New York Knicks owner James Dolan sent a letter to the NBA Board of Governors voicing his criticisms of the league’s revenue-sharing policies as part of the new $74.6B media rights deal, per ESPN’s Adrian Wojnarowski.
In the letter, Dolan, who has criticized the league’s revenue-sharing policies in the past, said the league has shifted towards “an NFL model” and blasted the league for its effort to “take down the successful franchises.”
“The NBA has made the move to an NFL model — deemphasizing and depowering the local market,” Dolan wrote in the letter. “Soon, your only revenue concern will be the sale of tickets and what color next year’s jersey will be. Don’t worry, because due to revenue pooling, you are guaranteed to be neither a success nor a failure.
“Of course, to get there, the league must take down the successful franchises and redistribute to the less successful. This new media deal goes a long way to accomplishing that goal.”
Also in the letter, Dolan criticized what he called the league’s efforts to retain $6 billion in NBA-related fees without “sufficient justification… nor transparency into how it arrived at the sum, how these fees will be allocated or to what extent the league will utilize this purported revenue growth to incur new and incremental costs and further expand the league’s ever growing expense level…”
He went on to express that the 42 million homes that have moved away from traditional paid television over the past eight years are a byproduct of media deals like the NBA’s, which will integrate streaming services into coverage of games. It’s worth noting that the Knicks’ MSG Network has suffered a 45 percent decline over an eight-year period, per Wojnarowski.
Dolan said the new media deal will hurt teams who rely on revenue from local rights fees and said the new national deal “risks rendering the entire [Regional Sports Networks] unviable.”
“Member teams depend on revenue received from local rights fees and on increased fan engagement through high quality broadcasts that provide dedicated and tailored coverage for local audiences,” Dolan wrote. “Yet the proposal threatens to completely eliminate (Regional Sports Networks) without a comparable replacement offered by the league and no articulated plans to address the production and distribution vacuum that the league will inevitably create in its quest to further disrupt the RSN industry….”
Dolan’s letter of concern comes days after the league reportedly agreed to terms on a new $76 billion media rights deal, which will go into effect ahead of the 2025-26 season. The deal sets NBA records for both length and total value.