Amazon Thinks People Will Pay Extra To Watch NBA Games They Don't Watch For Free: Bobby Burack

Amazon appears to be on the verge of agreeing to a 10-year deal with the NBA to stream games exclusively starting in 2025. The Athletic first reported the details last week.

Amazon Prime Video, where the games would stream, is included in the standard Prime package. Around 167.2 million users in the U.S. subscribe to Prime, according to estimates. 

However, Amazon probably isn't pursuing NBA rights to provide current subscribers access to professional basketball. It's more likely trying to secure the NBA rights to increase new sign-ups. 

New sign-ups and the subsequent retention rates are how streaming services calculate the value of a sports package. Both Amazon and Peacock recently confirmed that when touting the value of their respective NFL packages last season.

Notably, Peacock's exclusive airing of the Wild Card matchup between the Chiefs and Dolphins generated around three million new sign-ups in January. Of those new users, 71% were still paying subscribers two months later.

That specific data point started a bidding war for the future rights to the now-annual streaming-only Wild Card game. Ultimately, Amazon edged out Peacock by agreeing to pay $120 million a year.

Whining About Streaming Sports

Americans whine about having to pay extra to stream the NFL. They whined about the Wild Card game on Peacock, but they paid. They also paid for Amazon (Thursday Night Football), and ESPN+ (for an international game).

That's the NFL. The NFL is king. The NBA is not.

LOS ANGELES, CALIFORNIA - OCTOBER 22: A pro-Hong Kong activist holds an image depicting LeBron James as Chinese communist revolutionary Chairman Mao Zedong before the Los Angeles Lakers season opening game against the LA Clippers, outside Staples Center, on October 22, 2019 in Los Angeles, California. Activists also printed at least 10,000 pro-Hong Kong t-shirts to hand out to those attending the game and encouraged them to wear the free shirts as a form of peaceful protest against China amidst Chinese censorship of NBA games.  (Photo by Mario Tama/Getty Images)

ESPN/ABC and TNT allowed their current agreements with the NBA to expire last week. According to the Wall Street Journal, both networks want fewer NBA games and windows moving forward.

There are reasons the two partners want less of the league. The NBA is not as popular as it was 10 years ago, when the partners overpaid to keep the product away from a third and fourth broadcaster.

Then there are these not so inspiring numbers:

• Around 45% fewer people watch the NBA than they did in 2012.
• The NBA is down 80% from the 1990s.
• Four of the five lowest-rated NBA Finals of the past 30 years have occurred in the past four years. (12.4 million viewers in 2022, 9.91 million viewers in 2021, and 7.45 million viewers in 2020.)
• This past NBA regular season posted the lowest-rated season in network TV history.

Try spinning that. 

DENVER, COLORADO - APRIL 21: Stephen Curry #30  of the Golden State Warriors drives against Nikola Jokic #15 of the Denver Nuggets in the fourth quarter during Game Three of the Western Conference First Round NBA Playoffs at Ball Arena on April 21, 2022 in Denver, Colorado. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and/or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement. (Photo by Matthew Stockman/Getty Images)

The NBA regular season has become increasingly meaningless. Star players skip games because they care so little about the outcome of regular-season basketball.

Yet Amazon appears set to invest in regular-season basketball.

Further, the NBA will continue to treat ESPN/ABC and TNT as its top-tier partners. Translation: the league isn't handing Amazon many marquee Lakers, Celtics, and Warriors games. 

The Thursday Night Football-tier, if you will, of the NBA is shabby. Pacers vs. Pistons doesn't exactly scream "I need Amazon Prime!" 

The timing is not ideal, either. 

LeBron James is still the biggest star in the NBA. However, he turns 40 years old next season. Amazon is unlikely to get even four years of LeBron.

"The NBA ratings are down severely," said Colin Cowherd last month. "I think it's because they don't have a face of the league [in place] and I'm not sure they have one on the horizon."

Neither do we.

Nikola Jokic and Giannis Antetokounmpo are stars on the court. But their stardom doesn't transcend past the confines of the basketball-sphere. The sports media hopes Anthony Edwards, a charismatic black player, grows into a mainstream face. 

We will see. He needs to start winning.

So, unless Prime poaches away Game 6s and 7s in the playoffs – which remains to be seen – Amazon will need fans to pay extra for games they haven't been watching for free on television.

Sounds like CNN+. 

"Hey, I know you are not watching CNN for free, but pay us $10 a month for more CNN," the execs thought to themselves before canceling the service a month into its existence.

Far be it for any of us to challenge the brain trust at Amazon, but we are skeptical.