This episode is brought to you by:

Tegus. Tegus is the modern research platform for leading investors. I’m a longtime user and advocate of Tegus, a company that I’ve been so consistently impressed with that last fall my firm, Positive Sum, invested $20M to support Tegus’ mission to expand its product ecosystem. Whether it’s quantitative analysis, company disclosures, management presentations, earnings calls - Tegus has tools for every step of your investment research. They even have over 4000 fully driveable financial models. Tegus’ maniacal focus on quality, as well as its depth, breadth and recency of content makes it the one-stop, end-to-end research platform for investors. Move faster, gather deep research to build conviction and surface high-quality, alpha-driving insights to find your differentiated edge with Tegus. As a listener, you can take the Tegus platform for a free test drive by visiting tegus.co/patrick.

Show Notes

(00:03:11) - (First Question) - His background and his entry into the basketball business

(00:05:30) - His early interest in investigating and writing about the quirks of the NBA

(00:09:24) - Key turning points that enabled the league to mature to what it is today

(00:12:53) - An overview of the league’s economics and scale

(00:16:01) - The dynamics of negotiating national and regional TV deals

(00:18:13) - Additional context on media rights revenue across different teams

(00:18:57) - How viewership is faring with an increasingly fractured TV audience

(00:22:40) - The counter-intuitive notion that lower TV viewership can help extract more media rights profits

(00:25:47) - The international market for the NBA

(00:31:06) - The unique role of the NBA commissioner and how it compares to other sports

(00:34:12) - How individual teams and their owners influence league dynamics

(00:37:27) - Rough splits between the NBA’s various revenue streams

(00:38:33) - Additional context for media right economics

(00:39:32) - Astronomical franchise purchase prices and owner dynamics

(00:41:34) - The possibility of expansion and the creation of new franchises

(00:44:41) - How the NBA’s star players draw in fans but also wield power over the league

(00:50:07) - The extent to which players’ popularity depends on nationality

(00:54:03) - How much players make in salary versus endorsement deals

(00:57:05) - Factors that influence the career decisions a player makes

(00:58:11) - Variables that could threaten the success of the league as a whole

(01:00:26) - Probable drivers for future success and growth of the NBA

(01:02:14) - The role of marketing in the NBA’s continued success

(01:04:15) - Cues the NBA could take from other leagues in terms of its media presence

(01:07:15) - Lessons for builders and investors when studying the NBA’s story