The NBA and NBC Sports announced a new four-year
agreement that will keep NBC as the exclusive over-the-air
network of the league through the 2001-2002 season. Under
the terms of the new agreement, NBC will increase its
regular-season telecasts from 25 games to 32, with the seven
new games coming in early prime time on Sunday evenings.
NBC will also increase its playoff telecasts, from 23 to 31,
as well as continuing to broadcast the All-Star Game (NBC).
Turner Sports also reached a four-year agreement, renewing
its exclusive national cable rights to air the NBA on TNT
and TBS. The agreement increases Turner's regular season
telecasts from 70 to 80 games (Turner Sports).
DETAILS: The NBA "reaped a record windfall," as the TV
contracts total a guaranteed $2.64B -- with $1.75B coming
from NBC and $890M from Turner, according to Steve Zipay of
NEWSDAY. The deal "could approach" $3B by 2002 if NBC
"exceeds a specified sales level." Starting in January '99,
TBS' Wednesday night game will move to Monday nights, and
Turner will also add a Thanksgiving night game (NEWSDAY,
11/12). NBC Sports Exec VP Ken Schanzer said that the net
will be able to show "popular teams" a maximum of 11 times
during the season, up from eight this year (WASHINGTON POST,
11/12). NBC's playoff game increase will be "created by a
shift in scheduling that will move more games to the
weekend" (HOLLYWOOD REPORTER, 11/12). Each of the 29 NBA
teams "will earn about" $91M from the TV contract over the
next four years (David Moore, DALLAS MORNING NEWS, 11/12).
NBA Commissioner David Stern said that the salary cap, which
is based on the league's total revenue, "is likely to rise
about 20 percent during the first year of the TV contracts
... and significantly more over the balance of the four-year
deal" (Paul Farhi, WASHINGTON POST, 11/12).
AD RATES: The jump in rights fees "is likely to boost
rates charged to advertisers, with NBC warning of a 10%
annual increase ... once the new deal kicks in," according
to Pope & Fatsis of the WALL STREET JOURNAL. NBC currently
charges "about" $100,000 for a regular season 30-second spot
and "about" $400,000 for a 30-second spot during the NBA
Finals. NBC Sports President Dick Ebersol said that the
added games "will provide the network with as much as $300
million in new advertising revenue during the life of the
contract." Ebersol called the NBA a place advertisers "have
to be, particularly in the second quarter," when there is a
"dearth of sports programming" (WALL STREET JOURNAL, 11/12).
Ebersol: "Our key advertisers have told us they are willing
to pay those increases" (USA TODAY, 11/12). NBC Sports
VP/Sports Info. Ed Markey "confirmed that NBC will add two
additional commercial units to the conference finals and NBA
Finals." Marquee Group CEO Bob Gutkowski: "Exclusivity
means a lot. If an advertiser wants to buy the NBA on
broadcast television, they've got to go to NBC" (HOLLYWOOD
REPORTER, 11/12). Pilson Communications Chair Neal Pilson:
"Advertisers want their products associated with the NBA.
That's why the networks have no problem getting so much
money from advertisers" (PHILA. DAILY NEWS, 11/12).
REAX: Commissioner Stern: "This was the minimum amount
of money we needed to keep up with the revenue demands of
our teams and the players." 76ers President Pat Croce, on
Stern: "The man's amazing." Magic Senior Exec VP Pat
Williams: "The deal is staggering. It vaults the NBA to an
even more prestigious position. ... Who would have thought
that we'd be within spitting distance of the NFL in that
respect?" (PHILA. DAILY NEWS, 11/12). NBPA Exec Dir Billy
Hunter: "This was a good day for everyone." In DC, Paul
Farhi called the $2.64B "higher than some had predicted"
(WASHINGTON POST, 11/12). Grey Advertising's Jon Mandel,
citing the NBA's impact on NBC's O&O's: "While I don't think
NBC Sports can break even or make money, NBC as a
corporation might" (N.Y. TIMES, 11/12). Merrill Lynch & Co.
Analyst Jessica Reif Cohen: "Is it a good investment?
Strategically yes, financially probably no" (WALL STREET
JOURNAL, 11/12). CNBC's Sue Herrera: "NBC's ratings for the
NBA have run counter over other sports viewership problems.
The NBA is now firmly established as the number two TV
sport" ("The Edge," 11/11). Stern: "The interest was across
the board. But it was our view that the nod should go to
the people who brought us here" (N.Y. POST, 11/12).
