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SBJ/June 2-8, 2014/Media
NBA’s talks with ESPN and Turner move forward
League looking to make deal in hot rights market
Published June 2, 2014, Page 1
Sources with both ESPN and Turner say they have no plans to open that exclusive window earlier. An earlier start, of course, would mean the exclusive negotiating period also would end earlier, thereby opening the door sooner for Fox, NBC and others to bid for a package.
That doesn’t mean the NBA’s TV negotiations have stalled. Rather, in recent weeks the league has stepped up conversations with both ESPN and Turner about renewing their deals before getting to the exclusive window.
The NBA’s interest in cutting a deal early is to profit from the current frothy market for sports rights.
In the past month alone, the International Olympic Committee and Major League Soccer have signed significant rights deals. MLS’s deal with ESPN, Fox and Univision, in particular, represented a huge increase for the league in its average annual rights fee received.
By cutting a deal early, the NBA also would avoid selling its rights at the same time the NFL plans to sell a Thursday night package of games. That NFL package is expected to draw a lot of interest. Earlier this year, the NFL signed a one-year deal with CBS with an NFL option for a second year. There’s some fear that a new NFL deal could take money out of the market.
ESPN and Turner’s interest in cutting a deal early additionally aims to avoid a bidding war with competitors like Fox and NBC. The league’s TV ratings, combined with its attractive young demographic, make it a hot TV property.
ESPN and Turner have two years remaining on their eight-year, $7.5 billion deal, which expires at the end of the league’s 2015-16 season. League and network sources expect the new deal to at least double its average annual rights fee. Even though digital rights are expected to be a big part of the discussions, the deal price is being driven by the reach from traditional television, sources said.
Over the past four months, the league’s two internal media committees — one featuring owners, the other with team CEOs — have met regularly to discuss how they want to approach these negotiations while focusing on myriad issues related to a new deal.
It is likely the NBA’s new deal will include a wider array of digital rights. Under the leadership of former Commissioner David Stern, the NBA considered itself an early adopter, embracing cable television before other leagues and creating its own TV channel.
The committees also have looked into a push by the networks for increased flexible scheduling to create better matchups later in the season, a move they say will boost viewership.
Conversations between the league and its network partners were slightly delayed by the Donald Sterling saga, but the Clippers sale is not expected to have even a short-term impact on the TV talks.
Bill Koenig, NBA president of global media distribution, leads the negotiations with ESPN and Turner executives.