Walt Disney Co.'s ABC and ESPN and Time Warner Inc.'s TNT agreed Wednesday to pay the National Basketball Assn. $7.4 billion over eight years for rights to televise its games and, in one of the first deals of its kind, stream action on the Internet and mobile devices.
The deal, which begins in 2008 and runs through the 2015-16 season, works out to an average of about $930 million a year. That's a 22% increase over the $765-million average under the current agreement, industry sources said. The expanded digital rights contributed to the increase, along with the continuing rise in the cost of television rights.
The cost of sports broadcast rights has escalated despite a decline in television ratings for the recent NBA finals and overall TV viewership of the league's regular-season games. That is because sports are still considered appointment viewing on television and reach a demographic swath coveted by advertisers, who are also trying to expand their digital reach.
The deal gives the NBA a television presence every day of the week. ESPN will carry games on Wednesday and Friday, ABC will broadcast games on Sunday, TNT will continue its Thursday double-header and NBA TV will carry games on Monday, Tuesday and Saturday.
Under the deal, Time Warner and Disney will have rights to about 200 games and will be free to spin off digital feeds to any of their affiliated broadcast, cable, Internet and mobile assets. The NBA retains digital rights to the remaining 1,000 or so regular-season games.
Basketball fans looking for their fix will be able to watch live games on TV on ESPN, online through ESPN360.com, or on their cellphones via ESPN Mobile TV. They can also view game highlights on digital versions of ESPN's signature shows.
"The desire for sports content has not changed over the years, but how fans consume it has," said David Levy, president of Turner Sports, which has similar rights for TNT OverTime and other Time Warner properties. "Now, more than ever, viewers have sports content and information at their fingertips, due to the growth of digital platforms such as wireless and broadband."
ESPN's internal studies found that teenagers, college students and young adults -- the mainstays of the sports demographic -- digested sports differently from their parents. They spend more time online, checking scores or watching video highlights. They download and listen to sports-oriented podcasts and increasingly use their mobile phones to access the Web.
