INSIDE.com

It's Not Easy Being Mike: Jordan Is Asked to Carry a Team -- and a League -- on His Back
Look carefully, however, and there are many reasons why the NBA can't oversell the world's greatest basketball player to networks negotiating to carry its games. If he can't make it to playoffs, and play for a while, even his affect will be minimal.
by Warren Cohen

Wednesday, September 26, 2001

Now that the world's greatest basketball player is returning to the court, he's being asked to do the impossible, twice: help the cellar-dwelling Washington Wizards make the playoffs while at the same time saving the National Basketball Association from getting stuffed in its network broadcast negotiations.

The Michael Jordan comeback (part three) arrives at a propitious time for the NBA, which is currently in exclusive talks with its broadcast partners -- NBC and AOL Time Warner's Turner Broadcasting -- to renew television rights agreements. The current four-year deal, signed in 1997, brought the NBA a record $2.64 billion, and over that time fees for all sports have continued to soar. The cost of carrying the National Football League, college hoops, NASCAR and the National Hockey League more than doubled in the last go-round, while even Major League Baseball, where ratings of its crown jewel event the World Series have been setting record lows, got a 73 percent boost.

Of course, all those contracts were negotiated long before the country's downturn became magnified by the prospect of war. Ad gurus are expecting the market to be flat in 2002 after years of healthy gains, which would diminish the ability of networks to get enough revenue to cover any big rise in fees. And regular season NBA ratings have lost some air: a 4.6 average for a regular season NBC game in Jordan's final season in 1997-1998 fell to 2.9 last year. In this uncertain climate, sports broadcasting analysts are unsure how to project the Jordan effect. History would say that economic conditions matter more than the quality of Jordan's play. After all, the NBA's current deal -- which represented a 140 percent boost over the prior agreement -- was signed during MJ's much-touted "Last Dance" tour with the Chicago Bulls during the 1997-1998 season when his retirement seemed imminent. At the time, NBA commissioner David Stern admitted that the league post-Michael would suffer a ratings hit but said, "We think the long-term prospects of our league justify this kind of investment."

And then there is the prospect that Jordan's 38-year old body might not hold up so well in a game dominated by young speedsters like Kobe Bryant and Allen Iverson. Jordan signed a two-year contact with the Wizards, perhaps offering a window into his thinking about how long he'll be playing in this second return from retirement. And any boost from his first year back will be covered under the old broadcast deal. So there's a realistic probability that Jordan will play in one of the years of the NBA's next four-year contract. NBC Sports chairman Dick Ebersol said recently that the basketball playoffs account for 75 percent of the revenue generated by the package. Barring other spectacular feats by Jordan, it's unlikely that even he can lead his team of rookies and castoffs into the playoffs. (Washington went 19-63 last season.) His exclusion from the post-season would therefore greatly diminish his value to the broadcast rights. "Jordan's a positive story when we all need a positive story but I'm not sure it's going to have a dollars and cents effect on TV negotiations," says former network TV sports chief Neal Pilson of Pilson Communications.

Of course, the NBA is certainly hoping for a little of Jordan's magic. A source at the NBA says, "It brings the casual viewer back to the game." Another few seasons of Jordan-addicted viewers could then allow fans more of an introduction to the next wave of NBA stars. (In the process, it would strengthen these players' claims to being the best, since they would have a chance of "dethroning" Jordan, rather than simply taking his place after retirement.) John Mansell, a senior analyst at Kagan World Media, predicted that Jordan's return and the surrounding goodwill by itself would be worth an increase by about 5 percent on top of whatever the NBA would have gotten in licensing fees. (Kagan World Media has the same parent company as Inside.com.)

Absent from Jordan, many analysts expected the NBA's rights fees to increase by a modest 20 percent. (See Inside.com's previous take here.) Of course, that was before the economic situation worsened. The reason for the predicted bump was the presumed interest of ABC and ESPN, who have made noises about going after the NBA package. Their ability to act as a rival bidder and potentially drive up the price may be impaired by the problems with parent company Disney, whose stock has dropped 25 percent since the Sept. 11 attacks on New York and Washington.

While the boardroom negotiations continue, at least Jordan's return to the hardwood should draw some hard-to-wrestle ad dollars. Both NBC and Turner are now adjusting their broadcast schedules to include more Wizards games, an unprecedented scenario for such a lousy team. NBC can televise a maximum of 11 games of any one team while Turner can expand to 15. In the climate, maybe the networks should seek an exemption to broadcast even more.