NBA-MGM Deal: How The Partnership Impacts NBA Players
With the NBA-MGM deal representing the first time in history that a major pro sports league has partnered with a casino operator, there are several question marks regarding future implications.
Details Of The MGM-NBA Contract
The facts that we do know are that the deal is mostly non-exclusive in terms of what MGM Resorts International receives. Under the agreement, MGM will become the official betting sponsor of the league and also gain rights to NBA logos and branding. MGM casino properties will be able to advertise across NBA.com, NBA TV, and the NBA mobile app, while the NBA will utilize the same type of cross-promotion.
MGM and its multiple casino properties will receive real-time, official data on NBA and WNBA games, though exact details on the types of data have not been revealed to the public.
“Ultimately, it was on us to convince MGM that there was a commercial benefit to compensating us for that data,” Silver said. “This wasn’t just about doing the right thing in terms of intellectual property, but that through this relationship with the NBA and WNBA, Jim could differentiate his business from his competitors.”
It has also been reported that the deal lasts for three-years and the NBA will receive $25 million from the casino operator for access to their assets.
Financial Implications For NBA Players
While the main selling points of the contract have been disclosed, there has not been as much transparency on how the deal might impact the actual players.
The National Basketball Players Association (NBPA) issued a joint statement with the NHLPA, NFLPA, and MLBP prior to the Supreme Court ruling on PASPA, stating that their players deserve “a seat at the table” due to the effects that gambling could have on athletes’ privacy and publicity rights.
Additionally, if leagues and casino interests are able to profit from sports betting, it is not unreasonable for the players that actually participate in the games also receive compensation. Fortunately for players, it seems as if the language within their collective bargaining agreement with the league will ensure that they also profit from sports betting deals.
“Basketball related income” (BRI) is defined in Article VII of the CBA and essentially covers the various types of revenue generated from NBA games. The definition of BRI also specifically mentions gambling, reading that “all proceeds, net of Taxes, less reasonable and customary expenses…from gambling on NBA games or any aspect of NBA games…” are included. BRI is split almost evenly between owners and players, with each party receiving either 49% or 51% depending on the specific circumstance.
The revenue from the partnership with MGM and the NBA would be counted as BRI, which means these types of deals mean more money for players. Additionally, BRI is also directly correlated to a team’s salary cap – the higher the BRI the more money there is to spend.
Now, $25 million is the equivalent of about $1,000 bucks when compared to the $24 billion contract the league signed with ESPN and TNT in 2014. However, the NBA has the potential to earn billions by inking additional sports betting deals with casino operators and other gaming interests. This, in turn, would increase salary caps and allow players to negotiate contracts at a higher value.
Public Privacy Implications For NBA Players
One of the most valuable assets that MGM Resorts received in the deal was access to real-time NBA data. The league will share data related to NBA players, most of which will likely be proprietary in nature.
Though the CBA does work to protect the intellectual property and biophysical data of NBA athletes, entering partnerships with third-parties does leave room for misuse of data. Player privacy is a top priority for league officials, but it is not unfathomable that an operator would use sensitive data for their own profit.
There have been known leaks when it comes to player confidentiality. Take for example the 2003 incident where four MLB players took a confidential survey for performance-enhancing drugs. Their names were eventually released to the public, though they gave their information on the condition of anonymity.
The NBPA and NBA will have to deploy additional measures to ensure that their technology partners uphold ethical standards in regards to player privacy.
What The MGM-NBA Means Overall
For the most part, MGM becoming the official betting sponsor of the NBA is a huge step in the right direction for the future of sports betting. It shows not only that the NBA has changed its views toward sports gambling, but other leagues as well.
Earlier this week, NHL commissioner Gary Bettman revealed that the league would be open to entering into a similar deal with a casino operator. As more leagues begin to partner with betting interests, consumers will have increased wagering options and greater accessibility.
While it is still too early to know if and when other leagues will join the NBA in their support of sports betting, so far the widespread regulation of sports gambling has been beneficial to all parties across the board.