The NBA will receive about twice as much in fees as the prior contracts, said the people, who asked not to be identified because the terms are private. Time Warner’s TNT and Disney’s ESPN and ABC networks currently pay the NBA about $930 million a year combined in a deal that was set to expire at the end of 2015-2016 season.
Disney and Time Warner took advantage of an exclusive window to negotiate a new deal, locking in a key contract that represented the last major U.S. sports rights that were up for grabs until 2021. Live sporting events like the NBA are ratings gold mines, helping the networks boost viewership and licensing fees from cable and satellite-TV distributors. The deal is crucial to Time Warner Chief Executive Officer Jeff Bewkes’ plan to turn around Turner Broadcasting, which includes TNT, and increase its fees.
“It’s good to be the NBA,” said Lee Berke, president of LHB Sports Entertainment & Media Inc., a firm that advises professional sports leagues and universities on media rights. “They’ve hit the media marketplace at just the right time, with growing viewership, substantial multi-platform programming and multiple competitors for their rights.”
The NBA and ESPN are planning a new online video service that will show live games and also be available to customers who don’t pay for cable or satellite-TV, the Wall Street Journal reported, citing unidentified sources.
Mike Bass, a spokesman for the NBA, declined to comment, as did Chris LaPlaca a spokesman for ESPN. A representative for Turner didn’t immediately respond to a request for comment.
Some players, including LeBron James, have signed shorter contract in anticipation of more TV money down the road. James, the league’s four-time Most Valuable Player, limited his new $42.1 million agreement with the Cleveland Cavaliers to two years to let him negotiate a new deal for the 2016-17 season, when the new TV rights will boost contract values.
Bloomberg reported in July, citing people familiar with the matter, that the NBA was seeking to double its rates over the prior contract. Bloomberg also reported at the time that 21st Century Fox Inc., the Rupert Murdoch-controlled company that tried to buy Time Warner this year, was interested in pursuing the NBA rights.
The current arrangement gives Time Warner rights to air 52 regular-season games and up to 52 playoff games. Disney’s rights have included 75 regular season games and as many as 29 playoff games.
The NBA opens the 2014-2015 season on Oct. 28. The league has scheduled a press conference for 10 a.m. New York time tomorrow to discuss new media partnerships.
Credit to Bloomberg.com who originally published this article