)$, Diamond Sports or Charter $(CHTR)$. These deals can be for tens of millions of dollars, depending on how the networks value the team's games.
See: Want to watch every NFL game this season? It's going to cost you nearly $2,500.
But some teams have taken a different route and opted to give their local TV games away for free.
In the past year, for example, the NBA's Dallas Mavericks and Phoenix Suns announced that they would show their games over the air or on their team app at no charge.
"It expands the reach of their current set of sponsors and advertisers, and it makes advertising with the Suns more attractive," Deninger said. "I can get my ads in these shows, and they are seen by a larger group of people. That's an attractive sell."
In addition to creating a broader reach for its games, showing games free of charge could also be viewed as a long-term plan to help grow a team's fan base by creating a low barrier to watch.
"If you make your games available for free, in the long run, you'll cultivate new fans," Deninger said. "Kids watching in homes where maybe they can't afford $42 a month, those kids can still see sports and they will grow up becoming a fan of those teams, and that's on the profit side of the ledger for those teams ... fans for life."
A team's local games are contests that do not appear on national broadcasts. For example, the Phoenix Suns have 30 nationally televised games for the 2024-25 season - those will be shown on ESPN, ABC, TNT or NBATV - and the rest may be considered locally televised games. National games, meanwhile, aren't available on regional sports networks, even for fans who pay hundreds a year for their team's games.
For the NBA, the local TV revenue that each franchise makes is not public. But any revenue that a team makes is much lower than the league's national TV revenue that it gets from broadcasters including ESPN and TNT Sports (WBD).
This year the NBA agreed to an 11-year, $76 billion broadcast-rights deal that will be split among all 30 NBA teams. The deal starts with the 2025-26 NBA season.
See: Here's when Adam Silver thought Warner Bros. Discovery might lose its NBA broadcast deal
The Suns and Mavericks did not respond to requests for comment for this article, but last season, Suns owner Mat Ishbia said, "We're not focusing on money. We're focusing on winning, success and taking care of fans, taking care of the community. What happens is you always end up making money. It always works out."
About 2.8 million households in Arizona now have access to Suns games, more than triple the reach that the Suns had under the team's 2022 local TV contract with Bally Sports.
Patrick Dumont, the new owner of the Mavericks, said in September that he wanted to "make it as easy for as many Mavs fans to watch Mavs games as possible."
Fans outside of Arizona and Texas can't access these free games, but they can purchase Suns and Mavs games on NBA League Pass.
Read on: The end of the free trial? Why a once-popular marketing tactic is now rarely offered.
-Weston Blasi
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
October 30, 2024 16:07 ET (20:07 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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