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Clock ticking for NBA

Aug 20, 2001  •  Post A Comment

It’s crunch time for the NBA.
The league is heading into the last season of its four-year, $2.64 billion contracts that were wrought in flusher times, when Michael Jordan drove the bull basketball market and the American economy was on an even bigger bull ride. It was a time when the NBA’s TV partners, NBC and Turner Sports, were willing to more than double what they had paid for the previous four years of NBA rights.
Midway through the current contract, in 1998, Mr. Jordan walked away from the game, taking viewers with him by the millions. Though the NBA Finals on NBC this year and last both mustered up year-to-year increases (4 percent this year and 3 percent the previous year), the regular-season packages sagged on NBC (down 12 percent over 34 games last season) and on TNT and TBS (down 15 percent over 81 games last season).
With the ad-market slump continuing to drain dollars out of media pockets, the question is whether there could be a worse time for the NBA to be negotiating new deals.
“No way,” said one longtime observer of sports rights negotiations.
But while the NBA may be operating under a dark cloud, that cloud is not without silver linings. Among them are the possibility that Mr. Jordan, president of basketball operations for the Washington Wizards, may make a comeback as a player; the notion that the 76ers’ Allen Iverson and the Lakers’ Kobe Bryant can indeed grow into superstars; and the NBA’s untapped digital assets.
Some think the NBA’s digital rights-which are a contract factor for the first time and include NBA.com, the League Pass pay-satellite package and NBA.com TV-could prove to be pure gold for NBA Commissioner David Stern, who was on vacation and unavailable for comment on this story. He has indicated in the past that he’s not looking for huge increases in TV rights, but he does see possibilities for dramatic increases in the bundling of the ancillary assets, from digital to international rights.
“Any of the networks would love to have the NBA if they could schedule it,” said Neal Pilson, former president of CBS Sports and now a sports consultant.
But sports-rich CBS and Fox, which have sister cable outlets, are bulging at their programming seams and would find it all but impossible to give the games the exposure the NBA needs on broadcast television. “Cable is not a substitute for network here,” Mr. Pilson said.
Mr. Pilson said he thinks NBC Sports will keep the NBA. “You always look to see which network has the biggest need,” he said.
It’s harder to predict the NBA’s next cable partner.
There has been speculation that Jamie Kellner, the Turner Broadcasting chairman who runs all of AOL Time Warner’s ad-supported TV networks, would prefer not to have NBA games interrupting the programming flow on TNT and TBS.
But at Turner Sports, which is heading into its 18th consecutive season as a partner of the NBA, a spokesman said, “The NBA is a valuable property to us. We hope we can maintain the relationship we have had for a long time.”
ESPN, which has had a number of radio, dot-com and programming partnerships with the NBA, is expected to compete for a significant piece of the NBA pie.
“Major properties don’t come on the market very often, and when they do you have to take a very hard look,” said Mark Shapiro, senior vice president and general manager of programming at ESPN Networks.
While parent company Disney treats ABC Sports and the ESPN empire as one entity, some observers say it is unclear whether Disney will use the broadcast network as leverage to land a cable and ancillary package.
At Fox Sports, which is so rich in major-league franchises that it was handicapped in bidding for PGA events, carving out sufficient national windows on the regional Fox Sports Nets would be nearly impossible.
Sources said Mr. Stern will begin talks with partners NBC and Turner Sports on Sept. 15, when their exclusive negotiating window opens. The exclusive window is meant to close a month later, but sources said Mr. Stern is not wedded to the calendar.
Mr. Pilson said when the deals are wrapped up, “We’ll all use words like `modest’ or `reasonable”’ to describe the broadcast rights fees and “substantial” to describe the ancillary fees.
Either way, he said, “I don’t think anyone needs to be holding benefits for the NBA.”