Players’ Salaries Could Average $1 Million
NBC Sports agreed yesterday on a four-year, $600 million contract to televise NBA games beginning next season, snatching the package from longtime carrier CBS and continuing the recent vast escalation in sports rights fees.
The $150-million-a-year price tag marks about a 340 percent increase over CBS’s $43.3 million fee it paid each of the past four seasons and could send NBA salaries to a $1 million average per player.
NBC will televise 20 to 26 regular season games a season, mostly on a Sunday afternoon series to begin each January, and up to 30 play-off games, all in afternoon or prime time.
“In a time when more and more games are being withheld from free TV packages, this is a meaningful increase,” NBC Sports President Dick Ebersol said. (CBS will show only 16 regular season games this season.)
The NBC deal will increase the NBA’s network TV revenue by more than $106 million annually over the CBS contract. The players, through their union contract, are guaranteed 53 percent of the league’s gross revenues, meaning that about $56 million more per year will be divided among the players on the 27 NBA teams. That figures to about $2 million per team. Added to the current salary cap of $9.8 million per team—there are 12 players on each squad—average salaries for players on teams that reach the salary cap would be about $1 million.
“This makes the owners and players very happy,” Charles Grantham, executive director of the players’ union, told the Associated Press. “We were close to the $1 million per player projected when the collective bargaining agreement was signed” in 1988.
The NBA has flourished in recent years after a period of decline in the late 1970s. Fueling the upswing—which has translated into higher TV ratings and TV money—have been a drug agreement between the league and union; an emergence of marquee stars such as Michael Jordan, Larry Bird and Magic Johnson, and a decision to push back the season until after the World Series.
CBS could not work out a deal with the NBA during a 30-day exclusive period that ended Oct. 31. After CBS passed, NBA Commissioner David Stern submitted identical specifications to NBC and ABC. ABC declined to meet the $600 million offer; NBC did.
“CBS’s strategy for the last year has been apparently to pay almost anything to get major franchises,” Ebersol said. “We never would have expected CBS to let [the NBA] get away…. We were shocked to get the opportunity to bid and amazed at the figure. We feel this is a break-even or profit situation for us.”
He said NBC estimated that CBS was making $40 million to $50 million a year from its NBA package. So, with more games (translating to more commercial time) to be aired in the new deal, it still could be profitable at a significantly higher rights fee, Ebersol reasoned.
NBC’s NBA contract is the latest blow in a spiraling sports rights war between CBS and NBC. CBS dearly wanted the 1992 Summer Olympics in Barcelona—to parlay with its rights to the ‘92 Winter Games in Albertville, France—but NBC gained the prize with a record $401 million bid. Then CBS took away NBC Sports’s signature franchise—major league baseball—with a record four-year, $1.06 billion contract. Now NBC has returned the favor with its record deal for the NBA, which CBS had broadcast since the 1973-74 season.
Included in the deal is a late Saturday morning NBA show to air on NBC starting in November 1990. Ebersol said the magazine program would be “an ‘E.T.’ of the NBA,” referring to the popular syndicated “Entertainment Tonight” show.
Still to come for the NBA is a new national cable deal. Its two-year, $50 million contract with Turner Broadcasting System will expire after this season. The next deal likely will double or triple the NBA’s national cable revenue. Turner has an exclusive negotiating period until Nov. 30.