NBA Appears Close on New TV Deal

The pieces are beginning to fall into place, and a new NBA television contract could be announced as soon as today.

Part of the deal, according to what sources told The Times and Associated Press on Wednesday, will be a new cable channel jointly owned by the NBA and AOL Time Warner, the parent company of Turner Broadcasting.

The working title for the new channel would be AOL Sports. It would replace CNN-SI, which was launched Dec. 12, 1996, but never got past a distribution level of 21 million homes.

AOL Sports would also replace NBA.com TV, available only on satellite and digital cable television.

The new channel would carry most of the NBA’s national cable telecasts, with some games remaining on TNT and TBS.

Television consultant Neal Pilson said the channel would have to carry live NBA games to have any real value.

The fact that the NBA apparently has a deal with AOL Time Warner is an indication that incumbents NBC and Turner Broadcasting are likely to retain NBA rights.

“It’s a domino effect,” Pilson said.

If the NBA has a deal on a jointly owned channel with AOL Time Warner, that’s a sign that ESPN may be out of the picture.

“It’s unlikely the NBA would have two cable partners,” Pilson said.

And if ESPN is out, so is ABC.

Pilson said he couldn’t foresee a deal involving NBC and ESPN.

The Disney entry of ABC and ESPN entered the bidding two weeks ago after NBC reportedly bid about $1.3 billion over four years. NBC’s share of the current $2.44-billion, four-year contract is $1.75 billion. Turner’s share is $840 million.

The value of the AOL Time Warner/Turner bid is hard to figure, but it could be worth around $1 billion a year.

“There’s real potential here,” Pilson said. “A channel that reaches 80 million homes is worth several billion dollars, so there is a real upside.

“The league gets increased distribution, it gets the opportunity for sharing in revenues from this distribution and, most important, it gets the opportunity for its equity to appreciate dramatically if the channel grows.”