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ABC/ESPN jumps into the negotiating process

12/6/2001

NEW YORK -- During the NBA Finals last season, commissioner
David Stern said he wanted new television rights deals completed by the end
of 2001 and for a lot more money.

One out of two isn't bad.

While talks with the networks have picked up recently -- and ABC
and ESPN suddenly joined the bidding -- it seems unlikely the NBA
will get more than the $2.64 billion it did under four-year deals
with NBC and Turner Sports that expire after this season.

According to sources familiar with the negotiations who spoke to
The Associated Press on condition of anonymity, NBC and Turner
didn't wrap up renewed deals before their windows for exclusive
negotiating closed in October.

NBC's bid for the broadcast network portion of the rights was
for less than the $1.75 billion it paid for the old package.

That opened the way for ABC and ESPN -- both owned by Walt Disney
Co. -- to try to acquire the rights.

"We maintain that the NBA is a highly attractive product under
the right terms," ESPN spokesman Mike Soltys said Wednesday. "We
are at the table with them."

After the first three games of series last year between the
Lakers and 76ers produced the best ratings for the NBA Finals since
Michael Jordan retired, Stern was optimistic about negotiating the
new television packages.

He said at the time that he wanted new agreements "before the
end of this calendar year" and at "a substantial increase."

Still, the league is not in the most enviable bargaining
position.

Regular-season ratings on NBC have dropped from 4.6 in 1997-98
to 4.3 (1998-99) to 3.4 (1999-00) to 3.0 (2000-01). Turner's NBA
audiences have dropped, too.

Even Jordan's return hasn't brought viewers back so far. The two
Washington Wizards games that NBC added to its schedule after No.
23 came out of retirement have averaged only a 2.9 rating (each
rating point represents a little more than 1 million television homes).

In addition, with the economy slumping and companies cutting
back on spending for advertising, networks are less likely to throw
around dollars the way they did in the late 1990s, when sports
league rights fees skyrocketed.

NBC has lost roughly $100 million a year under the current NBA
deal, which represented nearly double the rights fees from the
previous package.

"Unfortunately for the NBA, the timing of these negotiations
created some difficult issues. The advertising marketplace right
now is as soft as anyone can recall in the last 30 years," said
former CBS Sports president Neal Pilson, a consultant.

"The era of huge rights increases seems to have come to an end
for the time being."

None of the networks would reveal details of the current talks.

"We don't believe it's appropriate to comment during the
negotiations," NBC Sports VP Kevin Sullivan said Wednesday.

"We're having ongoing discussions with the NBA," Turner's Greg
Hughes said.

But Pilson thinks a resolution is imminent.

"A deal could be worked out by the end of the year and possibly
before Christmas," he said. "That's what they're shooting for."