at the Smoothie King Center on February 1, 2016 in New Orleans, Louisiana. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement. Stacy Revere

There are only three players in NBA history who have made over thirty million dollars a season: Michael Jordan, Kobe Bryant and Mike Conley.

In case you aren’t aware Mike Conley is a point guard for the Memphis Grizzlies. He’s somewhere around the 8th best point guard in the NBA and he just cashed in for a five year $154 million contract as a result of the NBA’s surging league salary cap, which mandates that players get half of the revenue produced by the the league.

Conley’s contract, along with billions of dollars also doled out to players who are of middling competitive value, was a record scratch moment for many fans and casual observers of pro sports. If Mike Conley, somewhere around the 30th best player in the NBA, is suddenly the third highest paid player of all time (not adjusted for inflation, but still) it left many asking how this happened.

And the answer is simple — because sports rights are a bubble that’s poised to pop. But it’s not just ESPN and Fox and CBS and NBC that are potentially going to lose a lot of money on sports rights as the cable and satellite industry bundle crumbles, it’s players too. That’s because everyone, the cable companies, the leagues, and the players are all floating along in a mutually beneficial sports rights bubble right now.

In many ways I believe Mike Conley’s $30 million dollar contract was the equivalent of a banker in “The Big Short” finding out that a Florida stripper owned five homes. It demonstrates how flawed the market really has become.

Of course, some of you will argue that Conley’s contract is simply a function of market realities, but that ignores the fact that sometimes markets break and, for a time, can behave irrationally. We saw it with NASDAQ stocks in the early 2000’s, in the recent subprime housing collapse that nearly torpedoed the entire global economy, we saw it with tulips in Holland in the 17th century, really, read up on this if you haven’t before, and we’ll see it again and again throughout human history. If anything, social media may make bubbles more likely today than in past years. After all, bubbles are the product of frenzy, excitement, and the masses losing their heads. If that doesn’t perfectly describe our present era, what does?

What’s important to note is that in the long term markets behave logically, but in the short term they can behave erratically, occasionally they can even behave irrationally. Right now, in my opinion, sports rights fees are behaving irrationally because they are being held up by an artificial market, namely, the cable bundle which allows companies to make billions of dollars a year off people who never watch a sports game.

I’ve written a ton about this, but on its most basic level every channel has a cost in your cable bill. You don’t realize it because your cable bill isn’t broken down by individual channel cost, but ESPN is by far the most expensive channel on all our cable bills. Every single cable and satellite subscriber pays around $80 a year for ESPN. With 92 million subscribers, that means ESPN pockets around $7.3 billion a year just in cable and satellite subscription fees.

What does ESPN do with that money? It buys sports rights.

Presently ESPN is on the hook for the following yearly rights payments: $1.9 billion a year to the NFL for Monday Night Football, $1.47 billion to the NBA, $700 million to Major League Baseball, $608 million for the College Football Playoff, $225 million to the ACC, $190 million to the Big Ten, $120 million a year to the Big 12, $125 million a year to the PAC 12, and hundreds of millions more to the SEC.

At an absolute minimum it would appear that ESPN presently pays out nearly $6 billion a year to sports leagues just in rights fees.

The money from those rights fees comes from our cable bills. And, significantly, from tens of millions of people who will never watch a single game on ESPN.

If this information fascinates you — and it clearly fascinates me — then you can read more about the challenge cable companies faces when it comes to sports rights here.

Suffice it to say, sports is a major driver behind the cost of the cable and satellite bundle. Six of the ten most expensive individual stations feature sports, the two most expensive of which carry all the NBA’s games.

(Channel cost per month per cable and satellite subscriber per SNL Kagan. I’ve bolded the stations that feature sports.)

1. ESPN $6.61

2. TNT $1.65

3. Disney Channel $1.34

4. NFL Network $1.31

5. Fox News $1.12

6. USA Network $1.00

7. FS1 $0.99

8. TBS $0.85

9. ESPN2 $0.83

10. Nickelodeon $0.73

As you can see, the two most expensive cable channels carry the NBA, ESPN and TNT. Indeed, the NBA recently signed a nine year $24 billion dollar deal extension with ESPN and TNT, ESPN pays $1.47 billion a year and TNT pays $1.2 billion. The result is the NBA nearly tripled its rights fees in its most recent deal. I believe this represents the absolute apex of the sports rights bubble. If the NBA went to market this year, it would not get this same deal.

Which brings us to Mike Conley’s contract.

The NBA now receives $2.66 billion a year from ESPN and TNT and half that money must be redistributed to the players.

Which is how Mike Conley, the eighth best point guard in the league, ended up the third highest paid player of all time. This TV deal runs through the 2024-25 season so you can’t blame the NBA for taking the money, but you can ask an interesting question — how is the amount that ESPN and TNT paid justified by existing market conditions?

Remember, it’s not ESPN paying the NBA for its games, it’s us, the cable and satellite subscriber. ESPN and TNT are just taking our money and passing it along to the NBA. Moreover, the vast majority of cable and satellite subscribers are paying for the NBA and they’ll never watch a single NBA game. Right now every single cable and satellite subscriber is paying roughly $2.50 a month for these NBA games, or $30 a year. (Since the NBA only plays eight months a year, you’re actually paying $3.75 a month for the eight month season. Remember, the NBA Finals are on “free.” TV)

Given that every single cable and satellite subscriber is paying $30 a year for the NBA, how many people actually watch the most popular of these games? The Western Conference Finals on TNT were a scintillating seven game series that saw the Golden State Warriors surge back from a 3-1 series deficit to beat the Oklahoma City Thunder. It was the highest rated series in TNT history and an average of 9.9 million people watched each game.

Which sounds like a lot.

But another way of looking at that would be by saying this — 84 million cable and satellite households didn’t watch this series. That is 90% of people didn’t care to watch the best western conference finals in NBA history. That’s actually pretty common, sports fans are a vocal minority of the overall American population.

And that’s the western conference, ESPN had the eastern conference finals and ratings were dismal. An average of just 5.5 million people tuned in for the Cleveland Cavaliers closing out of the Toronto Raptors. (The NBA Finals are on ABC, which everyone gets for free. The NBA Finals ratings were outstanding, but, again, it’s on broadcast television which doesn’t require a cable or satellite subscription to watch.)

The cable bundle’s a great deal for us sports fans because 90% of people who don’t watch the eastern or western conference finals are subsidizing the cost of our sports on cable. I love watching the NBA, I’m happy I have to only pay $30 a year to do it.

But would I be so happy to be paying $30 a year for the NBA if I was like the vast majority of Americans and never watched?

Which brings us back to the NBA’s player contracts.

Right now ESPN and TNT are making back their investment in the NBA because they are able to charge over 90 million people for the content they’re buying. That’s even though the vast majority of the people they’re charging won’t watch their games. The trickle down effect leads to Mike Conley making over $30 million a year. But here’s the problem, the cable bundle is fraying. ESPN has lost 10 million subscribers in the past three years, that’s hundreds of millions in lost revenue. More ominously, only 6% of cable subscribers say they would pay for ESPN if it were offered direct to consumers. (Where those subscribers are going is a good question, are they old and dying off or are they young and making the conscious decision not to subscribe? We don’t know, but it honestly doesn’t matter because the key thing is they’re leaving.)

So how would the NBA replicate its $2.7 billion a year without the cable bundle? Remember, right now every single cable and satellite subscriber, whether they watch the NBA or not, is paying $30 a year for the NBA’s games.

Let’s presume that there are roughly 10 million diehard NBA fans out there. (That’s being generous since it represents the top end of the highest rated playoff games in cable history. That is, the vast majority of these ten million people are not building their nights around January NBA regular season basketball. Hell, the vast majority probably don’t even watch regular season NBA basketball at all.)

In order to replicate this $2.7 billion a year in national TV money, the NBA would have to get those ten million people to each pay $270 a year for their games, or roughly what the NFL Sunday Ticket costs every year.

You may think that sounds doable, but so far the market would say you’re wrong.

Did you know that only two million people are willing to pay for the NFL Sunday Ticket, which gives you every NFL game airing outside of your market? Given that the NFL’s ratings destroy the NBA’s ratings, don’t you think it’s significant that the NFL can only get one fifth of the subscribers the NBA would need to replicate its existing TV revenue?

So how many of those ten million NBA fans would pay for the NBA if it wasn’t already a part of their cable bills? Let’s be generous and say it’s two million diehard fans, the same number paying for the NFL Sunday Ticket.

That would mean that the NBA’s television package on the open market offered direct to fans would garner $540 million a year.

That’s a deficit of over $2 billion dollars.

So if the market would only support a payment of $540 million and the market is actually paying nearly $2.7 billion, that’s the very definition of a bubble. (The reason ESPN and TNT are paying this much of a premium is two fold: 1. their market is artifically propped up by subscribers who never watch their network and 2. the bubble only stays afloat if you can justify your monthly subscriber fees. Which means, you guessed it, you have to overspend.)

The problem is this bubble isn’t sustainable. (Unless, and this has to be what the leagues are praying happens, a new bidder comes up in to prop up the bubble and lose money. That is, Facebook, Google, Apple or Amazon decide to lose money by overbidding for sports rights. But so far these companies haven’t shown any interest in that. Why would they throw good money after bad money when their business model doesn’t demand it? Again, the reason why TNT and ESPN have to pay so much for the NBA is because that’s how they justify what they’re paid every month in subscription fees. Without the games, what is ESPN? It’s just a sports highlights network with some opinion. Hence, the networks are desperately trying to keep the bubble from popping around them.)

It’s this sports rights bubble that allows Mike Conley to make over $30 million a year. Players, teams, and leagues are all inside an artificial sports right bubble that isn’t a function of economic reality.

My point is pretty simple: there has been a ton written about the trouble that media companies could be in as the cable bundle comes under siege, but most people aren’t taking the next step and pointing out the danger the leagues and players are also facing.

When this sports rights bubble pops — and make no mistake, it’s going to pop — it’s not just the cable companies that are going to get crushed, it’s the players and the leagues too.

So enjoy those contracts while you can, pro athletes, they may not happen again for 25 years.