The Big Lead

Again: Cord Cutting is NOT the Biggest Reason For NBA Ratings Hiccups

By Ryan Glasspiegel

Kevin Durant, Klay Thompson, and Stephen Curry
Kevin Durant, Klay Thompson, and Stephen Curry / Ezra Shaw/Getty Images
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The reasons for NBA ratings declines this season have been debated ad nauseam, but I keep seeing the decline in cable and satellite subscribers presented as the biggest variable. While it is certainly a factor, it is not the prevailing one. Every other major sport this year has weathered cable declines with less disruption than the NBA has had.

The biggest voice in this conversation has been Mark Cuban, who tweeted, "Ratings are down because all of our national broadcasts are exclusively available on cable, which is losing subs daily. Football benefits from being on broadcast tv which is in every digital and traditional package along with gambling available in some of the biggest markets."

"On the flip side we help all cable broadcasters and distributors stay alive by keeping sports packaging alive, hopefully for the next 10yrs or more. Once it makes sense to simulcast streams in a low cost digital package, numbers will change," Cuban continued. "And ratings also don't capture the full commitment to a sport. Look at social media, YouTube/insta/snap/fb streams , live and highlights. They don't pay as much, but they are a reflection of demand for younger demos and global interest . It's truly an Innovators Dilemma."

The sentiment from the beginning of Cuban's remarks was echoed by media stock analyst Rich Greenfield in a story about NBA ratings in the Wall Street Journal:

"Most broadcasters, including the ones that have NBA rights— AT&T Inc.'s Turner Sports and Walt Disney Co.'s ESPN and ABC—are fighting an uphill battle as more viewers abandon the traditional pay-TV bundle for internet-based options, said Rich Greenfield, a media and telecommunications analyst at LightShed Partners. “There is no doubt that the talent in any season can push ratings up or down,” Mr. Greenfield said. “But everyone is fighting a very, very difficult underlying trend, which is less people subscribing to TV. And of the people who are subscribing to TV, they’re watching less and less every day.”"

- WSJ

Greenfield is right that the Pay TV ecosystem has been dwindling, though it should be noted that the rate of subscriber losses has decelerated. ESPN, the bellwether of the cable sports industry, was in about 100 million households in 2012 and in about 85 million this past April. The network lost over 11 million subscribers from 2012 through 2016, and about 4-5 million in the several years since. One of the reasons that the rate has lessened is because ESPN is a big part of many OTT bundles. And to Cuban's point, business is booming for sports on broadcast TV (NBC, ABC, Fox, and CBS).

So yes, cable networks are in less households. But, to borrow Greenfield's words, every major sport is "fighting a very, very difficult underlying trend" more successfully than the NBA right now:

1) Monday Night Football viewership on ESPN has been up eight percent year-over-year for two consecutive years, and just had its most watched season since 2015.

2) ESPN college football playoff viewership was up 6 percent versus 2018. Sunday Night Baseball viewership on ESPN was up in 2019 vs. 2018.

3) Regional baseball ratings have held up better than regional NBA ratings, and these games are all on Pay TV on both sides. As we wrote before, regionally, the NBA was down 4.2 percent (2.4 vs. 2.3) from 2017-18 to 2018-19. Sports Business Journal reported that NBA regional ratings were down another 7 percent in the first month of this season. MLB regional ratings were down just 1 percent from 2018 to 2019 (2.89 vs. 2.86).

4) The NHL was up 4 percent year-over-year on NBCSN in 2018-19 compared to 2017-18. For this season, an NBC spokesperson says NHL games on NBC and NBCSN are up 11 percent compared to last season at this point, and having the best start in three seasons. There has only been one NHL game on NBC's broadcast network so far this season, so a lion's share of the growth has occurred on cable.

The WSJ had the NBA down about 15 percent year-over-year as of December 18th. In the story, the NBA and officials at Turner and ESPN attributed the drops more to injuries than cord cutting. The story also mentions the imbalance of stars (especially LeBron James) playing out West.

It's presumable that the NBA would be more sensitive to cord-cutting than sports like football and baseball, which have older viewership demographics who are less likely to flee cable or satellite than the younger crowd. Nonetheless, injuries to Kevin Durant, Steph Curry, Klay Thompson, and Zion Williamson have had a bigger effect than marginal household losses over the past year or two. So has the concentration stars on the west coast.

Further, in my opinion, there is an apathy about the regular season because the games don't have major stakes -- over half the league makes the playoffs, then the playoffs last for about two months, and home-field advantage on the margins is not a greater benefit to teams than rested legs -- that the NBA is going to have to figure out how to address. Perhaps the league's outspoken players and coaches with regards to social justice has also alienated some Republican viewers on the margins.

Provided LeBron James stays healthy and everyone who is hurt now recovers on schedule, the NBA is almost certainly going to get a bump next season. LaMelo Ball, James Wiseman, and RJ Hampton will also provide intrigue. I don't know if this eventual midseason tournament will get the buy-in it needs to be compelling, but the league is open to trying new things.

NBA commissioner Adam Silver recently told the Washington Post that he is unconcerned about the TV ratings, as popularity indicators including attendance, global engagement, merchandising, and League Pass viewership are up. We've described the flex scheduling processes that will ensure there are less games of the zombie Warriors on national TV, but there's no magic elixir that will make these games replaced with teams that are more exciting to watch than last season's Warriors.

An NBA spokesperson tells The Big Lead that League Pass viewership is up 2 percent worldwide compared to last season, that OTT viewership is up 18 percent on TNT and 16 percent on ESPN compared to last season, and that digital viewership is up 26 percent on TNT and 24 percent on ESPN. While these numbers almost certainly don't make them whole on TV losses, there is robust growth on the platforms where more people will be watching content in the future.

It seems likely at this point that more of the NBA's nationally televised games will move from Pay TV to broadcast TV over the next decade, but at this moment cord cutting cannot reasonably be attributed as the prevailing reason for present ratings declines.