NBA’s TV Billions Are Still Flowing Even With Games Going Dark
NBA’s TV Billions Are Said to Keep Flowing Even as Games Go Dark
(Bloomberg) -- National Basketball Association teams are still receiving payments from their broadcast partners, even though games are on hold because of the coronavirus outbreak, according to people familiar with the matter.
The NBA last week said it was suspending its regular season after a player tested positive for the virus, forcing its network partners -- AT&T Inc.’s Turner and Walt Disney Co.’s ABC and ESPN -- to fill programming holes when the league was meant to be approaching its playoffs.
The NBA didn’t immediately respond to a request for comment. ESPN and Turner declined to say whether the networks were making payments as part of agreements that pay the league about $2.6 billion annually.
“This is an unprecedented situation,” ESPN said in a statement. “We have great relationships with our league partners and are confident we can address all issues constructively going forward.”
Said Turner: “We have strong, longstanding relationships with our partners, and we’re confident we will be able to find solutions that work for all of us, despite this truly unprecedented situation.”
Losing Revenue
Keeping the flow of TV money going is a boon for the league’s teams, which are losing out on revenue from parking, tickets and concessions.
The NBA’s broadcast contracts expire after the 2024-25 season, which is significant because, according to the people, the value lost to the networks must be made up over the life of the deals. That exact value must be negotiated, and might include more games or additional advertising inventory.
It’s similar to what happened during NBA labor disputes. Most recently, in 2011, a lockout shortened the season to 66 games from the usual 82.
The TV payments are also good news for players as the salary cap, or team spending limit, is tied to revenue.
Dallas Mavericks owner Mark Cuban has said it’s possible the league could finish its season in mid-August rather than its customary schedule of mid-June.
The NBA broadcasters are suffering mightily from the loss of programming. Almost $700 million of ads will be at risk for Disney should the suspended season be fully canceled, Geetha Ranganathan, an analyst at Bloomberg Intelligence, said in a note Tuesday. Turner, which was going to show the scuttled NCAA March Madness college basketball championship in addition to the NBA, faces a loss of almost $960 million in ads, she said.
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