Knicks’ Dolan criticizes new media deal in letter

New York Knicks owner James Dolan leveled continued criticism on the NBA’s revenue sharing policies, outlining a denunciation of a possible eight percent league office cut of the new $74.6 billion media deal and a national television and streaming package that renders the league’s Regional Sports Networks as “unviable,” according to a letter shared with the NBA’s Board of Governors and obtained by ESPN on Monday.

Dolan has been a consistent critic of league revenue sharing policies that spread local media rights and sponsorship deals from high-earning big markets to smaller market teams. In a November letter to the Board of Governors, Dolan resigned his positions on the league’s influential advisory/finance and media committees, ESPN reported. He previously launched an unorthodox lawsuit against the Toronto Raptors that questioned the objectivity of commissioner Adam Silver.

In the letter shared on Monday, Dolan outlined new objections based on a league proposal shared with owners about the dispersion of revenues with the newly negotiated $74.6 billion media deal.

“The NBA has made the move to an NFL model — deemphasizing and depowering the local market,” Dolan wrote in the letter. “Soon, your only revenue concern will be the sale of tickets and what color next year’s jersey will be. Don’t worry, because due to revenue pooling, you are guaranteed to be neither a success nor a failure.

“Of course, to get there, the league must take down the successful franchises and redistribute to the less successful. This new media deal goes a long way to accomplishing that goal.”

Dolan outlined his criticism of what he called the league’s plan to retain “…$6 billion (or 8 percent) of the total-NBA related fees…..” without “sufficient justification … nor transparency into how it arrived at the sum, how these fees will be allocated or to what extent the league will utilize this purported revenue growth to incur new and incremental costs and further expand the league’s ever growing expense level…”

Dolan made a comparison to the league retaining $15 million (0.5 percent) in the league’s current media deal for the 2024-2025 season and expressed a dissatisfaction with an increase of $358 million in 2025-2026 under the league’s proposal, according to the letter.

Dolan cited issues with proposed revenue sharing in the league’s sponsorship and local television packages too, according to the letter. According to Dolan, the league’s “…proposal would also have a negative impact on the value of each member team’s local sponsorships,” including “…the delivery of camera-visible benefits at as few as 23 home games — roughly 20 percent reduction to what was historically provided.”

Also, Dolan wrote, “team sponsors/partners would no longer be protected” during national broadcasts, which undercuts the premium that member team sponsors can be charged for being the sole third party promoted in a specific sponsorship category.

“…These changes drastically increase the challenges associated with attracting and renewing vital sponsorship revenue by creating a particularly unfriendly environment for member team sponsors.”

Dolan cited the 42 million homes that have abandoned traditional paid television over an eight-year period and how those losses — which include a 45 percent decline for the Knicks’ MSG Network — have been compounded by the league’s new streaming and television deals. Dolan wrote that the league’s new national deal renders the RSN’s “unviable.”

“Member teams depend on revenue received from local rights fees and on increased fan engagement through high quality broadcasts that provide dedicated and tailored coverage for local audiences.

“Yet the proposal threatens to completely eliminate (Regional Sports Networks) without a comparable replacement offered by the league and no articulated plans to address the production and distribution vacuum that the league will inevitably create in its quest to further disrupt the RSN industry….”

According to Dolan: “The increased number of exclusive and non-exclusive games means that national partners would have the ability to air nearly half of the regular season and all postseason games. This reduction in available games for RSNs risks rendering the entire RSN model unviable.

“The inclusion of streaming partners in the proposal (e.g., Amazon Prime Video, Peacock) allows fans in all NBA markets to bypass their RSN to watch certain games in their local market. The proposal offers no local protections for RSNs.”

In the letter, Dolan concluded: “We trust that our concerns are shared by many of our counterparts across the league, each of whom will be similarly impacted. The league will say that it does not matter because your franchise value will continue to rise; that contemplates you will eventually sell….

“Once again, pride of ownership is what is sacrificed. We are well on our way to becoming a one size fits all, characterless organization. Just remember we did this on the backs of owners like Jerry Buss.”