An Early Look at NBA TV Rights: Will Anybody Challenge ESPN?

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http://www.sportsmediawatch.com/2013...hallenge-espn/

After a busy few years of sports TV rights negotiations, only one major league is still available — the NBA.

The current NBA television deals with ESPN and Turner Sports do not expire until after the 2015-16 season, but the league looms large as the highest-profile property left for bid. Over the past two years, television rights to nearly everything else — the NFL, Olympics, World Cup, Major League Baseball, NHL, NCAA Tournament and college football playoff — have been locked up through the twenties.

Of the remaining properties, which include the second half of the NASCAR season and the Big East/Catholic 7, only the NBA has the ability to fundamentally change the sports TV landscape.

That was not the case in the mid-2000s, the last time NBA TV rights became available. The league was floundering in television ratings and public perception, and there was little demand among the networks to set aside a few hundred million for TV rights. Incumbents ESPN and Turner Sports, essentially running unopposed, were able to hold onto the rights an additional eight years.

Today, the NBA is in the midst of a five-year resurgence. Television ratings have broken records on cable in both the regular season and playoffs. On broadcast, where the league failed for years on ABC, ratings have soared back to NBC levels. The last three NBA Finals have averaged a double-digit rating, and four out of the last five NBA Finals have outdrawn the World Series in the same year.

The league’s improved fortunes are not the biggest change from the mid-2000s. Today, FOX and NBC — which were not even in the conversation when NBA rights were last up for bid — are likely to express perhaps serious interest in acquiring rights. With FOX set to launch two 24-hour sports networks this summer and NBC in desperate need of content for NBC Sports Network, the NBA’s hundreds of hours of game inventory are tantalizing.

As predicted by Sports Business Journal‘s John Ourand last year, the NBA could also look toward an unconventional outlet such as Google’s YouTube for a game package. That may sound outlandish, but the NBA has never shied away from taking risks — shifting almost entirely to cable in 2002 was proof of that — and the league already has a deal with YouTube through its Developmental League.

More than three years before the next NBA TV deal goes into effect, here is an early look at the contenders: Fox Sports, NBC, ESPN, Turner, CBS, and Google.

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http://www.awfulannouncing.com/2013/...hts-deals.html

In this week's edition of Sports Business Journal, John Ourand and John Lombardo report that the NBA wants to begin talks this summer with its two TV partners, ESPN and Turner Sports about new deals. Now the two deals with the incumbents expire after the 2015-16 season, but the NBA wants to strike while the iron is still hot. Knowing that Major League Baseball, the NFL and most of the major BCS college conferences saw huge rights deals over the last few years, the NBA wants to join in before the rights bubble bursts.

In addition, with an increased field of national cable sports networks, the NBA knows there will be more interested parties in its games than when the last TV contract was signed in 2007. ESPN has been with the NBA since 2002 and Turner's partnership dates back to the mid-1980's when the NBA was originally on TBS.

With the talks beginning this summer, the NBA hopes to have a new contract in place by the time current NBA Commissioner David Stern transitions to new Head Honcho Adam Silver next summer.

Like the NFL, the NBA saw record ratings in 2011-12, but a slight decrease in the 2012-13 season. That will not temper the enthusiasm of the bids for the NBA. As he leaves, Stern is hoping to at least double the $930 million in rights fees the league receives from ESPN and Turner. And you know neither company will allow one of their signature sports properties go without a fight.

So with that, let's handicap the new rights deal and see where the chips may fall.

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http://www.awfulannouncing.com/2013/...ion-talks.html

Does Turner or ESPN/ABC Have A Chance Of Not Retaining A Package?

If conditions lined up where there was a perfect storm of circumstances against either company, hypothetically you could see one of these networks being displaced. Unfortunately there is no perfect storm brewing.

The NHL rights are locked up for almost a decade, making it a non-existent fallback option if either Turner or ESPN/ABC found the NBA's asking price too rich. MLB, NFL, and almost all major conferences are also off the table. Essentially if you lose the NBA, there is little to fill the void.

The economy is good and both companies are free and clear from any major strategic issues like a pending merger or corporate spinoff.

ESPN is still largely unopposed with the mainstream outside of NHL fans still not aware of NBCSN, what channel number it is, and if they get it. Although it's big news in this space, the average fan may not be aware fo the existence of Fox Sports 1 just yet.

Turner's coverage is preferred by most NBA fans and Turner also runs NBA.com and handles production of NBA TV. Turner's Atlanta HQ is where both operations are housed.

Although it's fun to think of some way where the NBA leaves ESPN or Turner and mints a new ESPN challenger, it's likely not happening. The fact the NBA wants to jump into extension talks 2 years in advance is a strong signal that they are happy and want to lock this in. David Stern is retiring and he would like to wrap this up under his watch. The fact that the NBA is looking to have talks ahead of FS1's launch and while NBCSN is still finding it's footing indicates to me that just like the Facebook couple you wish would end it, they're more likely to change their status update to engaged or married rather than breaking up.

In a nutshell, the Bucks had a better chance of knocking off the Heat.

Will The NBA Create A Third Television Package For FS1 And NBCSN To Fight To The Death For?

This is the most intriguing question to me. Surely NBCSN and FS1 know this is their clearest path to NBA games and will be doing their damndest to sway the NBA to consider such an option.

If I'm the NBA, I do it in a heartbeat. There's enough games for everyone and why not plant your flag on a fourth network (counting NBATV as a third).

I posed this question to John Ourand (who doesn't write his articles in a basement in mesh shorts) and his feedback was, "I doubt it will carve out another package. ESPN and Turner pay for exclusivity."

Buzzkill.

Still though, you have to wonder.

There is a nostalgia element with NBC and the NBA that will resonate with fans. That said, the NBA cares about money and exposure. Some "game of the week" package or "doubleheader day/night" for a NBCSN or FS1 would certainly elevate the NBA's presence on a growing sports network.

In regards to NBCSN, the question looms large on if they could actually juggle working with the NHL and NBA. ESPN chose not to twice and they had the benefit of ESPN2. Meanwhile, NBC is playing NHL game 7's on CNBC where it's labeled in the program guide as a financial show. While NBC could add value and would be great in my opinion, I think Ourand is probably right that Turner and ESPN would appease the NBA by paying more to keep the NBA off a third network.

While FS1 would also be very interesting, Fox doesn't exactly have the best history in terms of actual game production. Plus, the channel has yet to even launch. FS1 and the NBA would be a nice fit, but the timing doesn't seem right.

Still though, it's not hard to make the case to create such a package and if the NBA has a bit of vision and keeps their current television partners happy, then it could happen. There could be a chance we see something develop here for either FS1 or NBCSN.

Will The NBA Continue To Be On Broadcast TV?

If you haven't noticed sports programming is moving off broadcast and onto cable. Monday Night Football, the BCS, the Final Four, etc. Will the NBA follow suit?

Again, I turned to John Ourand (who works in an office and whose job likely includes health insurance) to answer this question. He deemed that a good question (YES!) and replied with "I don't know how important a broadcast presence is to the NBA."

Basically, ESPN will try to steer the NBA in this direction. The NBA will want more money and may put a firm "no" on the NBA Finals on ESPN in particular.

My guess is that this extension will likely see the NBA phase out games on ABC with the NBA Finals remaining on broadcast TV for a handful of years before eventually moving over to ESPN.

The flow of top sporting events to cable is inevitable and the NBA will find the middle ground by allowing the Finals to stay for a while before moving over.

When Will These Deals Actually Get Done?

The SBJ article said they would get looked at this summer. With that in mind, here is how the timeline could break down...

July 2013- NBA begins talking to Turner and ESPN. Both sides of the table pronounce a love of the other side and a strong interest in working together. All compliments. A deal could be imminent!

August 2013 - The NBA will ask for somewhere around the neighborhood of $1.5 billion a year (up from the $937 million annually in their last deal). ESPN and Turner will say "that sounds rich" and momentum will slow down.

September 2013 - The NBA will have "informal" meetings with FS1 and NBC. As mentioned before, one of them has a shot at potentially convincing the NBA to carve out a new package. Word will get back to Turner and ESPN who will act somewhat indignant before sending in the "A team" suits to further caress the NBA.

October- December 2013 - The season starting would be a good artificial deadline to try to aim for. The holidays is a good fallback option. Either way, an extension is going to take place before David Stern leaves office at the end of January.

The two variables in my mind that could extend this thing or make it a shorter negotiating period is a) how far apart the NBA and ESPN and Turner will be in their initial offers b) if FS1 or NBCSN has much traction in luring the NBA to jump in bed with them too.

What Deal Terms Could Change?

Turner and ESPN are going to pony up so they'll naturally ask for some things in exchange which could include:

- A much longer deal than previous television contracts (see the SEC's mammoth commitment with ESPN)

- Fewer blackout restrictions

- Less restrictions on picking top teams a certain amount of times a year

- Rights to online and mobile

There you have it. A total shot in the dark guide to what to look for over the summer and into the fall in regards to the NBA's future on television. Bottom line: more money will be passed on to viewers and funneled to owners and players with a shot in the arm to an ESPN competitor being unlikely and Turner's NBA franchise continuing its strong run.

[James28]

All three of the major U.S. broadcast TV networks (ABC, CBS and NBC) have had the telecast rights of each of the four major North American sports leagues (NFL, MLB, NBA and NHL) for at least one period in their history. The FOX Broadcasting Company has had the telecast rights of the NFL, MLB and NHL throughout their two-plus-decade existence. It should be noted that the FOX Network has never had the telecast rights for the NBA.

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http://www.sportsbusinessdaily.com/J...NBA-media.aspx

NBA nearing massive media deals
Rights fees would more than double in new agreements with incumbents
ESPN, Turner
By John Lombardo & John Ourand

The NBA and its network partners expect to reach an agreement in
principle on new long-term media deals by the start of the regular
season, according to sources on all sides of the discussions.

Talks have progressed so rapidly that details are emerging on a
massive agreement that would see the league�s annual rights fee more
than double, with ESPN and Turner combining to pay more than $2
billion per year on average. One source said ESPN already has
committed to pay �well over� $1 billion per year, and Turner is not
far behind for a media rights extension that would kick in with the
2016-17 season.

As part of the current eight-year deals that end in June 2016, ESPN
pays $485 million per year and Turner pays $445 million per year on
average, bringing the league�s total take at just less than $1 billion
per year.

But that figure would be dwarfed in a new deal that several sources
pegged as an eight-year pact, though one source with knowledge of the
talks said it ultimately could end up running nine years.

A final deal might not be signed or announced before the new season,
but talks with ESPN and Turner are advanced enough that sources said
there is little chance the NBA will carve out a third package for
another network, like Fox Sports or NBC Sports. ESPN, in particular,
has been adamant during negotiations that the NBA not develop a new
package to sell to a competitive sports network, sources said.

The NBA cannot talk to other networks until the middle of next year,
when ESPN and Turner�s exclusive negotiating window runs out. Barring
an unforeseen snag in the ongoing negotiations, all sides expect new
deals to be signed well before that happens.

The new agreements are expected to mirror the current ones in many
ways. While many believe the league and its TV partners could fashion
an agreement by the season opener on Oct. 28 � with a formal
announcement likely to come weeks or even months later � several
issues are left to be resolved, such as what to do with live streaming
rights. The NBA wants to explore the NFL�s model, where streaming
rights are sold separately. The NFL sold streaming rights to Verizon
as part of a four-year, $1 billion deal that runs through the 2017
season. ESPN and Turner are balking at such a plan, saying that they
need streaming rights to the games they produce.

One network source called a separation of those rights a �nonstarter.�

Streaming rights have been part of every TV rights deal (other than in
the NFL) for the past several years, and the cable industry�s TV
Everywhere streaming push continues to be a priority for networks and
distributors.

While the league wants to retain control over its live streaming
rights, one source said any new deal will likely include additional
digital rights to the networks.

�That includes more video highlights and digital packages,� the source
said.

The league and networks have reached broad agreement on several
points. ESPN will retain rights to the NBA Finals championship series,
which will remain on ABC. Turner will keep its exclusive Thursday
night franchise and NBA All-Star Game coverage.

Turner also will continue to manage the NBA�s digital assets, which
include NBA TV, NBA League Pass and NBA.com. Over the past 18 months,
other properties, such as NASCAR and the PGA Tour, have taken their
digital rights back from Turner. But it would be more difficult for
the NBA to take its digital rights back since they are combined with
NBA TV and with League Pass, the league�s out-of-market package.

The new agreements would represent a coup for NBA Commissioner Adam
Silver, who viewed the media deals as a top priority when he took over
for longtime commissioner David Stern in February.

League and network executives declined to comment, but Silver hinted
at the scope of the forthcoming deals at an industry conference in New
York last week, saying, �The rights are going to go up, and go up a
lot.�

Silver set up two committees � one made up of owners, the other of
team presidents � to look into new ways to negotiate the TV rights.

The NBA clearly is benefiting from a sports rights marketplace that
has remained red-hot for most of the past decade. ESPN and Turner
executives made it clear that they wanted to stay in business with the
NBA, which has one of the youngest audiences in sports TV � a trait TV
networks value.

The networks� current eight-year, $7.5 billion combined deal has been
in place since 2007.

ESPN and Turner have used sports programming as a way to convince
cable and satellite operators to pay higher license fees. Over the
past several years, ESPN has brought several championship events to
its schedule, like the Bowl Championship Series, the U.S. Open
(tennis) and the British Open. Turner has invested in the MLB playoffs
and the NCAA men�s basketball tournament to get a higher fee from
distributors. That strategy makes the NBA critical programming to have
for both networks.

The sides started engaging at the start of the year, but talks did not
start to pick up until the NBA playoffs in early June. Silver and Bill
Koenig, league vice president of business affairs, are representing
the NBA in the talks. ESPN President John Skipper and Turner
Broadcasting System President David Levy have led talks for their
respective networks.