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TELEVISION RIGHTS FEES: NBA
BEGIN YR.END YR.TOTAL COST
(IN $M)AVG. COST/
YEAR (IN $M)ABC/ESPN'02-'08$ 2,400$ 400TNT'02-'08$ 2,000$ 366NBC'98-'02$ 1,616$ 404TBS/TNT'98-'02$ 840$ 210NBC'94-'98$ 750$ 187.5TBS/TNT'94-'98$ 352$ 87.5NBC'90-'94$ 600$ 150TNT'90-'94$ 275$ 68.75TBS/TNT'88-'90$ 50$ 25CBS'86-'90$ 188$ 47
TV MONITOR: Last night's 10:30pm ET 30-minute edition of FSN's "National Sports Report" led with 76ers-Wizards, followed by Suns-Bucks. The first non-NBA report was a brawl during the Mike Tyson-Lennox Lewis press conference. Last night's 11:00pm ET 60-minute edition of ESPN's "SportsCenter" led with Nuggets-Lakers, followed by 76ers-Wizards. The first non-NBA report was the Tyson-Lewis press conference. See THE DAILY INSIDER's TV Monitor for a complete listing from last night's shows (THE DAILY).
ON THE AIR: Keith Olbermann tonight will guest host CNN's "The Point" at 8:30pm ET, and will premiere his series of essays for "NewsNight With Aaron Brown" at 10:00pm ET. Broadcasters Joe and Duke Castiglione will be on CNBC's "Power Lunch." Redskins WR Michael Westbrook will be on the "Best Damn Sports Show Period." Wizards F Kwame Brown and Bulls F Eddy Curry will be on "The Last Word" discussing going directly from high school to the NBA. NHL Panthers coach Mike Keenan will be on ESPN's "Unscripted."
Have a submission for On The Air? Contact Schuyler Baehman: firstname.lastname@example.org.
ESPN's Peter Gammons will provide weekly reports for WEEI-AM radio in Boston beginning March 21 and running through MLB's regular season (WEEI)....Phoenix Open Media Dir Jeff Blaugrand said that national interest in the event is "up significantly this year and attributed it mainly" to 17-year-old Ty Tryon, who is making his pro debut. For the "first time ever," AP golf writer Doug Ferguson will cover the event. In addition, SI will have two writers at the event, and "other publications that have never, or rarely, covered the event inlcude" the Orlando Sentinel, Chicago Tribune, Philadelphia Inquirer, Baltimore Sun and S.F. Chronicle (AZ REPUBLIC, 1/22).... ESPN's Tony Kornheiser, on SI's management shake-up: "If they blow-up Sports Illustrated, it's New Coke. They're going down with it." ESPN's Michael Wilbon: "You can't alienate the reader, though. Maybe you tinker a little bit. They can't go New Coke" ("PTI," 1/22)....In Charlotte, Scott Fowler profiles Univ. of Louisville men's basketball coach Rick Pitino and writes that Pitino "knows coaches' TV shows are inherently boring, so he jazzed his up in Louisville. One recently featured a woman who swallowed fire. Another had a magician, a nun, a football player" (CHAR. OBSERVER, 1/23).
The NBA announced yesterday that it has reached six-year agreements with ABC/ESPN and AOL Time Warner to have ABC, ESPN, TNT and a new national cable sports network to be jointly-owned by AOL Time Warner and the NBA televise NBA games beginning in the '02-03 season. Also under the deal, AOL becomes the league's preferred interactive services provider. TNT will televise 52 regular season games in primetime, 48 of which will be part of Thursday-night doubleheaders. ESPN will air 75 regular season games on Wednesday and Friday nights, and ABC will air 15, predominantly on Sunday afternoons, beginning with a Christmas Day doubleheader. That compares to Turner showing 80 and NBC 33 regular-season games in the current contract. TNT will air the Thursday-night doubleheaders, as well as two opening night games, on an exclusive basis, with no other NBA games being shown in any market on those nights. TNT will also air the NBA All-Star Game. ABC will air the NBA Finals in primetime, and ESPN and TNT will exclusively televise one Conference Finals series each. ESPN also gets the NBA Draft, which has been carried by TNT. The NBA wants to expand its first-round playoff series from best-of-five to best-of-seven, but that would require approval of the NBPA (THE DAILY). NEWSDAY's Steve Zipay notes NBA owners voted 25-4 to approve the deal last week (NEWSDAY, 1/23).
THE NUMBERS: BLOOMBERG NEWS' Scott Soshnick reported ABC/ESPN and Turner will pay a combined $4.6B over the six-years for the rights. NBA Commissioner David Stern said that the $765M annual average "eclipses what the NBA was getting from its expiring agreements" with Turner and NBC by about $150M. ABC/ESPN paid about $2.4B for its part of the deal, while Turner paid about $2.2B. Soshnick noted it is the "smallest increase in NBA TV rights fees since 1983. Since then, the league has more than doubled its rights fees each time" (BLOOMBERG NEWS, 1/22). In DC, Eric Fisher calls the 25% rights fee increase a "surprising feat given the marked weakness of the U.S. economy. But to do that, more than twice as many regular season games will be aired in this new deal and almost all the games will air on cable" (WASHINGTON TIMES, 1/23). Stern: "This is a very substantial increase in a turbulent marketplace. It's relatively easy to go from $100[M] to $200[M]. But you begin to slow down on your rate of increase as your numbers get higher" (CHICAGO TRIBUNE, 1/23).
ESPN: The WALL STREET JOURNAL's Flint & Fatsis write, "The key to the deal was ESPN," as the cable net is "assuming the brunt of the costs" of Disney's $400M per year share. ESPN President George Bodenheimer, noting his company's multi-media properties: "In the old days, you made a calculation of ad revenue against your games. The model going forward cuts across six different TV networks, radio and Internet" (WALL STREET JOURNAL, 1/23). Stern: "NBC is the successful over-the-air network depending on ad sales. Disney and AOL ... have focused on both the Internet work and cable, so they have a broader array of assets." Bodenheimer added, "Any league that is not willing to sell rights where you can exploit all of a company's assets is in for a tough time" (USA TODAY, 1/23). In Houston, David Barron reports ESPN2 will launch "NBA Night in America," a Tuesday show that will feature "live cut-ins to NBA games," and ESPN Classic will "obtain the rights to air vintage NBA games." The company "also extended agreements with ESPN.com, ESPN Radio and SportsTicker." ABC Family will air "Inside Stuff" (HOUSTON CHRONICLE, 1/23). ESPN Senior VP & GM for Programming Mark Shapiro said that the net may schedule games on New Year's Day, "competing against ABC's college football [BCS] and cablecast after ESPN's Outback Bowl game." MULTICHANNEL NEWS' Simon Applebaum reports ESPN's package includes "both video-on-demand rights for NBA-game time-shifting and Spanish-language rights, the latter suggesting that some ESPN games may run on its Deportes package." Bodenheimer said that there would be "no surcharge for operators to help underwrite the costs" of the deal (MULTICHANNEL NEWS, 1/23).
TURNER: CABLEWORLD's Staci Kramer wrote that under the new deal, Turner's TV package is "sweetened," as TNT gets the All-Star Game and one conference final series. Turner Sports President Mark Lazarus said the terms are "more akin to the benefits that the broadcast package has typically enjoyed" (CABLEWORLD, 1/22). Lazarus said the new jointly-owned cable net, the working title for which is All Sports Network (ASN), will "be a full and diverse sports network with NBA programming as a foundation, but not by any means the sole programming genre." Stern added the net will be distributed on AOL Time Warner's 13 million subscriber Time Warner cable system (DAILY VARIETY, 1/23). USA TODAY's Rudy Martzke writes, "With NBA owners involved with Cablevision (Knicks), Charter Communications (Trail Blazers) and Comcast (76ers) that encompass 35 million homes, the NBA figures to produce another 10 million homes" (USA TODAY, 1/23). MULTICHANNEL NEWS' Applebaum: "It's not clear whether [ASN] will replace either CNN/SI, ... or NBA.com TV." But Lazarus said the NBA "will take the lead on distribution" of the service (MULTI. NEWS, 1/23). In N.Y., Richard Sandomir writes the "principle difference between the ESPN and TNT deals is that ESPN's regular-season games will have to compete against local broadcasts," and TNT's will be shown exclusively. Lazarus: "Exclusivity gives us a story we can tell our advertisers about." Sandomir adds AOL will pay $290M next year, with 3% annual increases for the remaining five years. It will pay another $20M annually for the Internet rights, "with similar increases." The "remainder of AOL Time Warner's commitment will be from its share of profits, split with the NBA, from [ASN]" (N.Y. TIMES, 1/23). Lazarus, on the NBA having two cable partners: "I don't think it dilutes. I think it plays more into what consumers' viewing habits are. They watch what they can and they catch what they can" (CBS MARKETWATCH, 1/23).
THE WEB PORTION: INTERNETNEWS.com's Christopher Saunders reported that under the part of the deal that makes AOL the official ISP of the league, subscribers to AOL "will be able to access free, streaming Web audio feeds from some NBA games." The number of games included was not disclosed. In addition, the two-year-old online content-sharing and promotional deal between AOL and the NBA "will be renewed one-year early" (INTERNETNEWS.com, 1/22).
STERN LIKES SHIFT TO CABLE: Stern said of the move to cable, "We're just following the trend, not setting it here. There's tens of thousands of hours of sports programming that are appearing on cable. So if you don't enhance your presence or don't have the capacity by playing only once a week to gather enormous numbers of people, then you are going to be in trouble" (HOLLYWOOD REPORTER, 1/23). More Stern: "We'll have a more concentrated audience and a higher rating. The reality is there's been an extraordinary shift of viewership to cable television" (WASHINGTON POST, 1/23). Stern added, "This is all a fundamental shift that's occurred in our industry. We're now positioned to take full advantage" (WASHINGTON TIMES, 1/23). Stern, on the deal's negotiations: "It was a legal Olympics. All of this may have ruined a holiday, but we are very pleased. From a business context we have shown a 25% increase, we have obtained a 50% interest in a new network, and we are now involved with the two largest integrated companies in the world" (L.A. TIMES, 1/23). Stern: "This represents a fundamental change in our philosophy. There is no such thing as oversaturation. I used to believe it was important to aggregate viewing on a few stations. But if they're not watching us, they're watching someone or something else like ESPN1, ESPN2, Outdoor Life, The Golf Channel. We decided it was time to join the dance more aggressively, and we knew we had to have a number of different agreements, across several different divisions of the networks, to obtain the amount of increases that we were able to" (SACRAMENTO BEE, 1/23).NBA Follows The Money To Cable
WHAT THE ANALYSTS ARE SAYING: The Hollywood Reporter Editor Howard Burns: "I think the league has to be considered a winner because if you're able to get a 25% rights increase in an economy of this sort, I think you have to give the league credit for being able to do that." But Burns added, "I think the one thing that the league needs to watch out for is oversaturation. With this new contract you're going to have some 240 regular games on the air. That's before the playoffs" ("Market Wrap," CNBC, 1/22). Salomon Smith Barney analyst Jill Krutick: "We think this deal strengthens AOL Time Warner's (AOL) service as the place for online sports content while reaffirming Disney's ABC Sports and ESPN as leaders in sports programming through 2008" (HOLLYWOOD REPORTER, 1/23). Pilson Communications President Neal Pilson: "The startling development is that for the first time the cable industry has outbid a broadcast network for a premier sports package" (BLOOMBERG NEWS, 1/22). In Toronto, William Houston calls the 25% rights fee increase "clearly a triumph for the NBA, considering its regular-season ratings on NBC dropped" 35% from '97-98 to '00-01 (GLOBE & MAIL, 1/23). Pilson: "The NBA had to follow the money" (ATLANTA CONSTITUTION, 1/23). In Boston, Bill Griffith writes the deals "could be the most complicated deal in television sports history." But it "also means a milestone for ESPN," as the net is now a rights-holder to "all four major American sports simultaneously." Meanwhile, ASN "could face a rocky road," as it will "likely end up on a digital tier (triple-figure channel) and thus require upgraded cable service instead of landing on a traditional analog (double-figure) spot" (BOSTON GLOBE, 1/23). In Sacramento, Breton & Howard-Cooper write that with the deal, ESPN "became the most powerful force in sports broadcasting" (SACRAMENTO BEE, 1/23).
NBC'S RESPONSE: NBC Sports Chair Dick Ebersol, whose network has been an NBA partner since '90-91, said in a statement, "The definition of winning has become distorted. If winning the rights to a property brings with it hundreds of millions of dollars in losses, what have you won? When faced with the prospect of heavy financial losses, we have consistently walked away and have done so again. ... We wish the NBA all the best. We have really enjoyed working with them for more than a decade to build the NBA brand" (NBC).
Fox Sports NFL announcer Pat Summerall announced yesterday that his 21-year partnership with analyst John Madden will end after Super Bowl XXXVI, but in N.Y., Richard Sandomir writes Summerall "insisted that he was not retiring, and that he might continue to work" for Fox. Sandomir notes the "top candidate to replace" Summerall is Joe Buck. Summerall said that he "would like to call tennis or golf again," and added that he would "still consider calling football" for Fox, "specifically if his partner" was Troy Aikman. But Summerall said, "Troy's next step is up, and I can't see working with me as a step up for Troy" (N.Y. TIMES, 1/23). Summerall's agent Sandy Montag said that there are "plans to talk" with Fox Sports execs in February or March (NEWSDAY, 1/23). Summerall said that he "has already spoken" with PGA Tour Commissioner Tim Finchem about covering golf (WASHINGTON POST, 1/23). Meanwhile, when asked if Summerall had talked to CBS Sports execs, Montag said, "Pat's still under contract (to Fox)" (N.Y. DAILY NEWS, 1/23). Summerall: "If there hadn't been talk about Fox possibly breaking up John and me, I wouldn't be looking to move on. ... This is totally my move. But I'm not saying that they are not glad that I decided to do it" (DALLAS MORNING NEWS, 1/23).
ALL ABOUT DEMOS? Summerall said that his health "was not a factor" in his decision (MILWAUKEE J-S, 1/23). Summerall added that he "is not convinced his age  has been a detriment to his survival in this business." Summerall: "Certainly, Fox is directed at the younger fan; all networks are trying to attract younger audiences. But look at Chick Hearn and Keith Jackson and Ernie Harwell. People like to go back to the times when their families connected. As long as a guy doesn't lose his enthusiasm for staying on, I'm not sure age is a factor in any endeavor. Not as long as you have a joy for life" (L.A. DAILY NEWS, 1/23). ESPN's Tony Kornheiser, on Summerall's move: "What it means to me, if the hand of Fox is behind this, it's that terrible phrase, 'We want to skew younger'" ("PTI," 1/22). Summerall, on the upcoming Super Bowl broadcast, "Someone once said I cry at Wal-Mart openings. So I guess you can say I might get a little emotional" (L.A. TIMES, 1/23).
BIGGER BUCKS? ABC Radio's Keith Olbermann cites sources as saying that Buck will receive a raise to $3M per year (ABC Radio, 1/23).
A "precedent-setting" HBO-Showtime PPV heavyweight title bout featuring Mike Tyson and Lennox Lewis "might be in jeopardy after a melee broke out" at a Tyson-Lewis news conference yesterday in N.Y. to announce the bout, according to Jim McConville of the HOLLYWOOD REPORTER. HBO and Showtime execs "could not be reached for comment after repeated calls." If the PPV bout takes place, HBO and Showtime said that they "will use a neutral announcing team," as Tyson is under contract with Showtime and Lewis is with HBO. The "pay network with the winning fighter will get to re-air the fight likely the following week and will pay the losing network an estimated" $3M (HOLLYWOOD REPORTER, 1/23). In N.Y., Bob Raissman, noting Tyson instigated the ruckus, writes, "What is truly unbelievable is how Showtime brass can continue to be [Tyson's] prime financial backer while swallowing Tyson's garbage. Showtime suits control the purse strings. ... Are the honchos so convinced about the financial upside their relationship with Tyson has that they tolerate the kind of behavior he exhibited yesterday?" (N.Y. DAILY NEWS, 1/23).