NBA Stoppage Forces Nets to Scramble10/17/2011 12:01 AM Eastern
The National Basketball Association’s preseason
and the first two weeks of the regular campaign have
been wiped away.
Still, networks that present NBA games say they aren’t worried
about the lockout’s initial
impact on their telecast
and advertising schedules,
or about a potential rebate in
rights fees should there be a
protracted work stoppage.
Or, at least, they aren’t worried
Representatives of national
carriers ESPN and TNT, as
well as Fox Sports Net and
Comcast SportsNet regional
networks, expressed varied
measures of calm about the
early-season game casualties.
That tune could change soon. NBA commissioner David
Stern suggested contests could be canceled through Christmas
if an Oct 18. meeting between owners and the NBA Players
Association with mediator George Cohen — who helped
the National Football League and its players tackle their lockout
— doesn’t result in some negotiating progress.
Summing up the sentiments of many interviewed for this
article, one programming executive said, “If the lockout goes
to the end of December, then it becomes worrisome.”
LEAGUE HAS FINANCIAL NEEDS
The league, which said its teams collectively lost $300 million
last season, is trying to get the players to reduce the 57% of the
more than $4 billion in basketball-related income they scored
under a contract that expired with the 2010-11 campaign.
The owners also want to reduce the length of player contracts
and institute a de facto salary cap.
In 1998-99, a labor dispute truncated the NBA campaign to
a 50-game slate.
Should the NBA air-ball more contests through the Christmas
holiday — when the champion Dallas Mavericks and
runners-up Miami Heat are slated to meet on ABC — some
regional sports networks could push up against contract
clauses that require them to reimburse some of the monthly
license fees they receive from distributors.
While it might be a rule of thumb that RSNs have to dole out
rebates if 20 games are lost, rightsholders said each contract is
“It’s really hard to say. For
some networks, it’s the number
of games, or percentage
of telecasts,” one executive
“Some of the contracts include
language that point to
an overall number of sporting
events — not just pro basketball,”
veteran said. “In that case,
substitute telecasts, say college
basketball, may not work
against the trigger.”
TNT and ESPN/ABC Sports — in the middle of an eightyear
contract under which they allocate an average of $930
million annually through 2015-2016 — must pay rights fees to
the league, with the funds then distributed to the clubs. Those
monies would be rebated as games are missed, and deals
would be extended by one year if the entire 2011-12 campaign
were lost, according to sources familiar with the contracts.
The same scenario would evidently apply on the regional
level. That raises concerns about RSNs that hope to tip off
with the presumptive 2012-13 NBA season: Time Warner
Cable’s pair of Los Angeles Lakers-centric services and
Comcast’s channel featuring the NBA’s Houston Rockets and
Major League Baseball’s Houston Astros.
Time Warner Cable, NBCUniversal-owned CSN and Fox
Sports officials didn’t respond by press time. But one source
familiar with the deals said the season’s cancellation wouldn’t
stop the new RSNs from proceeding. “No, this is the last season
for those teams no matter what,” he said, before adding that
there could be some sort of compensation, a rebate for rights
fees, already paid.
While RSNs will have big holes in their lineups, Turner
Sports and ESPN/ABC Sports have even more at stake. “They
have a larger percentage of their revenues tied to the NBA coming
from the advertising than affiliates,” as one media executive
Typically, RSNs receive about 80% of their revenue from the
monthly license fee, with advertising accounting for the balance.
Kantar Media reported advertisers spent $807 million
on NBA games on cable and network TV during the 2010-11
“Realistically, we’re not going to replace the excitement and
ratings that our NBA telecasts generate,” one RSN executive
said. “We can move some advertisers into our other programming.
But for those who need the weight in the fourth quarter,
we understand [if they have to shift their budgets].”
At press time, the RSN executive said there had yet to be any
TNT televises 52 regular-season games, largely through
exclusive Thursday-night doubleheaders. Officials said the
network would fill in with components from its regular entertainment
Much of TNT’s NBA ad revenue and higher CPMs come
during its expansive playoff coverage, which typically encompasses
40 games over 40 nights.
Major sponsors with dedicated promotional elements, like
the “T-Mobile Halftime Report,” are typically secured through
multiyear pacts that would be extended.
OTHER AD OPTIONS
In the short term, TNT could shift advertisers seeking the
NBA’s young audience into other parts of its portfolio, including
TBS’s late-night talker Conan or male-skewing TruTV, according
to sources familiar with the game plan.
ESPN said it has “a contingency plan in place consisting
mostly of college football and basketball games in November.”
RSNs will look to more college hoops, classic NBA contests
(restricted by the league to the early-to-mid 1990s), encores
of college football games and perhaps some wrap-up reports
from the past baseball season.
The RSN executive, whose service televises pro hockey, says
it will emphasize the puck sport a bit more during the early
days of the lockout, and has made arrangements to augment
its college basketball lineup.