Walt Disney Co. and Time Warner Inc. renewed their contracts to carry National Basketball Association games through the 2024-25 season, tripling payments to the league and locking in coveted live sports programming before other networks could bid.
The NBA will receive $24 billion over nine years, said a person 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 pay the NBA about $930 million a year combined in a deal that was set to expire at the end of 2015-2016 season.
Disney and Time Warner used an exclusive window to retain a key contract that represented the last major U.S. sports rights that were available 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’s plan to turn around his Turner Broadcasting Division, which includes TNT, and increase its fees.
“These new agreements demonstrate the value of live sports in a DVR world,” NBA Commissioner Adam Silver said at a news conference. “These are extraordinarily healthy deals, financially.”
Disney’s ABC and ESPN will air 100 games a season, while the TNT package will increase to 64 games, 52 during its Thursday night coverage and an additional 12 “marquee” games that will air during the second half of the season, the league said in a news release. TNT will remain the host of the NBA All-Star Game, and Turner will continue to manage the league’s digital portfolio, increasing NBA programming for its Bleacher Report website. ESPN also will receive enhanced assets for its online platforms.
“It continues ESPN’s long-stated strategy to invest in a portfolio of live rights,” said John Skipper, ESPN’s president. “This is a key property for us given the ascendant nature of the league.”
David Levy, Turner’s president, said the agreement would benefit consumers, television operators and advertisers.
“Each year the playoffs help TNT win nights of television during the all-important May sweeps,” Levy said. “We look forward to that tradition continuing.”
Comcast Corp. and 21st Century Fox Inc., which are rights-holders for some local team broadcasts, also were interested in the national deals and had preliminary discussions with the NBA, while Silicon Valley companies such as Google Inc. and Apple Inc. talked to the league about its digital offerings, Silver said.
“We ultimately made a decision that this was the right time to go,” Silver said.
The NBA and networks began negotiations in February, and Skipper said he didn’t know what it might have cost ESPN had competitive bids been allowed.
“We clearly made the calculation that we were uninterested in exploring that possibility,” Skipper said.
The NBA and ESPN also are planning an online video service that will show live games and also be available to customers who don’t pay for cable or satellite TV. ESPN will televise NBA Development League and summer league games, while TNT will host an end-of-season awards show.
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.
“When this deals kicks in in 2016-17 it will lead to a substantial increase that year in the salary cap,” Silver said. “It will have a profound effect.”
Michele Roberts, the executive director of the National Basketball Players Association, said the new contracts were “good news” to all of the league’s stakeholders.
“It is clear that the league is now entering a period of unprecedented revenue growth,” Roberts said in a statement. “Our job will be to ensure that the players receive their fair share of the results of their efforts and that we do everything possible to maintain the growth and popularity of the game.”
Bloomberg reported in July that Fox, the Rupert Murdoch- controlled company that tried to buy Time Warner this year, was interested in pursuing the NBA rights.
Ted Leonsis, the Washington Wizards owner and chairman of the NBA’s Media Committee, said the new TV deals are significant enough to show “the value enhancement of owning a team.”
“There’s never been a better time to be an owner of an NBA franchise, or frankly, any professional sports team,” Leonsis said.
The NBA opens the 2014-2015 season on Oct. 28.
(A previous version of this story corrected the end date of the deals to the 2024-25 season.)