This article is almost a year old, but it details how ESPN and TNT, and by extension the NBA, are thundering towards the edge of the cliff and not taking their foot off the gas.
http://www.outkickthecoverage.com/th...ainable-070616
So how many of those ten million NBA fans would pay for the NBA if it wasn't already a part of their cable bills? Let's be generous and say it's two million diehard fans, the same number paying for the NFL Sunday Ticket.
That would mean that the NBA's television package on the open market offered direct to fans would garner $540 million a year.
That's a deficit of over $2 billion dollars.
So if the market would only support a payment of $540 million and the market is actually paying nearly $2.7 billion, that's the very definition of a bubble. (The reason ESPN and TNT are paying this much of a premium is two fold: 1. their market is artifically propped up by subscribers who never watch their network and 2. the bubble only stays afloat if you can justify your monthly subscriber fees. Which means, you guessed it, you have to overspend.)
That would mean that the NBA's television package on the open market offered direct to fans would garner $540 million a year.
That's a deficit of over $2 billion dollars.
So if the market would only support a payment of $540 million and the market is actually paying nearly $2.7 billion, that's the very definition of a bubble. (The reason ESPN and TNT are paying this much of a premium is two fold: 1. their market is artifically propped up by subscribers who never watch their network and 2. the bubble only stays afloat if you can justify your monthly subscriber fees. Which means, you guessed it, you have to overspend.)
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