NBA, Disney Agree on TV Deal

The Walt Disney Co. and the NBA have reached an agreement in principle on a new national television contract in which Disney, the parent company of ABC and ESPN, will pay the league an average of $400 million a year.

The deal with Disney means NBC’s 12-year relationship with the NBA will end after this season’s championship series.

The NBA’s new television contract, expected to be finalized and announced early next week, also will include Turner Broadcasting and its parent company, AOL Time Warner, and those entities will pay $250 million a year.

Representatives from the NBA and the networks declined comment.

But according to sources, the combined rights fee under the new contract will be $650 million a year. That represents $30 million a year more than what NBC and Turner are now paying under the final year of a four-year contract.

In essence, it appears the NBA has come up with a six-year, $3.9-billion contract to replace the current four-year, $2.44-billion contract.

Beginning next season, games will be on ABC, ESPN, TNT and a new channel, AOL Sports, a joint venture between AOL Time Warner and the NBA.

“There are two significant aspects to the new contract,” said television consultant Neal Pilson, the former CBS Sports president who has been following the negotiations closely.

“One is, during a very difficult economic time, the NBA was able to show an increase in rights fees, which is remarkable even though it is a moderate increase.

“The other significant aspect of this deal is a move from broadcast television to cable.”

A source said ABC would televise only 15 regular-season games next season, plus the NBA finals. The number of ABC regular-season games, less than half of the 34 NBC will televise this season, would probably increase slightly each season during the life of the contract, the source said.

ESPN and TNT would share in coverage of the playoffs through the conference finals. ABC would carry only the finals. It would not televise weekend early round games.

Also, TNT would televise the NBA All-Star game, always a marquee event.

AOL Sports, according to several sources, would carry four games a week over a 25-week span. ESPN would carry games twice a week through the season, possibly Fridays and Sundays, and TNT might end up with Thursday doubleheaders.

AOL Sports is expected to replace CNN/SI, which reaches slightly more than 20 million homes.

AOL Sports could give the NBA a long-term asset that would generate advertising revenue as well as money from subscribers’ fees. Another plus is the league would have equity in the channel.

“If the channel can grow to where it reaches 60 million homes, that’s a huge value,” Pilson said.

Pilson said it is his understanding that NBA.com TV, a relatively new channel available on satellite and digital cable, will continue operation. NBA.com TV, however, will not televise live games.

Details of the regular-season cable schedule--such as which outlet will get which nights--have to be worked out. But it appears there could be national telecasts six nights a week, double the number now offered by Turner’s TNT and TBS.

This would be in addition to local telecasts, such as Laker games on Channel 9 and Fox Sports Net, and Clipper games on Fox Sports Net 2. The Clippers do not have an over-the-air station this season but are expected to have one in place by next season.

NBC reportedly made its final bid last Tuesday. It’s believed to have been in the $350-million-a-year range.

NBC lost $100 million on the NBA last season, and could lose as much $200 million this season, a source said.

“NBC has established a clear precedent that unless sports deals make bottom-line sense for [parent company] General Electric, it will not participate,” Pilson said. “For Disney, this reflects the power of ESPN and their overall promotion platform.”

The minimal increase is a far cry from past NBA contracts. The league was getting only $27.5 million a year from national television in the early ‘80s, but rights’ fees in ensuing contracts usually doubled.

But a flattening out, or even a decrease, was expected this time.