• by Wayne Friedman , June 28, 2007

Spying more value in TV sports properties, Walt Disney's ABC, ESPN and TNT will extend their deal with the NBA for another eight years--and up their collective rights fees 21% to almost 1 billion a year.

A big part of the $7.4 billion deal comes from extended digital rights for ABC-ESPN and TNT across both nets' respective platforms. ESPN and TNT have made significant investments in the online and mobile video arenas.

This big price hike for the NBA comes despite some meager U.S. TV ratings for the sport--especially with this season's NBA Finals. "Two weeks after the worst final series in the NBA, they sign these deals," says Neal Pilson, president of sports marketing consultant, Pilson Communications. "That should tell you something."

Although the NBA's final ratings were weak, ESPN's playoff ratings were up 23%. But its regular season games--and that of TNT, the NBA's other partner--has been flat year-to-year.

"The media tends to focus on ratings," he says. "But in every meeting we have, our talks focus on digital. This deal doesn't surprise me."

The collective ABC-ESPN and TNT six-year deals, which expire next year, have averaged $766 million a year--with ESPN spending $417 million per year and Turner Broadcasting shelling out $367 million.

In the new deal, ESPN will have access to NBA content across 17 platforms, including five digital platform areas: ABC, ABC HD, ESPN, ESPN HD, ESPN2, ESPN2 HD, ESPNews, ESPN Classic, ESPN Deportes, ESPN International, ESPN Radio, ESPN.com, ESPN360.com, ESPN Mobile Publishing, ESPN Mobile TV, ESPNU and ESPN podcasts.

Overall, Pilson says the deal speaks to the still-strong power of big sports franchises, where events can pull in consistent and predictable TV ratings versus other TV programming. "What the media tends to overlook, in this fractionalized media world, is that sport franchises become more valuable," he says.

ABC will broadcast a minimum of 15 regular-season games beginning on Christmas and continuing on Sunday afternoons starting in January. ESPN and ESPN2 will air up to 75 regular-season games--mostly on Wednesday and Friday nights. (ESPN had 67 regular-season games in the 2006-2007 season).

TNT will air 52 regular-season exclusive games per year--about the same as it has under the existing contract. The network will also air the same number of playoff games, including conference semifinal games and one conference finals series. TNT will also continue to air the NBA All-Star game.

For the key big money-making playoff games, ESPN will get up to 29 exclusive Conference semifinals games and one of the Conference finals series. This year, it had 20 playoff games, and 18 playoff games a year ago.

Media analysts believe the value to ABC-ESPN for the playoffs and finals represents about 60% of the overall deal.

For ESPN, the new deal will give it more exclusivity in the post-season, as well as expansion of digital rights for ESPN International. It also gives more TV rights for ESPN International in Latin America, Europe and other territories.

NBA is also saving something for itself. NBA TV, its small cable network, will air a number of regular-season games as well as nine playoff games.