National Basketball Association Commissioner David Stern said on
Tuesday he expects to sign a new television deal, one that includes
a "healthy" increase over the current $4.6 billion terms, before
the end of the 2006-07 basketball season.
Stern, speaking at the Reuters Media Summit, said the NBA was
already in talks with existing broadcast and cable partners Walt
Disney Co. and Time Warner Inc about a deal to replace the current
six-year contract, which expires after the 2007-08 season.
"We have begun the discussions a couple of years early," Stern
said. "We would very much like to remain in business with our
current partners."
The NBA also is exploring selling a stake in its digital assets,
which includes its cable TV network and Web site, to a media
company, and establishing an NBA-sponsored league in China, he
added.
Stern said the new TV deal would likely be an expansion of the
current contract, noting that it could include digital assets and
overseas markets, and run over six years.
"I would say it's going to be a larger deal," Stern said,
referring to the current terms, which pays the league $4.6 billion
over the life of the contract, or $767 million a year. "We expect a
healthy increase."
The NBA's current TV deal increased the league's annual payment
by 25 percent from the prior four-year deal.
Regarding a deal involving the NBA's digital assets, Stern did
not name possible investors, but pointed to the current TV
partners.
"We are thinking about expanding the ownership base of our
digital assets to include a media company," he said. "We anticipate
a new deal will make both NBA TV and NBA.com more robust. We have
made it clear that for us a discussion of all of our assets on a
global scale is available.
"To be engaged with a company like Time Warner or a company like
Disney on either a digital or global scale is to engage partners
who bring their expertise and the scope of their businesses in ways
that we don't have yet and might not even be the best investment of
our resources," he added.
Time Warner owns a 2 percent stake in NBA TV and Stern said the
cable company and the league are discussing an increase in that
stake.
"As those negotiations unfold, you will see (Time Warner) having
a larger opportunity in our digital assets," he told Reuters
Television.
NBA TV, launched in 1999, airs about 100 NBA games a season. It
is available in 70 million U.S. homes and has 12 million
subscribers.
The league's NBA.com Web site averaged more than 2.6 million
daily visits last year, up 35 percent from the previous year. About
20 percent of the traffic originates from the league's Mandarin Web
site, Stern said.
While the NBA in the past has discussed setting up a league in
Europe, China is the more likely destination in the short term, he
said.
"The model that we're working on now is the placement of all of
our assets in China in an enterprise with all NBA rights," Stern
said. That would include rights to sponsorship and merchandise
revenue, TV deals there, and the ability to operate a league "such
as NBA of China."
"It's something that will be articulated by the close of the
(2008) Beijing Olympics," he added.
The key to the NBA's future success will be a geographic
division of league assets, rather than by businesses, with each
region including the right to operate a league under the NBA brand
name.
(Reuters November 29, 2006)