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NBA Strikes 9-Year Deals With ESPN, Turner That Expand Digital Rights

In two deals that cement its media alliances for nearly the next decade, the National Basketball Association selected its two current partners, Walt Disney’s ESPN and Time Warner’s Turner, to carry its games through the 2024-2025 season as well as transmit them in greater fashion through digital means. In ESPN’s case, the league has agreed to work with the sports-media juggernaut to create a broadband-only offering in which it would take an equity stake.

The pacts are the league’s first major media deals struck under Adam Silver, the executive who became commissioner in February. For both Disney and Time Warner, the agreements ought to be taken as signs of stability. The NBA deal brings ESPN resolution to what is likely to be its last major rights negotiation for several years, and the pact continues what has been a  major linchpin of Turner’s programming at a time when the unit is being scrutinized by its corporate parent.

Neither ESPN nor Turner disclosed the price they had paid to secure the new round of rights, but one person familiar with the talks suggested the two companies had paid in excess of $2 billion – a staggering increase over the price tag for previous agreements, which has been said to circle around $930 million. The higher costs signify the continued importance of live sports programming to media outlets, which have seen traditional ratings for scripted comedies and dramas erode with the rise of new technologies like digital-video recording, streaming video and on-demand video. Because the games are often watched live, they are more highly prized by advertisers than they may have been in decades past.

Under the terms of the deals, Turner and ESPN will televise more national regular-season games – 100 for ESPN and sister ABC, which will continue to broadcast the NBA Finals, and 64 for Turner. They will continue to do so on their traditional nights of the week – Wednesday and Friday for ESPN, Thursdays for Turner’s TNT, and Sundays for ESPN and ABC.  The NBA’s own cable network will present over 100 regular-season games each year.

Both companies were able to secure new aspects to their partnerships with the NBA that could make their alliances difficult to disrupt in the future.   ESPN and the NBA will negotiate the launch of a new “over-the-top” offering that will allow for transmission of games via digital means  in which the league would receive an equity interest. Details for the new offering will be announced at a future date. ESPN also won  enhanced digital rights to provide NBA content for emerging forms of content transmission, including ESPN.com and WatchESPN. Meanwhile, the NBA and Turner will  continue joint management of the NBA’s digital assets including NBA TV, NBA.com, and NBA Mobile,  which Turner operates out of an Atlanta production facility. TNT will debut the first NBA Awards Show, an annual event set for the end of the season.

In striking the agreements, the Disney- and Time Warner-owned outlets were able to keep at bay a growing number of competitors eager to use content from a major sports league to goose interest in their offerings. An NBA alliance would be a boon to such networks as 21st Century Fox’s Fox Sports 1 or Comcast’s NBCSN.

 

 

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