After months of trepidation and failed negotiations, NBA Commissioner David Stern officially canceled the first two weeks of the 2011-12 season on Monday night. Despite marathon negotiations over the past week, including a seven-plus-hour session on Monday, the league announced that a total of 100 games will be canceled. This pushes the NBA’s opening night back from Nov. 1 to Nov. 14 at the earliest and puts the entire season in doubt.
The announcement is a devastating blow to Turner Sports (which owns TBS and and operates NBA TV) and ESPN/ABC, which stand to lose 18 nationally televised games. TNT, NBA TV, and ESPN/ABC are all coming off record-high regular-season and postseason ratings. RSNs will also be hit especially hard, especially if further games are canceled in the coming weeks. Any alternative programming is likely to draw much less interest from advertisers, resulting in a significant loss in ad revenue.
Mobile-production providers around the country had already lost 114 potential dates when the NBA canceled the entire preseason last week. Now, with at least 100 regular-season games lost, mobile-production outfits find themselves in a precarious situation. Although alternative last-minute events can be booked during October and early November, these companies must remain in a holding pattern in regard to the remaining 1,200-plus regular- and post-season games until a labor agreement is reached or the entire season is canceled.
“As we learned during the [2004-05 NHL and 1998-99 NBA lockouts], you’ve always got to be ready,” says Mobile Television Group President/COO/GM Phil Garvin. “You can’t tell your NBA clients that you went and booked their truck on something else. That is not an option. So that means that, if NBA doesn’t come back, we will have a lot of trucks sitting for hundreds of dates that don’t happen.”
With the announcement, ESPN/ESPN2 has lost seven of its 75 regular-season telecasts, while ABC is still slated to air 15. ESPN has acknowledged that it has a “a contingency plan consisting mostly of college football and basketball” to replace locked-out NBA games.
Meanwhile, Turner Sports, which loses six of its 52 games on TNT as well as five games on NBA TV as a result of the cancelations, has not yet announced its plan for alternative programming but released a statement: “Like NBA fans, our hope is that a favorable resolution is reached for both sides. We believe in the strength of the NBA brand and hope for an outcome that preserves as much of the 2011-12 season as possible.”
Turner and ESPN/ABC are paying a combined $930 million per season through the end of their NBA contracts in 2016. Although there is no definite number, TNT, ESPN, and ABC could collectively lose out on about $1.25 billion in advertising revenue, according to some projections.
Not to be forgotten, dozens of RSNs stand to lose major ad revenue should a large bulk of the season be canceled. In in 2009, total RSN revenue grew 6.6% to $4.6 billion, according to SNL Kagan. The NBA represents a massive component of this revenue for the majority of these RSNs.
Stay tuned for more of SVG’s NBA lockout coverage and its effect on the production industry in the coming days.