Ops May Seek Rebates for Lost NBA Games

Author:
Publish date:
Updated on

Cable operators are very concerned about the impact of the
National Basketball Association's player-owner strife, and they would look to receive
compensation from national- and regional-sports services if games are lost due to the
owners' lockout.

At press time, the league had already canceled all NBA
exhibition games, and it was contemplating at least delaying the start of the regular
season, which is slated to begin in early November. At issue is an owners-proposed cap on
player salaries.

If the league cannot come to an agreement within the next
few weeks -- the two sides are reportedly far apart -- industry observers believe that the
season won't begin until late December or early January, forcing the cancellation of
many regular-season games.

"We're watching the situation very closely, but
I'm very concerned about [losing some of] the regular season," said Lynne
Buening, vice president of programming for Falcon Cable TV Corp.

At least one top 10 operator said that if games are
canceled, the MSO has provisions built into its regional-sports-network contracts that
allow for a reduction of licensing fees.

"We pretty much carve out the pro product
specifically, so we get the specific programming value that we pay for," the operator
said.

And at least one top 15 operator said the MSO has yet to
reach a renewal licensing deal for Turner Network Television -- which holds the national
cable rights for the league -- because of the uncertainty surrounding the lockout.

While TNT is asking for an overall 2 percent to 5 percent
licensing-fee increase for next year, the operator said it also wants assurances that it
will be compensated in the event of lost NBA games.

"[TNT] wouldn't remove the cost of the National
Football League package [obtained earlier this year by ESPN] because it said it spent more
to retain the NBA package," the operator said. "Now, they won't guarantee a
certain number of NBA games ... there has to be a rate reduction for lost games."

Representatives from TNT would not comment on the matter.

Dan Ronayne, vice president of marketing for Rainbow
Sports, which co-owns regional-sports networks with Fox Sports Net, also would not comment
on any contingency plans for the loss of NBA games on the regional-sports level. But he
did express confidence that the owners and players will come to a resolution soon, thereby
eliminating any problems going forward.

"Right now, we're not worried, because we have
every intent of airing a full slate of games, as we have in recent years," Ronayne
said.

The sports networks would also have to worry about
compensating advertisers if there's a lengthy lockout. Kevin O'Malley, senior
vice president of programming for TNT, said the network has contingency plans in place in
case of an extended lockout, including replacing NBA product with ratings-strong movies
and other programming.

As for the advertisers, the network would most likely make
up the lost games with additional NBA games once the season starts or through an expanded
1999-2000 NBA television schedule.

"Most of the advertisers have been with us for years,
and they have anticipated that there might be a problem with the start of the
season," O'Malley said. "There may be some advertisers that will be harder
to accommodate because they're looking for that fourth-quarter hit, but for most,
we'll merely add games throughout the rest of the season."

Still, some sports executives felt that it will be
difficult to replace any void left by lost NBA games, particularly on the regional-sports
level

"How do you replace the [Chicago] Bulls?" asked
Jim Corno, vice president and general manager of Fox Sports Chicago. "It's our Seinfeld."

Related