Ratings down, revs up for NBA

One-sided games, star shortage add to dip

The number of viewers watching the pro basketball playoffs may be significantly down from last year, but the NBA is still assured of harvesting more money when it signs a new deal with ESPN and TNT in the next month.

The reasons for the downward Nielsen trend in the playoffs are mostly beyond the NBA’s control: too many one-sided games, a shortage of dazzling star players and a raft of smaller-market cities.

The most cringe-worthy post-season report card from Nielsen probably came on May 31, when a double-overtime conference final on TNT, in which a superhuman LeBron James powered Cleveland to victory over favored Detroit, couldn’t manage to chalk up more viewers than the “Scripps National Spelling Bee” on ABC.

Double-digit Nielsen declines have dogged NBA games in both the regular season and the playoffs this year. One exception is ESPN, whose numbers inched up during the regular season by 2% in total viewers and by 3% among men 18-34. But, in a rare event for the five years of shared coverage by ABC, TNT and ESPN, all three have suffered playoff declines in the same year.

ABC, which has exclusive carriage of the Finals, is hoping for an upward blip: Cleveland’s James has broken through with his sensational play, generating some much-needed buzz as his Cavaliers take on the San Antonio Spurs.

Rick Gentile, professor of sports management at Seton Hall U. and a former top sports exec with CBS, says he’s amused by the perception that the most colorful personality on the Dallas Mavericks (eliminated in the first round of the playoffs despite chalking up the best regular-season record) is not a player but the owner, Mark Cuban.

But the personality of the moment is James. David Carter, author and director of the Sports Business Institute at USC, says, “The pressure is on LeBron to extricate the NBA from its soft postseason ratings.”

But star power may run afoul of the market size of the cities in this year’s matchup, said Bob Gutkowski, CEO of Marketing Group Intl. and former president of Madison Square Garden. San Antonio is one of the smallest markets in the NBA, ranked 30th by Nielsen, and Cleveland ranks 21st. Last year’s Finals cities, Dallas and Miami, ranked sixth and 16th, respectively.

“The NBA needs New York, Los Angeles and Chicago to pump up its playoff ratings,” Gutkowski says. But only the Chicago Bulls advanced as far as the second round of this year’s playoffs; the Los Angeles Lakers lost in the first round, and the New York Knicks failed to reach the playoffs for the third year in a row.

Carter remembers the time when the biggest NBA stars thrived in top media markets such as Los Angeles (Magic Johnson, Kareem Abdul-Jabbar), Chicago (Michael Jordan, Scottie Pippen), Philadelphia (Julius Erving) and Boston (Larry Bird).

Amid all the gloom, however, no one is cryin’ the blues. Published reports say the NBA — deep in negotiations on a new contract — will get bigger bucks when it signs an eight-year extension of its current deal with ESPN/ABC and TNT, which expires in the summer of 2008. (ESPN/ABC ponies up $400 million a year and TNT adds $366.5 million.)

“We love the NBA,” says Len DeLuca, senior VP of programming and acquisitions for ESPN. “For two months every spring, NBA playoff games are the top-rated programs in cable television. Ten of ESPN’s highest-rated programs in May were playoff games.”

But as a sign of the year-to-year difference in basketball viewership, ESPN’s primetime total-viewer numbers last month plummeted by 29% from May of 2006.

But DeLuca and other NBA boosters insist the decline in ratings is only one part of a more complicated picture.

One of the reasons the NBA will extract heftier license fees in the new contract is that it’s likely to allow its cable and broadcast partners to do some streaming of games on their Web sites and to rebroadcast games in the on-demand platforms that ESPN and TNT are beefing up to meet the needs of cable operators.

“The power is in the hands of NBA fans,” says DeLuca, adding that if they want to mothball the TV sets and watch games on their computers or cell phones or wireless media players, ESPN plans to accommodate them — even if it means paying through both nostrils to secure those rights, or sharing the advertising revenues in these new-media windows with the league.

But no matter where the feed of an NBA game shows up, says Gentile, “it’s a live event, and nobody TiVos a live event.”

Madison Avenue might even fork over a premium, he adds, because “all of those NBA fans will actually be tuned in to the advertising messages.”

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