LeBron James is the rare athlete who can affect the business fortunes of an entire television channel.
The future NBA hall of famer’s move from Cleveland to Los Angeles could result in a doubling of advertising revenue for Lakers games on Spectrum SportsNet, the regional sports network half-owned by the team.
Last season, Spectrum SportsNet charged around $7,000 per 30-second spot for a young team that was 12 games under .500 and didn’t make the playoffs.
This season, sources expect that advertising rate to climb to $14,000 per 30-second spot — a price that could climb much higher if the Lakers’ ratings beat the already optimistic projections.
The reason why RSN executives are so bullish on the television performance for this year’s Lakers is because James already has provided a blueprint for them. James’ teams have proved to be ratings gold in both Cleveland and Miami.
It’s hard to think of another single athlete from a team sport who has had such an effect on an entire television channel’s performance.
Take 2010, for example, when James left Cleveland to take his talents to South Beach.
In 2009-10, when James led the Cavaliers, the Heat’s ratings on Miami’s RSN, Sun Sports, averaged a measly 2.51. The next season, when James joined the team, Heat ratings jumped to a 4.92 — a 96 percent increase. Two seasons later, in 2012-13, Heat ratings had climbed to a 7.14, a rating that was nearly three times higher than Heat ratings before James.
It was the same story when James returned to Cleveland in 2014-15, when television ratings tripled for the hometown hero’s return to the market. During James’ final season in Miami, 2013-14, Cavs games on FS Ohio averaged a paltry 2.79 rating. The following season, that jumped to 7.94, and during the Cavs’ championship season, it reached a 9.31 rating.
In the season following both moves, sources said advertising revenue doubled.
Conversely, the markets James left saw their local NBA ratings tank. The season after he left Cleveland for Miami, ratings for Cavaliers games on FS Ohio dropped 54 percent. The season after James left Miami to return to Cleveland, Heat ratings on Sun Sports dropped 28 percent. Last season, Heat games averaged a 2.74 rating — a 60 percent drop from James’ last season in Miami.
With such ratings drops, these RSNs obviously see an advertising revenue drop post-James. Even though they pulled half the rating after James left, the RSNs did not see their advertising revenue cut in half. One source described “a halo effect” that existed around these teams for a season or two after James left.
Two areas that James will not affect are rights fees and distribution.
When Spectrum SportsNet launched in 2012, it signed distribution deals that lasted eight to 10 years — a much longer contract than normal, sources said. Most of those will not be renegotiated until early next decade, at the end of James’ planned four-year run in Los Angeles.
Sources say the RSN will renew its Verizon deal before the 2019-20 season and its AT&T U-verse deal is believed to be up soon thereafter. But the bulk of the RSN’s distribution deals run through 2022, sources said. James’ deal with the Lakers runs through the 2021-22 season.
Distributors pay Spectrum SportsNet $4.57 per subscriber per month, according to SNL Kagan, a rate that is higher than two other Los Angeles-based RSNs — Fox Sports West and Prime Ticket.
Spectrum SportsNet holds the Lakers’ local TV rights through the 2033 season. The channel is jointly owned by Charter and the Lakers.