SBD/September 26, 2011/Media

Canceled NBA Season Would Cost TV Nets Big In Ad Sales Revenue

RSNs will have difficulty replacing NBA games if lockout continues into season
If the NBA does not play the '11-12 season, "national carriers ABC/ESPN and TNT will lose as much as $1.25 billion in ad sales revenue," according to Josh Chetwynd of DAILY VARIETY. Add in "regional sports nets, some of which struggle even harder than the national nets to find substitute product for the high-profile NBA, and there is no doubt a lot is at stake." But the "amount of damage that canceled games will have on the networks will differ greatly depending on their inventory of other programming options." TNT, for example, "was able to fill its NBA timeslots with films and other product that actually outperformed their expected NBA ratings." ESPN also has a "deep roster of sporting options and sports docs to cover any lost scheduling." But for RSNs "that rely on a single sport for many different times of year -- such as baseball in spring and basketball in the winter -- matters will be more difficult." Former CBS Sports President Neal Pilson said, "For the regionals, the impact is meaningful. ESPN can move advertising to college basketball and Turner can move some of the money to entertainment properties, but for RSNs that don't have hockey, for them, this would be serious." But "not everybody believes RSNs will take such a huge hit." Former Turners Sports President and YankeesNet CEO Harvey Schiller said RSNs "still are getting their subscriber fees, which are really the heart and soul" of their revenue. But he added, "The advertising revenue is typically equal to the cost of production, so without producing anything, their operating costs go down dramatically" (VARIETY.com, 9/24).
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