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Adrian Wojnarowski, ESPN
New York Knicks owner James Dolan continued to criticize the NBA's revenue-sharing policy, slamming the league office's potential 8% cut of a new $74.6 billion media deal and national broadcast and streaming packages that would make the league's regional sports networks “unviable,” according to a letter submitted to the NBA Board of Governors and obtained by ESPN on Monday.
Dolan has consistently criticized the league's revenue-sharing policy, which spreads local media rights and sponsorship deals from higher-paying, larger-market teams to smaller-market teams. In a letter to the board of governors in November, Dolan resigned from his positions on the league's influential advisory, finance and media committees, as reported by ESPN. He previously filed an unusual lawsuit against the Toronto Raptors questioning commissioner Adam Silver's objectivity.
In a letter shared Monday, Dolan outlined new objections based on the league's proposal shared with owners on sharing revenue from a newly negotiated $74.6 billion media deal.
“As the NBA moves toward the NFL model, it is marginalizing and weakening local markets,” Dolan said in the letter. “For the foreseeable future, your only revenue concerns will be ticket sales and next year's uniform color. Don't worry, because by pooling revenues, there is no guarantee of success or failure.”
“Of course, to get there, the league will have to dismantle its more successful franchises and redistribute them to its less successful franchises. This new media deal will go a long way to achieving that goal.”
Dolan criticized the league's plan to retain $6 billion, or 8 percent, of total NBA fees, saying there was “no sufficient basis or transparency as to how that amount was calculated, how the fees would be allocated, or the extent to which the league will use this estimated revenue increase to incur new and additional costs, further expanding the league's ever-increasing expense levels.”
According to the letter, Dolan expressed dissatisfaction with the league's proposal's $358 million increase in 2025-2026 compared to the league's current media contract's $15 million (0.5 percent) retention for the 2024-2025 season.
According to the letter, Dolan also took issue with the league's proposed revenue sharing for sponsorship and local television packages. Dolan wrote that the league's “proposal would also negatively impact the value of each member team's local sponsorships,” which would result in “on-camera perks being offered at just 23 home games, a reduction of approximately 20 percent from those previously offered.”
Dolan also said that “team sponsors and partners will no longer be protected” during national broadcasts, which would undermine the value of the premium that they can charge member team sponsors as the only third parties to be promoted in certain sponsorship categories.
“…These changes will create an especially unfavorable environment for member team sponsors and significantly increase the challenges associated with obtaining and renewing critical sponsorship revenues.”
Dolan noted that 42 million households have abandoned traditional pay TV in eight years, and that those losses (including a 45% decline in the Knicks' MSG Network) have been exacerbated by the league's new streaming and television deals, which Dolan wrote make RSNs “unviable.”
“Affiliated teams rely on revenue generated from local rights fees and increased fan engagement through high-quality broadcasts that provide tailored coverage specific to local audiences.
“But the proposal threatens to eliminate (regional sports networks) entirely without the leagues offering comparable alternatives, and with no clear plan to address the production and distribution gap that the leagues will inevitably create as they seek to further disrupt the RSN industry…”
According to Dolan, “The increased number of exclusive and non-exclusive games means that our national partners can broadcast nearly half of the regular season and every postseason game. A reduction in the number of games available on RSNs threatens to make the entire RSN model unviable.”
“The inclusion of streaming partners (Amazon Prime Video, Peacock, etc.) in this proposal would allow fans in all NBA markets to watch select games in their local market without going through an RSN. This proposal does not provide local protection for RSNs.”
Dolan concluded in the letter, “We believe our concerns are shared by many stakeholders around the league, all of whom will be similarly affected. The league will likely say it's OK because franchise values will continue to increase, because it expects to eventually sell…”
“Once again, ownership pride has fallen victim. We are becoming a uniform, personality-less organization. We must remember that we owe it all to owners like Jerry Buss.”
