Walt Disney Co. and Time Warner Inc. renewed their contracts to carry National Basketball Association games through the 2025-26 season, locking in the coveted live sports programming before other networks could bid.
The NBA will receive about twice as much in fees as in the prior contracts, said people familiar with the matter, who asked not to be identified because the terms are private. Time Warner's TNT and Disney's ESPN and ABC networks currently pay the NBA about $930 million a year combined in a deal that was set to expire at the end of 2015-2016 season.
The deal will increase the TNT package to 64 games, 52 during its Thursday night coverage throughout the season and an additional 12 "marquee" games that will air during the second half of the season, TNT said in a news release. The network will remain the host of the NBA All-Star Game, and Time Warner's Turner Broadcasting System Inc. will continue to manage the league's digital portfolio, increasing NBA programming for its Bleacher Report website.
"The agreement locks in some of the most valuable, original, premium live sports programming that we'll continue to monetize across TNT and all other platforms within our extensive portfolio," David Levy, Turner's president, said in a statement.
ESPN and NBC also established a framework to introduce a new online video service, but did not provide further details on the potential over-the-top platform.
Disney and Time Warner used an exclusive window to retain a key contract that represented the last major U.S. sports rights that were up for grabs until 2021. Live sporting events like the NBA are ratings gold mines, helping the networks boost viewership and licensing fees from cable and satellite-TV distributors. The deal is crucial to Time Warner Chief Executive Officer Jeff Bewkes' plan to turn around Turner, which includes TNT, and increase its fees.
"It's good to be the NBA," said Lee Berke, president of LHB Sports Entertainment & Media Inc., which advises professional sports leagues and universities on media rights. "They've hit the media marketplace at just the right time, with growing viewership, substantial multi-platform programming and multiple competitors for their rights."
Some players, including LeBron James, have signed shorter contracts in anticipation of more TV money down the road. James, the league's four-time Most Valuable Player, limited his new $42.1 million agreement with the Cleveland Cavaliers to two years to let him negotiate a new deal for the 2016-17 season, when the new TV rights will boost contract values.
Bloomberg reported in July, citing people familiar with the matter, that the NBA was seeking to double its rates over the prior contract. Bloomberg also reported at the time that 21st Century Fox Inc., the Rupert Murdoch-controlled company that tried to buy Time Warner this year, was interested in pursuing the NBA rights.
The current arrangement gives Time Warner rights to air 52 regular-season games and up to 52 playoff games. Disney's rights have included 75 regular-season games and as many as 29 playoff games.
The NBA opens the 2014-2015 season on Oct. 28.