Tag: NBA television

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NBA’s television partners scramble to fill slots, appease advertisers

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Great, more “CSI: New York.”

Among the many left scrambling without the NBA are television networks that normally would be beaming regular season games into our homes. They have to fill the space and they have to try and keep the advertisers who buy that space happy. National networks like TNT are forced to bring us more how-done-it crime dramas and offer advertisers other options, and regional sports networks are digging into their vaults for historic games.

In the end this will be about the money, eventually the league and teams are going to have to pay some people back. But right now it’s about filling the airtime. Everything is explained well in a New York Times story today.

Big media companies are likely to feel the chill, with months of empty television time that would typically be filled with N.B.A. games. ESPN and ABC, owned by the Walt Disney Company, and Time Warner’s Turner Sports pay a combined $1 billion a season for the rights to games. The N.B.A. drives ratings in the coveted 18- to 34-year-old male demographic that advertisers pay a premium to reach. And it gives cable networks leverage in negotiating carriage fees, or the price cable companies pay in order to offer subscribers a network.

The N.B.A. said on Tuesday that at the end of the current season it would discuss repayment to networks for fees associated with canceled games. If the entire season is wiped out, the league could add an additional year to Turner and Disney’s contract, which runs through the 2016 season….

The lockout could have a disproportionate impact on regional sports networks that rely on a hometown team’s games to bring in viewers and local advertisers. The MSG network, owned by the Madison Square Garden Company, typically has Knicks games three nights a week. It will now rely on shows that mix archival Knicks games with player interviews. MSG will still have live National Hockey League games.

TNT is giving us more “CSI: New York” right now. If they start having to give us a lot more “Leverage” that’s when we will all feel the pain.

Celtics near major broadcast rights deal with Comcast New England

Miami Heat v Boston Celtics

Just months after the Los Angeles Lakers brokered a deal that will pay the franchise handsomely to be the anchor of a new regional sports network in that city, the Boston Celtics are near their own blockbuster deal.

The Celtics and Comcast Sports Net New England (CSNNE) are close to a 20-year extension of their deal, one which would give the Celtics part ownership of the regional network, reports the Sports Business Journal.

The Boston Celtics, one of the NBA’s storied franchises, are finalizing a lucrative media rights package with Comcast SportsNet New England that will extend their current deal by 20 years with a big jump in its annual rights fee, as well as give the team a stake in the network.

Multiple sources said that the Celtics and Comcast are close to a long-term media rights deal despite the NBA lockout that has thrown the league into economic uncertainty….

The proposed deal, which could be finalized in the next few weeks, would extend the Celtics’ media deal to 2038 from the current agreement that runs through 2017. In addition, the team would take up to a 20 percent equity stake in the regional sports network (RSN) and receive a healthy increase in its annual rights fee. The Celtics currently get between $15 million and $20 million annually, which is considered below market for such a strong franchise.

You can be sure that the players union is taking note of this as the discussions of a new labor deal move very slowly forward. One of the union’s arguments is that the owners need to do a better job sharing revenue to help lift up the franchises not making money (currently none of the local broadcast rights fees are shared).

In addition, this is why the players have fought to keep their take as a percentage of league revenues (the old deal had it at 57 percent of the gross, the players have offered to drop to 54 percent but the owners want much more steep cuts and to move away from a guaranteed percentage). Both local and national broadcast rights for the NBA are expected to increase in the coming decade and the players want to make sure that they get a portion of that revenue.

NBA expects big television revenue jump, which complicates lockout

NBA Finals TV Team Basketball

Nothing runs professional sports in the United States like television and television money. And it’s right in the middle of the NBA lockout.

That starts with the current television deal, set to pay the league $930 million next season (assuming there is a next season). We told you before about how the NBA’s television networks — TNT, ESPN/ABC — are set to lose $1.25 billion in revenue if there are no games.

Over at Hoopspeak, Ethan Sherwood Strauss explains how the NBA has missed the boat on its national television deal (first signed in 2007).

Ad Week reports that ESPN/ABC and TNT would miss out on up to 1.25 billion dollars from a year with no basketball ad money. If the 2011-2012 season actually happens, those channels would collectively pay 930 million dollars for that 1.25 billion return in broadcast revenue, a potential 320 million-dollar gap between what the NBA sells TV content for and what broadcasters make off of it. This is a quite a steal for the TV side considering that broadcasters often overpay for the privilege of attaching themselves to sports. For perspective, networks give the NFL 4 billion dollars in return for 3 billion in ad money. My suspicion is that pro basketball could easily make up the 300 million they claim to be losing–if only the league had a mulligan on TV rights negotiations.

They don’t get to redo those rights until 2016, although the current partners may be willing to do an earlier renegotiation to keep the rights without opening up the bidding.

But when they do, the NBA will see a big jump in revenue, according to Forbes.

The buzz in broadcasting circles is that the National Basketball Association’s terrific television ratings and greater competition for sports programming are going to result in at least a $3 billion increase in the league’s next deal (30 percent more a year than the current deal)…

While buzz sometimes nothing more than just buzz, in this case a 30% increase might be too conservative. The Los Angeles Lakers reportedly inked a new cable deal in February that will pay the team an average of $150 million a year, five times their current fee. Almost immediately after Peter Guber and Joe Lacob bought the Golden State Warriors last summer the team inked a new cable deal with Comcast. Although the figure has not been reported, I have been told the deal paid the new owners between $40 million to $50 million upfront, plus a more than 100% increase in the annual rights fee. Heck, even the National Hockey League just got a new deal with Comcast that will pay the league 170% more than its current agreement.

What Forbes is writing about both the owners and players realize — the league had the best ratings it had seen in a decade last year and they will be getting more television money in the future. Which brings us to the current Collective Bargaining Agreement negotiations and lockout.

The last offer from the owners wanted to cap annual player salaries at $2 billion (they made $2.17 billion this past season) for a decade. Meaning that player salaries would remain flat an all of the money from the increased television rights deal would go into the owners pockets.

The players currently get 57 percent of the gross Basketball Related Income that comes into the league, a figure that includes the national television revenue. While the players have offered to lower their share down to 54 percent, they want it to remain a percentage because they want to share in the increased television revenue when it comes.

And that is part of the standoff. There will be more revenue for the league in future seasons, but who gets the lions share of it has to be hammered out.

If back in 2007 the league had not signed such a long television deal, one that had more flexibility, we might not be dealing with the threat of such a protracted lockout.