NBA's got game planMichael's back just as league gets ready for new TV pacts 9/30/2001 08:00:00 PM Eastern
The National Basketball Association faces a fresh season with the return of an aging superstar and a fluid TV strategy likely to produce a pact with fewer regular season games on broadcast TV—and possibly one with a new cable partner.
The much-hyped return of Michael Jordan, who made his official announcement last week, is seen by some as a tonic for the league's woeful regular-season ratings record. But even NBA executives aren't assuming Jordan is a slam-dunk ratings dynamo. For starters, he's still on a non-contending team. And he'll probably play for just two years, assuming His Airness still has it and doesn't lose it.
But Jordan's return comes conveniently as contract talks in the current exclusive negotiating window with incumbent carriers NBC and Turner Broadcasting get ready to open after being delayed by the terrorist attacks. But really, that roughly month-long window won't mean much, with the NBA in no hurry to make a deal.
With or without Jordan, the NBA remains one of the big-three pro sports properties in a marketplace where quality programming remains a valuable commodity. But apparently the league is also becoming a big believer in scarcity.
The NBA's real ratings remedy will be to reduce the number of regular-season games on NBC, which will likely retain its rights, sources say. Observers endorse that approach, arguing that fewer games on broadcast increases the relative value of games to viewers, who have tuned out in droves, dropping last season's NBC average regular-season rating to a 2.9.
"It wouldn't surprise me if NBC made that suggestion," says independent sports-media analyst Neal Pilson. "By reducing the number of games, you cut back on your lower-rated games."
It also plays into the depressed economic backdrop, acceding to a more modest—or flat—licensing fee for fewer games. The NBA expects a modest rise, but nothing like the 140% increase that produced the current four-year pact with NBC at $1.7 billion a year and the Turner networks at $900 million a year, which ends after this season. Revenue-sharing formulas could be adjusted to a lower threshold in the league's favor.
The league may also consider the addition of another cable partner that might carry a weekly game, or start its own channel on analog cable using its video archives.
Observers see three logical suitors to produce that channel: Turner parent AOL Time Warner, Viacom or Disney's ESPN, which also could become the sole cable partner. An ESPN spokesman says the cable sports net would be interested in making an NBA deal "if it makes good business sense."
Observers agree. "I think they do have to go to another cable partner," says Jon Mandel, co-managing director of MediaCom. "They'll have to bring in more partners to get the money they need."
But Mandel dismisses a basketball channel as an "albatross" that would also dilute the NBA's TV presence. He quips: "They already have an archival channel. Isn't Michael Jordan coming back?"
Mandel sees the NBA's flagging ratings as a primary issue in the upcoming talks. Jordan's return is simply "reminding everybody of how bad it's been."