Why the NBA's massive new TV deal will forever change the way we watch games

Lost in the excitement of the NBA playoffs has been the recent news surrounding the league and their television rights. The NBA will now partner with Amazon as well as NBC, while ending their partnership with Turner Sports and those changes are huge for the league.

Unlike Major League Baseball, for instance, the NBA's audience skews younger, with 56% of their viewers being under the age of 44. That makes their partnership with Amazon a wise one, since 200 million people have access to Amazon Prime. Additionally, the NBA re-partnering with NBC would give them access to their streaming service, Peacock, which has 30 million subscribers, and it is cheaper than most streaming services.

Although TNT has a deal with HBO Max to simulcast games, NBC is a larger network that even most cord cutters have access to for free. They were also willing to pay $2.5 billion, knowing that NBA fans would probably either spend $5.99 a month for Peacock or watch NBC to see big games.

What do the NBA's new TV partnerships actually mean?

Whenever there is a new TV deal, the salary cap spikes since the revenue is split roughly 50/50 between the owners and the players. That would be around $76 billion overall over the life of the new deal, resulting in a steady rise in the salary cap going forward, starting in a couple of seasons.

The cap is already $136 million but may rise by 10% a year with the new revenue. With so much money about to enter the NBA, it's not surprising that expansion may soon happen too. Adding two new teams would give the NBA around $4.5 billion for the rights to each new expansion team.

That would also help to slow the increase in player salaries with revenue being split among 32 teams instead of 30. Of course, it would add 30 new NBA jobs, with up to 36 including the two-way roster spots. It would also mean more games and more opportunities for Amazon and NBC to broadcast them and for the NBA to expand its reach.