NBA AND ABC AGREE TO TV DEAL

Amount Said to Exceed NBC's Rival $1.3 Billion Offer

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NEW YORK (AdAge.com) -- The Walt Disney Co. has reached a deal in principle with the National Basketball Association to carry games on its ABC broadcast network and ESPN cable outlet starting with the 2002-03 season, according to people familiar with the situation.

Disney is said to be hammering out a deal worth more than the reported $1.3 billion that NBC made as a final offer. NBC's deal with the league expires after the current season.

Meanwhile, as expected, AOL Time Warner's Turner Broadcasting System has reached a separate deal in principle with the NBA to carry games on TNT and to rebrand CNN/SI from an all-sports news network to a network that airs games, much as rival ESPN does. The network will be 50% owned by the NBA and 50% by AOL Time Warner and may take on the name AOL Sports. It is expected to air some 100 NBA games.

Both the Disney and Turner contracts are expected to be signed soon.

No comment
An NBA spokesman declined comment. An ESPN spokesman said: "We're still having conversations." A Turner spokesman and NBC spokesman declined comment.

It appears as if the dual revenue streams that cable offers -- advertising and subscription dollars -- is becoming the only viable model for media companies to continue to make huge payouts to sports leagues.

The Disney deal is a surprise on several levels. NBA Commissioner David Stern and NBC Sports Chairman Dick Ebersol are said to be close, and Mr. Stern has long taken a "less is more" philosophy to avoid running too many games nationally to keep interest levels up. Now, with two well-established national cable outlets, he runs the risk of some dilution in consumer interest.

The deal also calls for the NBA All-Star game to move to TNT, marking the first time a major sports league's all-star game moves to cable.

It appears as if there will be four nights of games on cable -- two on ESPN and two on TNT -- plus 100 games on the would-be AOL Sports. ABC will carry the NBA Finals plus eight playoff games that are not part of the conference finals and 15 regular season games. ESPN and Turner are expected to split the rest of the playoff games, including the conference finals.

History repeats for NBC
For NBC, which is the No. 1 network in adults ages 18 to 49, history repeats itself. In 1998, it balked at paying the huge rights fees to continue carrying National Football League games and has since said it feels it made the financially responsible decision.

NBC has now made a similar decision -- that it could not make money (it has lost hundreds of millions of dollars over the last two years as the NBA's ratings have declined) with the terms the NBA was seeking.

Disney, meanwhile, continues to show an enthusiasm for big-time sports programming, largely because ESPN has become such a revenue driver for the company. In 1998, it spent lavishly to secure "Monday Night Football" on ABC and "Sunday Night Football" on ESPN. It also has a pricey deal with the National Hockey League.

NBC's sports line-up is now an eclectic mix: the Olympics every two years through 2008, the Triple Crown, Nascar, golf and tennis and Notre Dame college football.

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