TV Reception Fuzzy for NBA

In a sign of what the future of sports may be during troubled economic times, the NBA’s new television contract will likely reflect a reduction in rights fee for the first time in sports history--no matter who the partners are.

“It appears the era of huge escalation in sports rights fees may be coming to an end,” said Neal Pilson, former CBS Sports president and a leading sports television consultant.

The Disney entry of ABC and ESPN is bidding to obtain NBA rights beginning next season from incumbents NBC and Turner Broadcasting. But AOL Time Warner, the parent company of Turner Broadcasting, could remain involved under one potential scenario, with CNN/SI also carrying games, sources say.

Disney’s bid goes beyond simply paying a ballooning television rights fees, something that for decades has been a mainstay of such television deals: The monetary value is believed to be lower than the league’s current four-year, $2.4-billion contract with NBC and Turner Broadcasting.

But through creative structuring, the NBA could stand to make money through profit sharing, Internet rights and product licensing rights, and joint ownership of an NBA cable channel.

ABC would carry Sunday games and an extensive playoff package much as NBC does now. ESPN would get live games as many as three nights a week. CNN/SI would become a joint venture between AOL Time Warner and the NBA, with both accepting the risk but sharing in profits as well.

CNN/SI, according to an industry source, would carry perhaps two games a week as well as highlight and feature packages and other NBA programming.

“NBC and Turner aren’t locked at the hip,” the source said. “They are partners now in the NBA and NASCAR, but that doesn’t necessarily mean they would be in a future NBA deal.”

The NBA would like to remain involved with AOL Time Warner for obvious reasons--the size and success of the company and the Internet resources. AOL Time Warner is not having great success with CNN/SI and would gladly welcome a partner that brings in credibility and product.

The NBA television contract is up for grabs at a time when ratings are dropping and advertising revenue is drying up. The bidding is being closely watched by industry analysts, offering a look at the changing landscape of sports television as professional leagues and their television partners look for ways to overcome monetary shortfalls, some analysts said.

Once it was considered a certainly that television contracts would grow by leaps and bounds with each negotiation. But no more. NBC’s bid is also believed to be less than the current contract.

As for the monetary value of the Disney bid, Pilson said, “Sorting through all the aspects and determining the actual value of the proposal won’t be easy.”

Representatives for ABC, ESPN and the NBA all declined comment.

Pilson said he believes a new contract will be in place within the next couple of weeks, if not sooner. “My experience in negotiations is that once there is open bidding, the process speeds up considerably,” he said.

NBA Commissioner David Stern ideally wanted to have a new contract in place before the season started.

If Disney’s bid wins out, ABC could face scheduling problems. ABC has golf, figure skating and college basketball during the NBA season, meaning it might not be able to give the NBA the marquee treatment it gets from NBC.

ESPN would also have to do some shuffling to find room on its various channels. Which channels would be involved is not clear. If the AOL Time Warner bid fails, a joint-owned NBA cable channel between ESPN and the league remains a possibility.

However it plays out, elements of NBA.com TV, an NBA-owned channel now available on DirecTV, would figure to be a part of a new channel.

Besides economic difficulties, a ratings slide has also hurt the NBA. Network and cable ratings have fallen by one-third during the current contract.

An NBA contract that generates less revenue would be a red flag for other professional sports leagues.

David Hill, chairman of Fox Sports, recently said the contract “will be the most interesting and important contract in the history of sports television. It will determine the future of sports television.”