NBA New TV Deal And The Cap Ramifications

A new NBA television-rights deal is coming, and according to our calculations, so is an eventual new salary cap for teams possibly nearing $85 mil. The latest:



There was major NBA news Sunday, as the New York Times reported an agreement on a huge new NBA TV rights deal, a deal so big that we can guarantee it will explode the league's salary cap when it hits.

The report made the following points:

1. The NBA has reached agreement on a long-term deal with ESPN and TNT.

2. It will be worth $24 billion over nine seasons, an average of $2.667B per season.

3. The prior deal with these TV outlets averaged $0.93B per season.

4. The new deal begins in the 2016-17 season and runs through the 2024-25 NBA season.

5. This does not include the Finals rights.

6. Look for Adam Silver to announce the new deal(s) in a news conference Monday morning.

From our knowledge of the cap and the way the revenues work, since this is money that begins in 2016-17, this deal shouldn't change the cap for 2015-16 at all. The CBA is a "share as you go" setup and this deal pertains to TV rights that begin in 2016-17. But it's always possible that they might roll the last year of the old deal into the new one, where some of this increased money hits early, thereby smoothing out the looming increase in revenues and cap.

Our prior working estimates, based on this deal increasing these annual rights revenues to $2.1B, had shown an $80M cap in 2016-17. Now, with an actual $2.667B average, that cap jump in 2016-17 could easily go to $85M or more.

We'll have more on this, from a Dallas Mavericks perspective and beyond, throughout the coming days.






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