For all young people the barrier to entry to pay basketball or soccer (football) is very low. A ball is needed and the town or city provides the field to play in. If a youngster falls in love with the sport, there are professional leagues to dream about. The barrier to entry means many people will be exposed to the sport and as they grow up will be the primary targets of watching the sports on TV. While only a very few will be able to make a living, as long as the knees are good, many will play for years to come and then possibly with their children. This is a ready made market for the professional leagues to monetize.

In an article from Reuters, the NBA is closing in on media deals with Comcast owned by NBC, ESPN owned by Disney and Amazon that would generate over $76 billion in media revenue over 11 years.

Rights to the widely watched professional basketball league are a prized possession for media companies. Sport content continues to attract a reliable and loyal audience at a time when traditional TV businesses are losing millions of subscribers to cord-cutting or people no longer subscribe to cable channels.

NBC would pay $2.5 billion a year for 100 games with half on Comcast’s Peacock streaming services. Amazon would pay $1.8 billion a year for regular season and conference finals. ESPN would pay $2.6 billion a year including the NBA Finals. ESPN is in the process of launching its direct-to-consumer streaming service in 2025.

Linking to dividend paying stocks, the NBA is the premier professional basketball league and its starting players all earn a million dollars a year plus. More importantly for the owners, because the media deals continue to increase over the years, the franchises are worth more every year. The process starts with a lack of barrier to entry to be exposed to the game and as more money flows into the system, the barriers to entry at the highest levels is very restrictive. If you can find companies that follow the same pattern, then they can deliver profits and pay dividends.

There are more questions than answers, till the next time – to raising questions.