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Original Issue


Will the Denver Nuggets become the darlings of pay TV?

Bob Wussler was at home in Atlanta on the evening of Sept. 22 when the phone rang. David Stern, commissioner of the National Basketball Association, was on the line. The two are old friends, and after exchanging pleasantries, Stern asked Wussler whether he might be interested in talking to two black businessmen who were hoping to buy a basketball team. Several weeks earlier Bertram Lee and Peter Bynoe of Chicago had agreed to buy the Denver Nuggets for $65 million. In doing so they would become the first black owners of a major league team. But Lee and Bynoe were having trouble with their financing, and the sale suddenly looked as if it might fall through.

Stern wanted the deal to come off, so he called Wussler for help. A former president of CBS Sports and CBS Television, Wussler had spent the past 9½ years as second-in-command at Turner Broadcasting. He left Turner last summer and on Sept. 1 took over as head of Comsat, the video enterprises division of the Communications Satellite Corp., based in Washington, D.C.

Because Lee and Bynoe had already laid much of the groundwork for the purchase, it took the partners only a month to put the particulars together. Comsat would pay $17 million for a 62.5% stake in the Nuggets, while Lee and Bynoe and their investors would put up $8 million for a 37.5% share. The balance of the $54 million purchase price would be financed by the partnership. Comsat would be the majority owner and, with Bynoe and Lee, share the title of general partner. Wussler would have no official title.

The sale of the Nuggets will be remembered because it brought the first black owners to major league sports. But Wussler, for one, hopes the deal will also become known for opening the door for pay-per-view TV.

The key to that door could well be Comsat, a publicly owned company that acts as the U.S. member of Intelsat, a consortium of representatives from 117 countries and territories that operates a network of satellites for international communications. Comsat's main role is to channel U.S. traffic to and from these satellites. The division that Wussler heads uses the satellites to bring pay-per-view movies and other programming into 300,000 hotel rooms around the country. The division has been a big money loser for Comsat, and the company hired Wussler to turn it around.

The Nuggets deal should help. Despite some recent front-office problems—Wussler says they are being ironed out—the team appears to be a good investment. Sports franchises have appreciated wildly in the past decade, and if broadcast revenues for sporting events continue to increase by leaps and bounds and pay-per-view TV gains a strong foothold in pro sports, Comsat could reap big bucks. The company hopes to be able to bring Nuggets games to hotel rooms in the Denver area almost immediately. Such an arrangement is nothing new; four other NBA teams have previously dabbled with local pay-per-view. But Comsat has the technology to take Denver where no franchise has gone before: to put the Nuggets, or any other NBA team, in hotel rooms nationwide. Pay-per-view games could also be brought to bars, hotel lounges and other venues. The Dallas Cowboys were America's Team. Will the Denver Nuggets become the Motel Five?

Wussler is thrilled by Comsat's prospects in the NBA. "We want to supply the league with services," he says. "And we want to do a lot beyond the Nuggets."

Stern is more cautious. Congress has recently been squawking about sports leagues moving games from free TV to cable, and though the NBA's new TV contract actually provides for more free-TV coverage, the commissioner seems leery of anything—such as pay-per-view—that may look like a cutback in free TV. Any national distribution of games must be approved by the NBA, and while Stern says the league may indeed experiment with pay-per-view on a national basis, he is quick to assure NBA fans that in the future they will get their games much as they do now: on free TV and cable. Pay-per-view would add games to the total package.

Pay-per-view has much to offer pro sports: new sources of revenue for franchises and more programming options for fans. It also opens up juicy business opportunities for companies like Comsat. Wussler had been at his new job for only a few weeks when the Nuggets deal came along. Imagine what might happen in a couple of years. "We have lots of ideas," he says. "The only limit is the sky."

Just what you would expect to hear from a guy in satellites.



Bynoe (left) and Lee joined Wussler (right) and Comsat to buy the Nuggets.