It was thought that all owners would be delighted with the new $74.6 billion TV contract negotiated by the NBA. An agreement that will further boost franchise revenues and cause player salaries to explode.
But James Dolanthe Knicks boss who has been at open war with Adam Silver and the leaders of the Major League for years, has nevertheless split from an open letter to criticize the agreement!
A leveling for franchises
Why? Because he believes that it levels things out even more for the franchises. James Dolan does not support the redistribution system put in place by the NBA during the last collective agreements, which require franchises in large markets to give a share of their revenues to franchises in small markets, so that no one loses money. As he is one of the first redistributors, the businessman is annoyed.
“The NBA has adopted the NFL model of reducing the importance and power of the local market”writes James Dolan. “Soon, your only concern for revenue will be ticket sales and next year’s jersey color. But don’t worry, because through revenue pooling, you’re guaranteed neither success nor failure. Of course, to do that, the league must break up the successful franchises and redistribute to the less successful. This new media deal goes a long way toward that goal.”
For James Dolan, the arrival of a streaming platform like Amazon is also a very bad signal, with franchises having fewer and fewer matches to reserve for their local broadcasters, making these agreements complicated.
The businessman is also annoyed by the percentage retained by the NBA, which will reach 8% (6 billion dollars) while it was only 0.5% (15 million dollars) in the current agreement…
New York, an exception rather than the rule?
A levy that he judges as such “without sufficient justification… or transparency about how the NBA arrived at this amount, how these costs will be allocated, or the extent to which the league will use this purported increase in revenue to incur additional costs and further increase the league's ever-increasing level of spending…”
To summarize: James Dolan criticizes the NBA for having bet on an overall increase in its revenues, which it can then share with its franchises, while the Knicks boss believes that it is rather individually that the franchises should work, so as not to penalize the clubs which earn more money.
Of course, on the NBA side, one can retort that the “Big Apple” franchise is more of an exception than the rule, with the biggest market in the league and huge revenues ensured by the constant influx of tourists to Madison Square Garden. Furthermore, the agreements with streaming services like Amazon Prime Video or Peacock are above all a way for the NBA to compensate for the collapse of a large part of the regional TV networks, rather than a way to torpedo the few still prosperous markets (New York, Los Angeles, etc.) in the field.
