TV's Winners and Losers of the NBA Return (Analysis)
NEW YORK – It’s back to business for the NBA and its broadcast partners.
The league’s players and owners salvaged a 66-game season via a tentative deal reached after a 15-hour negotiating session that stretched into the early hours of Nov. 26. And that means that ad dollars that had gone to male-skewing entertainment networks including Comedy Central, Adult Swim, MTV, Spike, Discovery and History, are reverting back to the NBA.
“Marketers are happy. Buyers are happy. The people who are not too happy are those entertainment networks,” says Kevin Collins, senior vp, director at Initiative.
“There was a decent opportunity to write some first quarter business and then an even bigger opportunity in second quarter and that is definitely gone now,” agrees Sam Sussman, senior vp, sports activation director at Starcom Worldwide.
The NBA generated just over $800 million in ad revenue last season (Oct 2010-June 2011), according to Kantar Media, with more than half of that revenue coming in the post season when the stakes on the court are higher. While the bulk of the NBA was sold in the upfront, many buyers, anticipating a work stoppage advised clients against purchasing the NBA in the fourth quarter. The truncated season meant a loss of about $100 million in ad revenue for the NBA’s television partners, which include ESPN and TNT.
About 80 percent of NBA’s ratings points come in the post-season when the stakes are higher on the court. And a shortened season, set to open with a Christmas day tripleheader, preserves those precious post-season ratings points.
The NBA does not have the ratings or cachet of the NFL, which had its own labor dispute this season. Denise Larson – co-founder of research and analytics company NewMediaMetrics, which measures consumer attachment to television properties – says that among 47 sports properties, the NBA is only the 22nd most attaching among sports fans while the NFL takes up the top three slots with the Super Bowl, the playoffs and the regular season.
Still, live sports has a leg up on entertainment programming in an increasingly time-shifted television universe. Opinions vary on whether the NBA work stoppage, which may have alienated the casual fan, will translate into a ratings hit for the league.
The last two finals on ABC have put up healthy numbers. Last year’s championship – which saw the Dallas Mavericks defeat the Miami Heat in six games – averaged more than 17 million viewers, according to Nielsen. That was down slightly from 2010 when the Los Angeles Lakers defeated the Boston Celtics. That series went to seven games with a climactic championship game pulling in more than 28 million viewers to become the second most-watched NBA game ever. (The first was game six of the 1998 NBA finals between the Chicago Bulls and the Utah Jazz.)
“Prolonged labor disputes have a negative impact on ratings,” concedes Sussman. “But based on the positive momentum that the league had before the lockout and given the shortened length of the work stoppage, I don’t see this having a significant impact on ratings.”
And the power of live sports combined with the NBA's ascendancy is such that buyers see no obstacles for TNT or ESPN – and certainly not ABC, home of the NBA finals – in selling a truncated season. Last season, 30-second spots for the finals went for about $425,000, according to media forecasting firm SQAD.
“The value of live sports is far superior to what most networks are putting on the air in primetime,” says Collins. "It’s DVR-proof. It’s an engaged audience. And for certain young male demographics, you can’t touch it.”