Ops Nervous With NBA Season on Line

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With no end in sight to the National Basketball Association
lockout, operators are weighing their options in regard to potential rebates or other
compensation from regional sports networks and Turner Network Television if the season is
indeed canceled.

Meanwhile, regional sports networks are planning to
implement another round of replacement programming that may have to last for several
months if the NBA season is eliminated.

At least two MSOs are re-evaluating their regional sports
networks contracts and TNT deals to see if rebates are available if the NBA fails to play
a game this year. At press time no talks were scheduled in the four-month NBA lockout,
which has forced cancellation of games through mid-January. The league's all-star
game has also been canceled.

Industry observers speculate that the season could be
canceled if an agreement between the players' union and team owners isn't
reached before Dec. 31.

"If the season is canceled, there certainly has to be
some form of compensation provided to operators [by the regionals and TNT]," said one
top 10 MSO executive. "We're paying for NBA games, not college basketball
games."

A TNT spokesman would only say that the network has several
"plans in development" if the season is canceled, but would not provide further
details. "We're still hopeful that we'll have a season," said the
spokesman.

So far, TNT hasn't suffered a major ratings decline
with its replacement programming. Offering mostly movies, TNT is averaging a 1.5 rating,
compared with a 1.7 rating for NBA games last year, said the network.

Michael Lewellen, vice president of media relations for Fox
Sports Net, said that many of the regional deals "do not carry provisions for
rebates."

For some operators, the NBA lockout has had a direct effect
on business.

Prime Cable of Chicago, which usually sees a slight surge
in subscriber sign-ups at the start of the NBA season, is experiencing a 5 percent to 10
percent decline in subscriber growth compared to last year, said Michael Woods, vice
president of sales and marketing for the 138,000-subscriber system. Although other factors
such as increased market competition and an unusually warm start to the winter season has
affected sales, Woods also cites the lack of Chicago Bulls games on Fox Sports Chicago as
a factor. Some basketball fans often sign up for cable during the NBA season and switch
off during the summer.

"It's a bit disconcerting," Woods said.

Meanwhile, the search continues to find alternative
programming to replace ratings-rich NBA product. While overseas baseball games, classic
NBA games and early season college basketball games served as temporary replacements for
lost regular-season NBA games, regional network executives are now preparing to fill what
could be a season-long programming void.

"It's hard to do this because you're hopeful
that something happens, but you have to have a backup plan," said Arthur Smith,
executive vice president of programming for Fox Sports Net.

Fox will help the regionals by offering a national Pack-10
college basketball package, as well as other programming specials and live events. But
Smith admits the appeal of local-team NBA games is hard to replace.

"The programming is not a big problem; we have so many
options," Smith said. "Nevertheless, it's very difficult to replace the
NBA; nothing matches the ratings for home-team games."

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