NBA TV ratings fluctuate. Broadcaster rights costs don't.
While the NBA touts ratings gains, costs sink broadcasters' quarterly earnings.
NBC called it a “triumph.” ESPN called it their most-watched season in seven years. The NBA called it record-setting — the most-watched regular season in 24 years. Then the broadcasters reported earnings.
NBC’s Peacock lost an additional $200M+ on an Adjusted EBITDA basis relative to Q2 2025 — notable given that Wall Street has been laser-focused on streaming profitability, and because NBC cited Peacock as a central rationale for buying NBA rights in the first place. ESPN’s revenue increased just 2% versus Q2 2025, while costs were up 3% and operating income fell 5%.
Across X, their websites, and press releases, the ratings praise was circulated widely by the league, its broadcasters, and sports business writers. For many analysts, the numbers were a thumb on the scale for the argument that “the NBA is back.” Accepting the historical comparisons at face value, a financial windfall seemed like a reasonable expectation. The earnings told a different story.
The key culprit weighing down both companies is the cost of the new NBA rights — and those costs are here to stay. The 11-year packages that began this season carry annual escalators of 5%-10%, meaning the expense grows and compounds whether ratings go up or down. For ESPN, an even bigger hit may come in Q3, when they air and absorb the cost of the bulk of playoff games.
The NBA and broadcaster PR teams will remain fixed on annual ratings fluctuations — which are real, inevitable, and tied to team matchups, series lengths, and measurement methodology. But ratings fluctuations typically don’t move broadcaster financials much. Massive, locked-in, escalating rights fees do. If ratings swing 10%-30% randomly over the next five years while costs outpace revenue by 2%-3% every year, the posts on X will still be celebratory. The earnings won’t be.
The Next Move: Watch Q3 earnings closely for ESPN — that’s when the playoff tab comes due. Same for NBC (part of Comcast) — which has said it wants Peacock to approach profitability soon. More broadly, this is the dynamic that makes the next round of rights negotiations (NFL, MLB, college) worth paying close attention to: the broadcasters who just committed to the NBA now have less flexibility and more pressure to prove the model still works. That changes their leverage at every future table.