SBJ/June 4 - 10, 2007/This Weeks News

NBA near deal with TV partners

The NBA is close to wrapping up its negotiations with ABC/ESPN and Turner on a new eight-year media deal and could announce the new package during the NBA Finals or soon afterward, according to industry sources.

The deals are not completed, but multiple executives close to the talks confirmed that the partners have zeroed in on the framework of a comprehensive deal that has been in the works for the better part of a year. At eight years, the agreement would mark the longest television contract the NBA has ever signed.

The current deal with ESPN/ABC and Turner expires at the end of next season, spanning six years. The league’s previous two television deals with NBC were for four years.

The NBA’s talks with ESPN/ABC and Turner have remained cordial throughout, and no other network has emerged as a serious competitor to them. Turner has been an NBA media partner for two decades.

Specifics on the rights fee the league will receive are unclear, but sources said it will be higher than the current deal’s $765 million annual average. The likelihood that the new deal could bring in more money to the league would be significant in that it shows that the biggest leagues in the U.S. still are commanding higher rights fees. In the last couple of years, the NFL, MLB and NASCAR have worked out TV deals that pay them more money. Of course, these deals are not strictly TV deals anymore and include many digital media rights.

In addition, the new deal would mark a coup for the NBA, which has seen ratings level off recently. The length of the deal gives the league security while it continues to develop its own channel and make its content available on multiple platforms.

For ESPN/ABC and Turner, the deal guarantees multiple access points to branded sports programming that is one of the more consistent ratings performers in sports.

NBA Commissioner David Stern said negotiations are continuing, and that a new TV deal has not been signed yet.

“All I can say is that it remains our goal to try to have an agreement by the end of the Finals,” Stern said.

ESPN and Turner officials would not comment other than to say that the deal is not yet completed.

The NBA Finals begin on Thursday in San Antonio, with the last date of the Finals set for June 21 if the series goes seven games.

Specific contract details are scarce, but the new deals guarantee ABC/ESPN and Turner a bouquet of digital rights that will allow them to show game highlights via broadband, mobile and video-on-demand, sources confirmed. International rights also are included.

The TV partners also will gain rights to stream their network games on their Web sites and via video-on-demand soon after the games end. But streamed games will not be available live, and will be archived only for a limited time.

The biggest holdup appears to be over an additional package of digital rights that the NBA is making available that includes NBA.com and NBA TV. Turner executives were in NBA offices last week talking about that package, which would involve producing some aspect of those entities. One scenario being discussed has Turner increasing its involvement in the management, programming and operations of NBA TV, including sharing talent, infrastructure and distribution leverage. Already, Turner’s parent company, Time Warner, holds a small stake in NBA TV, and Turner operates a broadband channel, TNT Overtime, on NBA.com.

It is expected Turner will retain its exclusive NBA coverage on Thursday nights. As in the past, the package is believed to include WNBA games, as well. No details on the NBA Development League were available.

The amount of courtside signage inventory that will be given to the networks on national broadcasts — as opposed to going to the local teams — also wasn’t known.

The league would be left to negotiate its out-of-market package, NBA League Pass, which is up for renewal. The league has had talks with DirecTV and In Demand regarding that package.



HOLDING COURT
Looking at the NBA’s most recent television rights deals:
Year
Rights holder
Total rights fee
Avg. annual value
2002-2008 ABC/ESPN, Time Warner*
$2.4 billion
$400 million
2002-2008 TNT
$2.19 billion
$365 million
1998-2002 NBC, TNT/TBS
$2.64 billion
$660 million
1994-1998 NBC, TNT
$1.1 billion
$275 million

Source: SportsBusiness Journal archives
Note: The league has also had an agreement since 1994 with DirecTV and Dish Network for its NBA League Pass. The deals have been renewed several times although terms are unavailable.
* Time Warner owns a 2 percent stake in NBA TV

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