New York -- There will be a lot more NBA games and content in play under the rights extensions the league has inked with ESPN and Turner Broadcasting System.
And rightfully so, considering that the pro hoops league media partners are almost trebling the combined $920 million in annual outlays under their current contracts that run through the 2015-16 season. Together, the parties will pay some $24 billion over a nine-year term that will conclude with the 2024-25 season. Reports indicate that ESPN, whose current contract averages $480 million, will pay about $1.4 billion for each year of the new deal, which includes the launch of an over-the-top systems outside of the pay-TV ecosystem.
For its part, Turner will allocate some $1.2 billion per season, which features a new 12-game slate in the second half of the seasons, and more content for its Bleacher Report digital property. TNT spends some $440 miillion per season under its present contract.
During the press conference announcing the deal at the Saint Regis Hotel on Monday morning, both ESPN president John Skipper and Turner Broadcasting president David Levy said the deals made financial sense for their respective parents The Walt Disney Co. and Time Warner.
“Sports rights are more and more valuable," said Skipper. “It continues ESPN’s long-stated strategy to invest in a portfolio of live rights. This is a key property for us given the ascendant nature of the league.”
Levy stated that the deal was a priority for Turner's parent. “Each year the playoffs help TNT win nights of television during the all-important May sweeps. We look forward to that tradition continuing,” he said "It will be meaningfully valuable to our company at the end of this deal and we'll have a strong R.O.I. when the end of this deal happens."
Asked afterward, if that meant TNT affiliates should expect a meaningful increase in their monthly license fees accordingly, Levy said: “The value of TNT programming is reflected in its license fee and that includes the NBA.”
He said there would be no TNT surcharge tied to the NBA renewal, and that affiliate pacts “have to run their course. Going forward, the value of NBA will be reflected in Turner’s enhanced set of assets" with the league.
TNT, in addition to retaining its exclusive Thursday night doubleheaders, will tip off a dozen more live games on another night of the week during the second half of the season. The programmer will have NBA Opening Night, exclusive coverage of most of NBA All-Star Weekend, including the game itself and more playoff contests than ESPN/ABC. Turner will also create a new NBA awards show and proffer additional programming around the beginning of the season and the start of the playoffs.
Turner Sports will also retain TV Everywhere rights that allows for all NBA content airing across Turner Broadcasting networks to be streamed live across the company's multiple digital platforms. Additionally, Turner will have enhanced digital rights to serve NBA content across its Bleacher Report online service.
Turner Sports will also continue to manage NBA Digital, including NBA TV, NBA.com, NBA Mobile, NBA League Pass, WNBA.com and NBADLeague.com.
Levy said Turner is eyeing Sunday and Monday nights as potential landing spots for the additional 12-game package that will begin after the All-Star break and be centered on delivering matchups with significant playoff implications.
Under its deal, ESPN and broadcast brethren ABC, which remains the home of The Finals, gain 10 additional games (plus 10 additional exclusive windows) raising their combined regular-season total to 100 (85 on the cable network, 15 on the broadcaster). The new agreements also give ESPN significant increases in their radio and international rights, as well as extend its agreement with the WNBA through 2025. ESPN will add about 750 hours per year of linear/digital content, and televise D-League and NBA Summer League games, giving pro hoops a year-round presence on the worldwide leader.
As to the planned OTT service, Skipper said it wouldn’t upset the current pay-TV system.
“There is no contradiction in continuing to enhance and buttress the current system by building new business and new way to reach fans,” said Skipper. “We think they are complementary.”
Skipper said the OTT service was in its incipient stages, but the plan calls for the inclusion of some live games, as well as studio programming, highlight and analysis. It also may include content beyond pro basketball. Whatever the ultimate content, it will reflect ESPN’s quality of production.
All that being said, Skipper emphasized this was merely a “framework” for the service. “We have a lot of work to do,” he told MCN after the press conference.
The league’s partners also paid a premium to keep others from getting a chance to play in the NBA’s growing arena.
The NBA and the media companies, which were in the midst of their exclusive negotiating windows that wouldn’t have closed until next year, began their negotiations in earnest during February, which Silver said escalated to “around the clock” talks over the last 10 days or so. Skipper said he didn’t know what it might have cost ESPN had competitive bids were entered.
“We clearly made the calculation that we were uninterested in exploring that possibility,” Skipper said.
In announcing the first national rights deal under his watch, Silver said: “We decided to renew our agreements with Turner and Disney two years early, because they have been terrific partners and they each share responsibility for the tremendous growth and popularity of our game.”
Silver said the league had engaged in “discussions, but not negotiations," with Comcast and Fox, both of which are deeply rooted with the league via their regional sports networks’ coverage of NBA clubs. "I don't think we left any money on the table."
After the presser, Silver said that NBA TV was also adding 10 games to its schedule, pushing its lineup of regular-season telecasts to 100. He believes that the league’s in-house service will grow beyond its current 60 million subscriber roster as Turner assumes primary distribution responsibilities.
Levy said “Turner will take more of a lead role in affiliate negotiations, but we will continue to work with Bill Koenig," the NBA’s president of global media distribution.
Although Levy acknowledged NBA TV will be rolled into Turner portfolio, he cautioned that buttressing its sub base will depend on “how it lines up” with other networks and their affiliate deal lengths.
The smarter way to stay on top of the multichannel video marketplace. Sign up below.