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Pay it forward - Broadcasting & Cable

Pay it forward

To pay for new $4.6B NBA contract, ESPN and TNT will charge MSOs more per sub
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Cable operators are bracing for the aftershocks of the National Basketball Association's new six-year, $4.6 billion TV deal.

NBA games will now appear on AOL Time Warner's TNT and a joint channel with the NBA, plus Walt Disney Co.'s ABC and ESPN. Currently, NBA games appear on NBC, TNT and TBS.

The deal is helping fuel cable networks' rate hikes to cable operators. TNT is getting ready to raise its rates by an undisclosed amount. Although ESPN says it won't impose an NBA surcharge, it was already planning to raise rates 20%.

"Unquestionably, the quality of our programming justifies an increase," said Andy Heller, U.S. distribution president for AOL's Turner Broadcasting. "But we're not gouging them."

Currently, TNT's average subscriber fee is 52 cents, ESPN's 72 cents, according to Kagan World Media.

Under the new NBA deal, which starts in the 2002-03 season, ABC/ESPN will pony up $2.4 billion for the broadcast portion, and Turner's cable share is valued at about $2.2 billion, industry executives say.

MSO execs grouse about the rising costs of sports programming. "They've pushed the NBA onto cable, and now everyone is paying for it," lamented one veteran cable exec. "It's a disaster for the cable industry. The model just doesn't work."

However, four operators are also NBA team owners: AOL Time Warner, Charter Chairman Paul Allen, Comcast Communications and Cablevision. Each had to approve the new TV deal.

NBA Commissioner David Stern sees no harm in moving the bulk of his league's telecasts to cable. "We're following the market; we're not making it."

Disney also holds TV rights for the National Hockey League, putting most of its games on ESPN. This season, ABC will air five NHL games and its All Star Game on Feb. 2. Local broadcasts of Major League Baseball games are carried on regional sports networks. ESPN also has Sunday-night National Football League contests.

Other pro packages at ESPN and ABC don't come close to the NBA's national cable exposure. A total of 223 regular-season NBA games will air on three different cable networks starting in the 2002-03 season.

Other over-the-air coverage will be thin. ABC will air 15 Sunday-afternoon games and the NBA Finals. NBC currently airs about 35 games.

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