NBC and Amazon Enter NBA Media Rights Market

The new NBA season began with significant shifts in the league's media landscape, as NBC and Amazon Prime Video replaced Warner Bros. Discovery's TNT as major broadcast partners. NBC's return marks the network's first involvement with the NBA since 2002, when it last aired games before Turner and ESPN took over. 

NBC Sports is paying approximately $2.45 billion per year for an 11-year package. This will cover 100 regular-season games, including a mix of exclusive Peacock broadcasts and live coverage on NBC, as well as the All-Star Game and select playoff rounds. 

Amazon is investing around $1.8 billion annually for rights to 67 regular-season contests, six play-in games, and a third of the early playoff rounds. According to CNBC, sports betting revenue streams are an option that streaming companies like Netflix, which rely on subscription revenues, may pursue. 

The Wall Street Journal also reported that NBC may face early operating losses between $500 million and $1.4 billion annually during the initial years of the agreement. However, analysts note that the long-term outlook could improve through advertising and subscription growth. 

NBC reportedly earns an average of $130,000 per 30-second ad spot during NBA broadcasts, significantly above TNT's former average of $50,000. This is due to NBC's broader reach through free-to-air broadcasting and cable bundles, which reach roughly 65 million homes. 

Sports betting could be another way to streamline revenue. With NBCUniversal partnering with sportsbook operator DraftKings earlier this month, and Amazon with FanDuel, both platforms aim to boost revenues by catering more to bettors. 

ESPN BET faces an uncertain future

While NBC and Amazon look to enter the betting market, other brands like ESPN BET, PENN Entertainment’s partnership with Disney’s ESPN, are lagging behind other betting operators. 

According to Stifel analyst Jeffrey Stantial, state-level data shows the platform's betting handle declined quarter over quarter from July through September, with only modest recovery at the start of the football season. App download share also fell year over year through the summer, suggesting challenges with both retention and new user acquisition.

Stantial kept his "hold" recommendation on PENN stock and set a price target of $19. He said that PENN is a good land-based operator, but the digital agreement with ESPN might not bring in long-term profits. 

He added that the firms have a mutual opt-out clause that goes into effect in late 2026. This means that ESPN Bet could cease operations if things continue as they are. 

PENN CEO Jay Snowden previously acknowledged that the company's online sportsbook has not met market share goals since its 2023 launch. Analysts now view the termination of the ESPN licensing deal and the potential divestment of theScore as the most likely strategic outcome when Penn reports its third-quarter results in November.