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New TV Deal For NBA has huge impact on league, Miami Heat

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In a press release distributed by league offices, the NBA has negotiated a television deal that is approximately worth $2.67 billion. The deal will increase the salary cap and play a factor in all future negotiations, in Miami and with all 29 other franchises.

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The NBA has been negotiating an expanded television deal for some time now and, according to a press release sent out by the league Monday morning, an agreement has been reached. Here is the language in the release:

The National Basketball Association (NBA) has expanded its partnerships with Turner Broadcasting System, Inc. and The Walt Disney Company through new, nine-year agreements under which ABC, TNT, and ESPN will televise NBA games beginning with the 2016-17 season and running through the 2024-25 season.

Disney, of course, owns both ABC and ESPN.

The deal is worth approximately $2.67 billion according to experts familiar with the negotiations. There are several impacts of the deal, both in terms of increased coverage and how this affects individual franchises and, most importantly, the salary cap.

Among the impacts to coverage are the following (as per Ira Winderman):

  • ESPN and TNT will televise more national regular-season games (ABC/ESPN: 100; Turner: 64) and will continue to do so generally on Wednesdays (ESPN), Thursdays (TNT), Fridays (ESPN), and Sundays (ABC/ESPN)
  • NBA TV's Sunday, Monday, Tuesday and Saturday game telecasts will continue to fill out the schedule. NBA TV will present over 100 regular-season games each year
  • The NBA and Turner will also debut the first-ever NBA Awards Show, an annual event that will air at the end of the season.
  • WNBA games will continue to be televised on ABC and ESPN/ESPN2 through the 2025 season. And beginning with the 2016-17 season, for the first time, at least 20 NBA Development League games and NBA Summer League games will be on ESPN's networks.

As far as the salary cap is concerned, each team is expected to see a significant jump in the cap that will take place in 2016, when the new TV deal is in firmly in place. Projected growth for the cap has been suggested to be anywhere from $94 million to $88 million; the salary cap for this season is $63.

SB Nation's Tom Ziller had a great breakdown of three consequences to the salary cap:

  1. Player salaries are going to explode: Ziller suggests that a leading free agent option in 2016 (Kevin Durant), could command as much as $162 million dollars for a five-year deal with his current team, the Oklahoma City Thunder. If Durant signs elsewhere (say his hometown team the Wizards), he could sign a four-year deal worth $120 million. Obviously, this trickles down to other, non-superstar players as well and we could be living in a world where a team's 12th-man could make upwards of $5 million a season.
  2. Players are going to angle to be free agents in 2016: Another no-brainer here but, basically, expect to see a lot more short-term deals or player options exercised in 2016 and beyond with this new pool of money suddenly available.
  3. We might avoid another lockout: Ziller's point is that the deal "might just erase the losses that a number of teams claim they are still suffering." Whether those losses are real or fabricated, owners want to make a lot of money for being part of the NBA and this new deal certainly increase that likelihood. Ziller states that the deal could add as much as $30 million in profit to each team per year.

However, there is reason to believe that the NBA will "smooth out" the boost to the salary cap, hoping to gradually increase it over years rather than having one huge jump that could have lasting, damaging impact to some teams (kind of how some lottery winners go broke...having a lot of money too quickly doesn't necessarily guarantee you'll be any smarter in how you manage it).

Calling this deal a game changer is the understatement of the year. But how does this impact Miami's short- and long-term financial commitments?

First, some basics. Miami only has three commitments in places for the 2016 season; Chris Bosh, Shabazz Napier and Josh McRoberts. Bosh's five-year deal extends to 2019, Napier's rookie contract could run past 2016 (due to a team option) and McRoberts signed a four-year deal but has a player option that could terminate his agreement with Miami in 2016. Other current Heat players like Dwyane Wade, Luol Deng, Mario Chalmers and Udonis Haslem all signed short-term deals this past summer.

As Winderman points out, Miami has clearly been positioning themselves with this new deal in mind. By 2016, there will be considerable salary cap space and the team could conceivably make a run at some big free agent names, including Durant.

While many criticized Miami's choice to sign Bosh to such a lucrative deal, a versatile player like Bosh will likely still be a productive player in two years and his deal is much more "cap-friendly" considering the infusion of cash now set to take place.

This is no guarantee that Miami will be able to successfully navigate through the nebulous financial waters of the next few seasons - plenty of teams have freed up space in the past and whiffed badly on luring free agents (think L.A. Lakers and Houston Rockets this summer). But Miami is still considered a premium destination and with the stability of the front office, coaching staff, championship history and commitment to excellence, the team seems poised for a continued bright future.