According to NBC Sports president Dick Ebersol, failure to land primary television rights to the NBA might have relegated his network's sports division to "part-time" status.
That frightening possibility was averted Thursday when NBC, in what can be described only as a surprise, wrested NBA rights from CBS for the next four seasons for $600 million.The agreement calls for extra fees for promotion, estimated at $30 million.
"It was our expectation that we would never get the opportunity to put a bid on the table for the NBA," Ebersol said in announcing the deal. "We assumed CBS would never let a major franchise, one with which they've had a terrific relationship for 17 years, get away.
"We're surprised and delighted, obviously, to get the opportunity to bid on it - and at a price that all of our chief financial officers believe enables us to make money, or at least break even. To say that I coveted the NBA is an understatement."
CBS, which has televised the NBA since 1973-74, is in the final season of a four-year, $173 million deal with the league. CBS's exclusive negotiating period with the NBA expired Oct. 31, and shortly thereafter, the network, along with ABC, declined to meet the rights fee set by the NBA.
That meant that pro basketball, a much-needed plum, was NBC's for the taking.
"We naturally assumed that (CBS) would do whatever it took to retain the NBA," Ebersol said. "We based that assumption on the rights fees they paid for Lillehammer ($300 million for the Winter Olympics in Lillehammer, Norway, in 1994) and major league baseball ($1.06 billion for the 1990 through 1993 seasons).
"Our friends up the street said they knew they were going to lose money on those franchises, but they desired them in order to help promote their entertainment efforts. We, of course, believed they would view the NBA in the same manner."
Until Thursday, CBS Sports had appeared to be cornering the market for major sports programming. CBS holds rights to NFC games in the NFL and the NCAA basketball tournament. In addition to baseball, which NBC had televised for 42 years, and the '94 Winter Olympics, CBS dished out $243 million for the 1992 Winter Olympics in Albertville, France.
Although it was understood that CBS would be unable to recoup its huge investments on most of those properties, the network, whose entertainment shows have trailed top-rated NBC and second-place ABC in recent years, seemed to have targeted premier sports events as a means of boosting its sagging prestige.
That, of course, was not the case at NBC.
"NBC is the No. 1 network," Ebersol said. "We are not looking for sports programming with which to promote a dying prime-trime schedule. The management of NBC insisted that whatever sports programming we acquired would have to be profitable, or at least break even. And the NBA, at this point, appears to be just such a vehicle.
"Without a major franchise, NBC was prepared to scale back its sports division. I wouldn't say the situation was desperate because of our strength in other areas, but that's the way it was."
Buoyed by the acquisition of the NBA, Ebersol said NBC has "high hopes" of gaining all of the NCAA basketball package, which also is coming up for bidding.
In getting the NBA, which NBC last broadcast in 1962, the Peacock Network gained at least partial revenge for losing baseball to CBS.
Under terms of its agreement with the NBA, NBC will televise a minimum of 20 regular-season games next season and up to 26 in each of the three following seasons. Also included in the deal are the NBA All-Star Game, up to 30 playoff games annually and the McDonald's Open from Europe.
"We're looking forward to a partnership that will touch all bases - production, programming, marketing, sponsor promotion," NBA commissioner David Stern said. "We're delighted in the arrangement."
Stern said that with increased cable rights - those are owned by Turner Broadcasting through this season - TV income to the league should top $200 million for the 1990-91 season.
"In 1986," Stern said, "our total TV package was just $33 million - $22 million from CBS and $11 million from cable."
Exploding TV rights fees should drive NBA player salaries, which currently average nearly $800,000, past the $1 million mark next season. Under the collective-bargaining agreement between the league and the NBA Players Association signed in 1988, 53 cents of each TV dollar is earmarked for the players.
Stern said that for purposes of the salary cap, the contract was evaluated at $126 million for 1990-91. Under the formula, the salary cap would rise from $9.8 million to at least $11.5 million per team.