David Stern in a media conference answering questions about the future of the NBA television coverage.

Q: The networks seemed to be adamant that the checkbooks are closing, and you experienced that with NBC. What do you see in the future of programs like Monday Night Football or other sports leagues. Do you see cable as the future … pay per view … where do you think we are headed?

David Stern: I think we are still going to have the mix of cable and satellite pay per package and networks. And the mix is going to change and evolve as we move down this path. You’re going to see enormously strong products like the Olympics and Monday Night Football remain strong network programming, and you are going to see programming that control audiences on a Sunday or Saturday afternoon in sports time still be attractive to a certain degree to the over-the-air networks.

But then you are going to see a migration to cable, where so much of baseball and hockey and the NBA and actually increasingly even the NFL and college football. You are going to see the packages whether it be ESPN’s College package, or the package of out-of-market games of the NBA, hockey, baseball and the NFL. And then you are going to see the next step, which is that every league is going to have its own programming network, whether it be NBA TV, which we launched several years ago, or other leagues with their entry. It is going to begin to blur the line between digital television and the Internet, where fans will be able to even go deeper, which will allow them to have access to high definition regularly, interactivity and full access to the archives of the various leagues.

It’s going to be a certain kind of a mix, but after it’s almost going to be at a tipping point because right now high definition is something that everyone has been talking about, but all of the sudden many network shows are going to be in high definition. ESPN is going to be developing in high-def, HDNet has high-def and NBA TV is going to be in the first round of the playoffs televising games in high definition. So it’s going to be very exciting as these new opportunities turn to reality and high definition television sets become available, well-priced under $1,000 for Christmas 2003. So it’s still an exciting time even though the mix will change, there will be inducements to fans to be very interested in sports programming. As a result the owners of this programming, including NASCAR – maybe even particularly NASCAR with their in-car cameras and in-car audio tracks and the like – will continue to increase their revenues, I believe. Just from a different mix.

Q: What’s the status of NBA TV and how are you doing with the cable operators and getting them signed up for it?

David Stern: I’m going to make a statement that I want you to call me on, on Labor Day. I expect to have agreements with virtually all the MSO’s for the 2003-04 season to carry NBA TV. We are in intense conversations with enough of them and things are changing everyday in the industry. Each consolidation, each discussion that goes on about whether there should be a separate level of service that includes sports causes us to sort of re-configure our own thinking in terms of the best way to serve our consumers and the cable industry.

Quite frankly, our current thinking has evolved. If we would have made a deal or deals earlier, I’m not sure if they would have been this evolved, to the fact that the whole notion of a sports tier has gained a considerable amount of traction in reality at the MSO’s, and that the sports tier will actually be better penetrated than we would have thought they would have been when we began this journey a year ago. And we find the MSO’s are quite interested in having networks like ours that not only have quality live programming and access to archives that very much reflect the game’s soul and spirit, but offer the addition of high definition and interactivity down the pike. So, we’re actually feeling very good about our prospects. I don’t want to get too specific, but it’s fair to say I had long conversations on the subject with one MSO and meetings with another in person next week and waiting on a draft from a third. So, we’re in the process of exchanging drafts, not in some cases reflecting agreements in principles and in some cases approaches with major MSO’s. We hope to get something done relatively soon to begin the 2003-04 season.

Q: Where do the two stand on licensing fees?

David Stern: I would say that cable operators are reluctant to pay fees and the NBA is reluctant not to get paid fees. And so, someplace in the middle you will see a deal that satisfies both parties.

Q: Any change in the programming next fall on NBA TV?

David Stern: Depending upon the nature of the deals, you’re going to see an increase in original programming, a serious emphasis on more programming in high-definition because the archives can be bumped up, and basketball on all levels, together with original programming, which focuses on the fans of our game and their immediate access to both NBA TV and NBA.com, as they get the opportunity to learn about video games, fantasy games, e-commerce, interactivity.

Q: Will there be more live games next year?

David Stern: There will be more live games next year, but there won’t be more NBA games because there won’t be more than four per week. But there will likely be some additional programming as the international game grows.


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