New York Knicks owner James Dolan criticized the NBA's revenue sharing policies, denouncing a possible eight percent league office cut of the new $74.6 billion media deal and a national television and streaming package that he says renders the league's Regional Sports Networks as “unviable,” according to a letter shared with the NBA's Board of Governors, per Adrian Wojnarowski of ESPN.
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 claimed that the NBA does not want to hear his opinions and do not want his opinions as a result of the league not showing any support in his lawsuit against the Toronto Raptors over the summer. As he did so, Dolan stepped down from his positions on the NBA board of governors' influential advisory/finance and media committees.
In the letter shared on Monday, James 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 writes in his 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.”
Knicks owner James Dolan's long list of grievances against the NBA
Dolan laid out 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…”
The Knicks owner compared 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.
Dolan cites issues with proposed revenue sharing in the NBA's sponsorship and local television packages. 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 writes, “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.
Dolan concludes: “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….
The Knicks, always one of the most highly valued franchises in the NBA, returned to prominence on the court last season.
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