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SBD/November 22, 2011/Marketing and Sponsorship
NBA Lockout Watch, Day 145: Networks Are Poaching NBA Advertisers
Published November 22, 2011
LEAVING A TRAIL: In Portland, Joe Freeman wrote the ongoing labor dispute “has jeopardized the relationship” between the Trail Blazers and their sponsors. No sponsor “has pulled its funding from the team so far” during the lockout, but as the stalemate continues, the Trail Blazers and their sponsors "are feeling the pinch of lost games, lost exposure and the negative backlash that comes from the ongoing bickering.” The team has “taken creative steps to reward the sponsors, from adjusting payment plans to organizing community events.” A “variety of local sponsors have pledged continued support for the team, despite the ongoing labor strife, and insist their partnership is safe.” As lost games mount, sponsors are “being given options for dispersing payments for services they are not getting.” One option is “to accept increased advertising during a condensed period -- say from a normal six-month span to a four-month span -- should a shortened season unfold.” Another option is to “simply defer contributions and roll them over to next year.” Most sponsors are "lingering in a kind of a holding pattern, waiting to see how -- and if -- the lockout ends” (Portland OREGONIAN, 11/21).
PAYBACK TIME? MULTICHANNEL NEWS’ Mike Reynolds notes enough games have been cancelled so far "to raise the prospect of paybacks to multichannel distributors for license fees that include NBA rights.” Programmers and distributors said that each contract with the league “has its own specific language and terms.” But the loss of 20 games “seems to be a trigger point for a number of the regional sports networks that present NBA games to rebate some of their license fees back to distributors.” The disbursement “fallout evidently won’t come soon, though, or necessarily in cash.” A programming exec said that although the NBA is shut down through at least mid-December, reimbursement “can’t come until the dates of the original schedule actually pass.” Another exec said that “those tallies probably wouldn’t occur until an abbreviated campaign is scheduled or the entire 2011-12 season is officially blotted out” (MULTICHANNEL.com, 11/21). In N.Y., Matthew Flamm notes MSG Network at some point, depending on its contract provisions, “will need to start coughing up affiliate-fee revenues.” It is “already losing out on advertising dollars,” as new shows “culled from MSG's archives, like ‘Knicks Greatest Rivalries,’ won't have the appeal of a live game, nor will hockey, no matter how well” the NHL Rangers are playing. Stifel Nicolaus analyst Benjamin Mogil in a research report in August estimated that a lost NBA season “would cost MSG around $100 million in earnings before interest and taxes, about half from ticket sales and the rest from advertising and affiliate-fee refunds” (CRAIN’s NEW YORK, 11/21 issue).