ESPN’s New NBA Deal Includes ‘Framework’ for Untethered OTT Video Service

/ Oct 6, 2014

NBA on digital

As part of ESPN’s new multi-platform rights deal with the NBA to air regular-season and playoff games through the 2024-2025 season, the sports giant has also announced plans for an “over-the-top” video service, which will allow people to watch live games online — without needing to be an ESPN TV subscriber.

There are not many details to go by in terms of how the service will work — whether it would come at a subscription, or allow fans to buy individual games, among other questions. Per ESPN and NBA, the two companies have merely “established a framework…to negotiate the launch of a new over-the-top offering.” In this setup, the NBA would retain an equity stake in the video service.

The rest will be announced at some unspecified later date, the partners said.

Still, this is a significant departure for ESPN, which leads the pack in terms of the most expensive channels on television. As the walls of pay-TV start to tumble down, live sports remains the last bastion for those interested in getting people to pay for TV, and then watch TV content on the TV set when it initially airs. By opening up select NBA games to the internet, without requiring that viewers are already paying TV customers of ESPN, the sports network is acknowledging a scenario that non-sports networks like HBO are coming to terms with — eventually, viewers will demand access to content on their terms.

That said, this is not happening in the next few years. ESPN’s deal with the NBA runs through 2025, and is expensive enough (at least double that of the previous contract, under which ESPN paid the NBA $485 million per year, according to The Wall Street Journal) that ESPN has a serious interest in maintaining its pay-TV dominance.

It’s possible to watch live content online. YouTube’s stream of the Red Bull “Space Jump,” in addition to live-streaming of major sports events like the Super Bowl and the Olympics (on an authenticated basis), as well as the success of ESPN’s own WatchESPN app, are proof positive of that. But there’s still too much money available in keeping live sports on TV. ESPN’s deal with the NBA is proof positive of that, too.

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