NBA Networks Cope WIth Dispute, Rating And Fees Future Concerns
With the NBA labor dispute continuing, a Wall Street analyst suggests that while ESPN and TNT would lose significant ad revenue from the lack of games, profitability might increase because the rights fees are so expensive. ESPN lost an estimated $25 million, and TNT lost an estimated $227 million last season on the NBA, according to a new report.
"In general, we estimate that the NBA is essentially a break-even or a loss leader for the TV networks, based on advertising revenue alone,” wrote Credit Suisse's Spencer Wang.
The figures are solely based on in-game ad revenues. They do not take into account advertising in shoulder programming, such as pre-game and highlight shows, which presumably will suffer during the lockout.
Also not meshed in is the benefit the NBA has in driving affiliate fee revenues for the networks. Wang says it is hard to pin down how much is collected due to a specific sport.
But sports are critical in keeping those payments coming and increasing.
The lost ad revenues this season from canceled games should only have a short-term deleterious impact, Wang writes. The major hurdle could be when the games return -- ratings may suffer from “fan backlash” hurting ad revenue, while rights fees would still be expensive.
On the flip side, Wang writes that if the league and players reach a deal that makes more teams competitive, the ratings could go up once the action returns.
During the current work stoppage, ESPN should not have to refund any affiliate fees due to lost NBA games, Wang notes, suggesting that replacement live programming should satisfy its contracts with operators.
In the 2010-11 season, using Kantar figures, Wang estimates the Walt Disney Co. (ESPN and ABC) posted $453.9 million in ad dollars from NBA games, up from $446.4 million the year before. At Turner, TNT posted $209.9 million, up from $173.3 million.
In rights fees, ESPN is estimated to owe $473.7 million this season and Turner $434.6 million. There are also production costs that total an estimated $190,000 a game last year, Wang writes.
Recent MediaDailyNews Articles
-
Fox May Stream Super Bowl On Authenticated Basis June 19, 9:04 p.m.
The past two Super Bowls have been streamed free online, but Fox may offer a type ... -
Univision, 'Variety' Team For Original Content June 19, 5:43 p.m.
Reflecting the growing size and importance of the U.S. Hispanic market, TV broadcasters have been moving ... -
UK Ad Spend Forecast To Hit $20B June 19, 5:40 p.m.
The pace of ad spending in the UK is picking up. Measured media expenditures in the ... -
3 Innovation Lions Awarded, Barbarian Grabs Grand Prix June 19, 1:33 p.m.
The Barbarian Group has won the Lions Grand Prix Award for Innovation, a new award category ... -
Cable Upfront Begins, Final Take Projected At $9.8B June 19, 12:07 p.m.
Following most of the broadcast upfront deal-making, many cable networks have been inking and completing upfront ... -
Shazam Launches Service To Measure TV Campaigns June 19, 10:49 a.m.
On the heels of other social media apps looking to help out TV brand advertisers with ... -
GM Returns To Oscars, Drives 5-Year Deal June 19, 10:16 a.m.
General Motors and the Oscars telecast are back in business.The Detroit carmaker said Wednesday that it ... -
Cannes King: Omnicom Earns Most Medals, Media Agency Of Year June 19, 9:34 a.m.
Omnicom’s OMD Worldwide was the most medaled media network at the Cannes ad festival this year, ... -
Consumers Tag Costco, Movado As Most Promising Brands June 18, 6:09 p.m.
Costco, Cisco and Movado are the three most financially promising pure-play, publicly traded brands in the ... -
'Voice' Sings To Consistent Beat June 18, 5:57 p.m.
One of the biggest shows on broadcast television finished its spring edition pretty close to where ...
Be the first to comment on "NBA Networks Cope WIth Dispute, Rating And Fees Future Concerns"
Leave a Comment