NBA rights deal a slam dunk for the league: BofA

With the NBA announcing on June 24 that it has struck a lucrative new media rights deal, splitting the national broadcast into three packages and securing a total value of approximately $76 billion over 11 seasons, analysts at Bank of America believe it represents a “slam dunk for the league.”

The deal represents more than a 2.5x increase compared to the current package, according to analysts at Bank of America.

The agreement awards the A package to Walt Disney (NYSE:), the B package to NBCUniversal, and the C package to Amazon (NASDAQ:).

Disney’s A package, reportedly valued at an average annual value (AAV) of $2.6 billion, is a significant increase from the previous $1.5 billion. NBCU’s B package, valued at $2.5 billion AAV, replaces Warner Bros. Discovery’s (NASDAQ:) current $1.2 billion AAV package, while Amazon’s C package is reportedly worth $1.8 billion AAV.

The bank notes that WBD, the previous holder of the B package, has been excluded from the new deal but has exercised its matching rights from the previous contract. However, the NBA rejected WBD’s matching offer, leading WBD to sue the NBA over the decision.

However, analysts believe that for Comcast (NASDAQ:), this deal is seen as a path to profitability.

The new NBA programming is expected to drive higher retransmission fees for NBC, bolster Peacock’s subscriber base, reduce churn, and enhance the company’s position in the sports and advertising markets.

Additionally, BofA notes the deal is projected to drive Comcast broadband usage and deliver a mid to high teens return on investment.

Meanwhile, the bank says the impact of losing NBA rights on WBD is considerable. “The prospect of losing NBA content only amplifies uncertainty regarding the future of their traditional affiliate/advertising business,” wrote analysts at the bank.

They explain that the loss could potentially result in a revenue impact approaching $2.25 billion and an estimated EBITDA impact of nearly $700 million over time.

Disney, by retaining the top broadcast package, secures exclusive rights to the NBA finals, which BofA says reinforces ESPN’s leadership in sports media.

However, with significant increases in costs for NFL, CFP, and NBA rights, Disney is expected to be more selective in future rights deals to manage financial impacts.

Overall, this new rights deal is seen as a significant win for the NBA, ensuring substantial revenue growth and enhanced media presence across multiple platforms.