Television money in the NBA is at an all-time high, but that isn't stopping Los Angeles Clippers owner Steve Ballmer from reportedly turning down a lot of local broadcast money to explore building an online service to broadcast his team's games.
According to Claire Atkinson of the New York Post, Ballmer rejected an offer worth $60 million per year from Fox Sports' Prime Ticket to move ahead with plans to start his own "over-the-top" online streaming network:
If he follows through on the plan, Ballmer, the former CEO of Microsoft, would be the first owner of a major US sports team to deliver games direct-to-consumer via a Web-based service and not through traditional cable or satellite companies, sources said.
Clippers games are now aired to roughly 5 million Los Angeles-area homes through Fox Sports' Prime Ticket regional sports network in a deal that runs through the 2015-16 season.
Prime Ticket's exclusive negotiating window with the Clippers expired in June, per Atkinson, meaning Ballmer is allowed to explore all opportunities. Atkinson reports some people believe the Clippers owner is using the hypothetical streaming service as leverage to get more TV money.
One person told Atkinson it could be difficult for Ballmer to get more than $60 million per season in revenue from a streaming service because of the financial logistics.
"If it costs $12 per month, multiply that by 12 months in 500,000 homes, it would add up to $72 million—but then you'd have to produce the games and market the product," the source said.
In October 2014, the NBA signed new national television deals with ESPN and TNT that go into effect starting with the 2016-17 season and are worth $2.66 billion per year through 2024-25.
A team-specific streaming service would be a new concept. The NBA does offer single-team packages through the NBA League Pass service as well as a full-season package that includes all 30 teams. Major League Baseball offers a similar package through its website.
Given the popularity and accessibility of online streaming—with both sports and regular television shows—it doesn't seem like the world is far away from sports franchises establishing their own identity in that market.
Ballmer made his fortune as CEO of Microsoft from 2000 to 2014, so if anyone in the NBA has the insight and motivation to break new ground, it would be the eccentric Clippers owner.