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SBJ/April 28-May 4/Media
NBA’s TV partners want flex scheduling
Published April 28, 2014, Page 1
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Media writer John Ourand and NBA reporter John Lombardo discuss what the league's TV partners want and the difficulty of incorporating a more flexible NBA schedule.
But both teams were busts on the floor and, as follows, proved to be ratings duds. Bryant missed most of the season with a leg injury, and Anthony’s Knicks drew spring headlines only for their front-office overhaul; neither club made the playoffs. In the run-up to the postseason, though, ABC was stuck with a Lakers-Clippers game — a blowout win for the Clippers that posted viewership numbers 18 percent below ABC’s season average.
As the networks start negotiations with the league on a new TV deal, ESPN and Turner want more assurances they won’t be locked into bad matchups like that at the end of the season. Network executives have made it known to the league they want the same type of flex scheduling the NFL uses for NBC’s “Sunday Night Football” to ensure that a Bryant-less Lakers don’t have an exclusive national TV audience on a Thursday night or a Sunday afternoon.
But while the networks would like greater flexibility to swap out those less-than-desired matchups and adjust game times to suit national telecasts, sources close to management say the league’s owners are wary about such a move.
Unlike the NFL, where national TV revenue drives the financials, local TV deals are critical in the NBA, and sources say NBA team owners are firm in their resolve to preserve that lucrative revenue; they believe flex scheduling could threaten it.
League officials declined to comment.
At present, ESPN and TNT can take a total of 12 games per team for exclusive telecasts, leaving RSNs to produce between 70 and 82 games per club, depending on how good or appealing a team is. Team owners, many of whom hold stakes in these RSNs, are not looking to upset that relationship. That’s the case even though the national networks may be prepared to pay a huge premium for the league’s national TV rights with their new deals.
Protecting these local RSN deals, which have seen their own values escalate dramatically since the NBA’s last national broadcast deal was signed six years ago, is one of the priorities of both of the league’s media committees — one made up of owners, the other made up of top team executives.
It’s unclear exactly how much revenue a local TV deal represents for a club, and the value of those deals fluctuates wildly depending on market. The Lakers, for example, have a 25-year, $5 billion deal with Time Warner Cable for its local TV rights, resulting in a massive $200 million per year.
That’s something the owners want to protect.
Nothing is set in stone. The NBA has not started any kind of formal negotiations with either network yet, but this flex scheduling issue has already been flagged as a potential sticking point in the forthcoming talks.
“The national rights [fee] is going to be a big number, and the networks are going to try to grab as much as they possibly can,” said a source. “But teams have to protect the local markets because there is a lot of money there, too.”
The NBA allows for some limited flex scheduling, but the process is so cumbersome that ESPN has flexed out of only one Sunday afternoon game on ABC over the past several seasons. On the last Sunday of this season, it carried Oklahoma City-Indiana instead of Chicago-New York, a decision it had to make a month-and-a-half beforehand.
ESPN has a bit more flexibility on other nights when it carries games alongside RSNs, but even those flex decisions are rare.
Turner and ESPN/ABC have two years remaining on their eight-year, $7.5 billion deal, which expires at the end of the 2015-16 season. An exclusive negotiating window between the NBA and its current partners does not open until next year, but talks are expected to start this summer.
With the majority of national sports rights locked in, significant focus is being put on the NBA’s talks. The league’s new deal could double in value from the current pact given the value of the deals signed recently by other major sports properties. For that kind of money, networks are certain to demand more assets and control, including the flexibility to move game times around to suit their television schedules.