Lockout Dunks on Networks

Billions in revenue at stake with league labor dispute still unresolved

Minutes after the NBA announced the July 1 lockout, Miami Heat guard Dwyane Wade began casting around for a new job. “Any1 hiring?” the seven-time All-Star tweeted, adding that he was “available for all bar and bat mitzvahs and weddings.”

One hundred days into a standoff that could wash away billions in revenues, the snappy patter has dried up.

Last week, NBA commissioner David Stern said the first 14 days of the regular-season schedule would be canceled if a deal isn’t worked out by Oct. 10. While the gap between the demands of management and what the players are willing to concede has narrowed considerably since the lockout began, it’s likely that NBA network partners will have to make do with a truncated slate. (The 1998 work stoppage reduced the season from 82 games to 50.)

ESPN/ABC Sports and TNT will have to replace $900 million in ad sales revenue if the dust-up negates the entire 2011-12 season. The stakes get higher in the spring, as nearly half of those dollars are earmarked for the playoffs and the best-of-seven NBA Finals.

“ESPN is in a much better situation because they have so many different programming options that they can offer,” said one national TV buyer. “They’ve got five days a week of college basketball, which you can’t beat for replacement value.” For its part, Turner is likely to push time in late night (TBS’ Conan, Adult Swim) and on its off-net comedy acquisition, The Big Bang Theory. Spots in the prime-time TNT dramas Southland and Leverage will be available in January.

For all the in-house inventory up for grabs, rival nets will also be circling like hungry sharks. “The cable entertainment networks who target young adult males—Spike TV, FX, Discovery Channel—are going to be the big winners if there is no NBA season,” says  Kevin Collins, svp, director, national broadcast at Initiative. “But I don’t think it’ll come down to a full-season write-off. There’s too much at stake for both sides.”

Media buyers say they’re proceeding as if the season will tip off in early December, adding that many clients are holding off on making any commitments for the second quarter of 2012. “There are dates that we need to hit in terms of activations, and if we get six weeks outside of those targets, we’ll need to move on,” said one sports buyer. “Anything with an auto client that has to come through in the fourth quarter is going to be problematic. And there’s only so much football you can buy.”

Also at stake is the $930 million in fees the NBA collects from ESPN and TNT. Those contracts expire at the end of 2016.