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The Medium delivers in-depth analyses of the media marketplace’s transformation as creators, tech companies and 10 million emerging advertisers revolutionize the business models for “premium content”.

Each fiscal quarter, The Medium identifies three or four new trends that have momentum and seem poised to play out at a larger scale in 2023. These key trends pinpoint dynamic and constantly evolving developments in the media marketplace that are emerging from incremental shifts or fundamental changes. The bi-weekly mailings analyze these trends as developments emerge in real-time. 

Read the three key trends The Medium will be focused on in Q4 2023. This essay focuses on "In the shift from wholesale to retail models, there are many business models that delight consumers but no single, dominant one."

Last week, Dallas Mavericks owner Mark Cuban betrayed his skeptical view for the future of sports media distribution when he sold a majority share of the team to the Adelson family, owners of the Las Vegas Sands casino empire, for $3.5 billion. It is a short-term cash-out at a near 11X multiple of his original investment ($285 million in 2000), implying that the team may not be as valuable in the future as it is today.

This bearish signal emerges at a time when the NBA is seeking to triple the value of its existing distribution rights deal where Disney—owner of ESPN and ABC, and Warner Bros. Discovery—the parent company of TNT and TBS—are collectively paying the league $24 billion over nine years through 2024. NY Post reporter Andrew Marchand reported that the likely outcome of current negotiations is that the NBA may not double or triple the value of its current rights deal.

As longtime readers of The Medium may recall, I like to quote an interview with Cuban from April 2020 where he lays out a vision of “three, four, five streams of the same game that’s going on traditional TV”. He also described “a unique opportunity to juice up paid-TV subscriptions” and offer gamblers an exclusive feed via TV with little to no time delay (“There’s a delta between a satellite feed and a cable feed and even a good stream”).

Cuban was prescient. Four years later, Amazon Prime Video is offering multiple streams of every Thursday Night Football game, and ESPN has found success in an alternate broadcast of Monday Night Football with the ManningCast (former NFL quarterbacks and brothers Eli Manning and Peyton Manning and guests. But now, Cuban’s sale reasonably implies that neither the Dallas Mavericks nor the rest of the NBA will benefit similarly from those distribution business models in a streaming world. Cuban’s checklist of experiments instead has become a helpful checklist to understand why the NBA's distribution deal will likely disappoint owners.

Key Takeaway

There is unlikely to be long-term upside to taking on short-term risks with streaming and sports betting in any future NBA deal. That presents a scary long-term future for his fellow NBA owners, and perhaps a scarier future for the NBA's existing TV distribution models.

Total words: 1,500

Total time reading: 6 minutes