Jalen Brunson #11 of the New York Knicks drives to the basket during the game against the Indiana Pacers during the second round of Game 1 of the 2024 NBA playoffs on May 6, 2024 at Madison Square Garden in New York City, New York.
Nathaniel S. Butler | National Basketball Association | Getty Images
Warner Bros. Discovery It is considering matching a media rights bid with a host of NBA games as the league looks to finalize terms — but its focus may be on the possibility Amazon package instead of the scheduled games Comcast NBCUniversal, according to people familiar with the matter.
It's the latest twist in Warner Bros.'s relatively messy renegotiation process. Discovery, one of two current NBA rights holders, along with… Disney. Warner's Turner Sports has broadcast NBA games for nearly 40 years.
Warner Bros. said they wanted to remain anonymous because the discussions are private. Discovery continues to look at ways to partner with the NBA to broadcast a range of games as the league plans its next media partners.
The league is close to signing deals with Disney, NBCUniversal and Amazon for three different sets of games, said the people, who asked to remain anonymous because the discussions are private. If this happened without a side agreement with Warner Bros. Discovery, its CEO, David Zaslav, will have the opportunity to cash in on the matching rights that were secured — and paid for — as part of its previous deal with the league.
Under the terms of that agreement, which expires after the 2024-25 season, Warner Bros. Discovery must match a competing offer for games it currently licenses from the NBA. Warner Bros. didn't see it. Discovery is after the potential three-pack because the league has not officially signed agreements with any of its potential media partners. The people also said it had not communicated any plans on whether or not to match with the league.
However, the company is working with its lawyers to determine how the match will work if the league splits the Warner Bros. package. Discovery currently has deals for both NBCUniversal and Amazon.
Amazon reportedly offered $1.8 billion annually for a range of games, while NBCUniversal offered about $2.5 billion annually, according to people familiar with the matter. The association has established frameworks for both deals but has not yet signed the official papers to formalize the bids. When that happens, Warner Bros. will have Discovery has five days to match, according to a person familiar with the contract language.
It's possible that Warner Bros. could pick up the film. Discovery does not match any of the packages, or may seek a side deal with the league for either a settlement or a fourth, smaller package of games. It's unclear whether the NBA will be amenable to either of these 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 Match
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 shows, or at least the parts of them that include existing TNT games, according to people familiar with the company's thinking.
Zaslav said earlier this month during a Warner Bros. quarterly earnings conference call. Discovery: “We've had a lot of time to prepare for these negotiations, and we have strategies in place for the various potential outcomes.” “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, US, June 12, 2023.
Mike Blake | Reuters
This could lead to an NBA deal with NBCUniversal or Amazon or could result in a lawsuit between Warner Bros. Discovery and League. It's not clear whether the league can deny Warner Bros.' matching rights. Discovery if she chooses a different partner.
Warner Bros. is interested in Discovery has a reasonably priced gaming package given its total debt of about $42 billion — more than double its current market cap of about $20 billion — making a potentially destined package for Amazon attractive. That package initially includes the All-Star Games and conference finals games, which were broadcast on TNT, according to a person familiar with the matter.
The NBA wants a strong streaming offering as a third package to expand its product range beyond cable TV. Warner Bros. owns Discovery both cable network TNT and leading streaming service Max, which is expanding globally. The company announced Wednesday that it has struck a deal with ESPN to sublicense College Football Playoff games for five years — with the games broadcast on TNT and streamed on Max.
However, unlike Amazon's Prime Video streaming service, Max plans to disaggregate its sports offerings to customers, forcing them to pay more and potentially reduce access, which the NBA may not prefer.
Zaslav's focus on Amazon is likely a strategic move to gain settlement from the league by focusing on a package specifically designed for big tech streaming players.
The College Football Playoffs deal and the company's recent rights agreement for a package of NASCAR races starting in 2025 put Zaslav in a place where he's content to miss out on the NBA if Warner Bros. management decides to make the cut. Discovery says the cost is too high, according to people familiar with the matter.
Zaslav told colleagues he believes NBCUniversal is overspending on the NBA, based on his company's research into the ratings and potential subscriber value of the 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. could Discovery is using the money saved from not spending on the NBA in other sports, including the UFC, which is likely to sign a new rights deal next year.
NBA on NBC
Zaslav views NBCUniversal as a direct competitor in the struggle for survival among legacy media companies, according to people familiar with his thinking. If NBCUniversal ends up paying too much for the NBA, they said, it would be a competitive advantage for Warner Bros. Discovery.
If Warner Bros. chooses… Discovery matching Amazon's potential package or stepping down altogether, it would pave the way for the NBA to return to working with NBCUniversal, which lost the rights to the league in 2002.
A member of NBCUniversal's music licensing team recently reached out to John Tesh, owner of “Roundball Rock,” the old theme song for “NBA on NBC,” to express interest in returning the song to NBC if the company acquires the media rights. According to a person familiar with the matter.
Like Disney, which owns ABC, NBCUniversal owns a broadcast network in NBC that is free-to-air and can expand gaming ratings. Neither Amazon nor Warner Bros. owns the franchise. Discovery broadcast network.
NBCUniversal also owns Peacock, a local-only streaming service, which could also become a platform for NBA games.
Disclosure: NBCUniversal is the parent company of CNBC.
