Jalen Brunson #11 of the New York Knicks drives to the basket during play against the Indiana Pacers during Game 1 of Round 2 of the 2024 NBA Playoffs on May 6, 2024 at Madison Square Garden in the city from New York, New York.
Nathaniel S. Butler | National Basketball Association | fake images
Warner Bros. Discovery is considering matching an offer for media rights to a package of National Basketball Association games as the league seeks to finalize terms, but its attention could turn to a potential Amazon package instead of games scheduled for Comcast NBCUniversal, according to people familiar with the matter.
It's the latest twist in what has been a relatively complicated renegotiation for Warner Bros. Discovery, one of the two current NBA rights holders, along with Disney. Warner's Turner Sports has broadcast NBA games for nearly 40 years.
Warner Bros. Discovery continues to consider ways to partner with the NBA to broadcast a package of games as the league plans its next media partners, said the people, who asked not to be identified because the discussions are private.
The league is close to signing deals with Disney, NBCUniversal and Amazon for three different game packages, the people said. If that happens without a parallel deal with Warner Bros. Discovery, CEO David Zaslav will have the opportunity to take advantage of the equivalent rights they secured (and paid for) as part of their previous deal with the league.
Under the terms of that deal, which expires after the 2024-25 season, Warner Bros. Discovery can match a competing bid for the games it currently licenses from the NBA. Warner Bros. Discovery has not yet seen the three potential packages, because the league has not officially signed deals with any of its potential media partners. It also has not communicated any plans about matching or unmatching the league, the people said.
Still, the company has been working with its lawyers to determine how the pairing would work if the league splits the current Warner Bros. Discovery package into deals for both NBCUniversal and Amazon.
Amazon has reportedly offered $1.8 billion a year for a series of games, while NBCUniversal has offered about $2.5 billion a year, according to people familiar with the matter. The league has established frameworks for both deals, but has not yet signed documents formalizing the offers. When it does, Warner Bros. Discovery will have five days to match, according to a person familiar with the language of the contracts.
Warner Bros. Discovery may decide not to match either package, or may push to reach a side deal with the league for a deal or a smaller fourth package of games. It's unclear whether the NBA would be willing to accept any of those solutions.
Spokespeople for the NBA, Warner Bros. Discovery and NBCUniversal declined to comment. Amazon representatives did not immediately respond to a request for comment.
Amazon matching
If the current slate of NBA games broadcast on TNT is split into two or more packages, Warner Bros. Discovery believes it has the right to match any of those offers, or at least the portions of them that include current TNT games, according to people familiar with the company's thinking.
“We have had a lot of time to prepare for this negotiation and have strategies in place for the various potential outcomes,” Zaslav said earlier this month during Warner Bros. Discovery's quarterly earnings conference call. “We have matching rights that allow us to match third-party offers before the NBA enters into an agreement with them.”
David Zaslav attends the world premiere of “The Flash” in Hollywood, Los Angeles, California, United States on June 12, 2023.
Mike Blake | Reuters
That could derail an NBA deal with NBCUniversal or Amazon or potentially lead to a lawsuit between Warner Bros. Discovery and the league. It's unclear whether the league can reject counterpart rights to Warner Bros. Discovery if it chooses a different partner.
Warner Bros. Discovery is interested in a more affordable game package given its gross debt of about $42 billion (more than double its current market capitalization of about $20 billion), making the package likely to be attractive. destined for Amazon. That package tentatively includes the All-Star games and conference finals, which have been broadcast on TNT, according to a person familiar with the matter.
The NBA wants a strong streaming offering as a third package to expand the reach of its product beyond cable television. Warner Bros. Discovery owns both the TNT cable network and its flagship streaming service, Max, which is expanding internationally. The company announced Wednesday that it had reached an agreement with ESPN to sublicense college football playoff games for five years, with the games to air on TNT and the Max.
Still, unlike Amazon's Prime Video streaming service, Max plans to offer sports deals to its customers, forcing them to pay more and potentially diminishing reach, something the NBA may not prefer.
It's possible that Zaslav's focus on Amazon is a strategic move to get a deal from the league by focusing on a package designed specifically for a big tech streamer.
The College Football Playoffs deal and the company's recent rights deal for a NASCAR racing package beginning in 2025 have put Zaslav in a position where he is content to lose the NBA if management at Warner Bros. Discovery decides the cost is too much, according to people familiar with the matter. with the matter.
Zaslav has told colleagues that he believes NBCUniversal is spending too much for the NBA, based on his company's research into ratings and potential value to subscribers of a subscription streaming service, according to a person familiar with the matter.
An offer of $2.5 billion or more would more than double the NBA's previous asking price of $1.2 billion, and the new package would contain fewer games due to the introduction of a third media partner.
Warner Bros. Discovery could use the money saved by not spending on the NBA for other sports, including the UFC, which will likely sign a new rights deal next year.
The NBA on NBC
Zaslav sees NBCUniversal as a direct competitor in a fight for survival among legacy media companies, according to people familiar with his thinking. If NBCUniversal ends up paying too much for the NBA, it will see it as a competitive advantage for Warner Bros. Discovery, they said.
If Warner Bros. Discovery decides to match a potential Amazon package or pull out entirely, it would clear the way for the NBA to once again do business with NBCUniversal, which lost rights to the league in 2002.
A member of NBCUniversal's music licensing team recently contacted John Tesh, the owner of “Roundball Rock,” the former theme song for “NBA on NBC,” and mentioned possible interest in bringing the jingle back to NBC if the company obtains the broadcast rights. , according to a person familiar with the matter.
Like Disney, which owns ABC, NBCUniversal has a streaming network on NBC that is free over-the-air and can expand ratings for games. Neither Amazon nor Warner Bros. Discovery owns a streaming network.
NBCUniversal also owns Peacock, its exclusively national streaming service, which could also become a platform for NBA games.
Disclosure: NBCUniversal is the parent company of CNBC.
