NBA Lockout: League Cancels 1st Two Weeks of Regular Season
As expected, it's come to this -- the National Basketball Association on Monday cancelled the first two weeks of its regular-season schedule, its players and owners unable to reach a new collective bargaining agreement.
The impact of the NBA lockout to the television and broader media business is already assured, with the entire pre-season schedule already cancelled.
Media-wise, just for starters, Turner's TNT and Disney's ESPN and ABC together pay about $930 million to broadcast NBA games, while recouping ad revenue in the neighborhood of $1.25 billion.
That doesn't speak to the equally lucrative regional sports-cable business, or the local broadcast industry.
Also read: No Basketball, No Billions: Media Preps for NBA Lockout Disaster
Claiming that the majority of its 30 teams currently are in the red, the NBA is seeking to reduce players' current 57 percent share of all "basketball-related revenue."
With teams signing lucrative individual contracts with regional sports cable networks -- the Lakers, for example, will receive about $3 billion from Time Warner over the next 20 years -- the players are understandably skeptical.
There was speculation among lockout watchers that a deal might be had in the "50/50" range, with owners agreeing to more revenue sharing among big- and small-market teams, and players accepting more stringent salary caps that would limit their revenue participation.
But with the players led by feisty L.A. Lakers guard Derek Fisher, and the league under the commissioner-ship of one of the most powerful men in sports, the smirky David Stern, there's really no soft personality to cave first here.
For months, NBA pundits have been noting resolve among both players and owners to sacrifice the season for their perceived greater good. It even leaked months ago that NBA owners sought advice from their brethren in the National Hockey League, who locked their players out for the entire 2004-05 pro-hockey season in order to get their hard cap. (Although, given the TV and attendance hit the NHL endured in the years following, you wonder why they still advocate locking out players.)
Under the popular Fisher, meanwhile, NBA players are loudly and publicly negotiating foreign contracts, with All-Stars like New Jersey's Deron Williams already starting play abroad, and mega-stars like Kobe Bryant in advanced negotiations with foreign teams.
Television-wise, this is like a 5.7-magatude earthquake relative to, like, the 9.4 richter scale catastrophe that might have been if the National Football League hadn't resolved its labor differences over the summer.
The NBA's broadcast deals and advertising revenues pale in comparison to those of pro football, which props up the prime time schedules of three broadcast networks (NBC, CBS and Fox).
For its part, ABC has weekend NBA games in the regular season, but should be able to cope. Should the season rim out, ABC would sacrifice the lucrative ad revenue of the NBA Finals -- price for 30 second spot: over $400 million -- so that could be a deal down the road.
ESPN and TNT, on the other hand, will start hurting right away (they were supposed to start showing games at the beginning of November).
Long-time NBA watchers, of course, recall that the 1998-99 season was truncated from 82 to 50 games because of a lockout. But pundits note that the stakes are much bigger this time -- not only are the players, the league and its broadcast and advertising partners giving up more money than ever, they're also giving up momentum.
Since 2007, the NBA has been on a TV ratings rocket ride, eclipsing levels of popularity not seen since Michael Jordan was thin and could still jump high.
Ask any pro-sports owner who's been through a labor stoppage, and they'll tell you -- they're absolutely murder on ratings and ticket sales.Related Articles: No Basketball, No Billions: Media Preps for NBA Lockout Disaster
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