New York Knicks #11 Jalen Brunson drives to the basket during the first round of the 2024 NBA playoffs against the Indiana Pacers at Madison Square Garden in New York City, New York.
Nathaniel S. Butler | National Basketball Association | Getty Images
Warner Bros. Discovery continues to consider partnering with the NBA to broadcast a package of games as the league plans its next media partners, the people, who asked not to be named, said the discussions are private.
The league is close to signing deals with Disney, NBCUniversal and Amazon for three different game packages, he said. If that’s a side deal with Warner Bros. Discovery, its CEO, David Zaslav, will have the opportunity to exercise the related rights that have been secured and paid for. As part of the previous league agreement.
Under that deal, which expires after the 2024-25 season, Warner Bros. Discovery may currently match competitive bidding for NBA-licensed games. Warner Bros. Discovery has yet to see the three potential packages, as the league has not officially signed deals with any of its media partners. He has not announced any plans to join the league or not, the people said.
Still, the company is working with its lawyers to determine how to match Warner Bros. Discovery’s current package with deals for both NBCUniversal and Amazon.
Amazon has it. It is said to give 1.8 billion dollars a year. For the games, NBCUniversal offered about $2.5 billion a year, people familiar with the matter said. The league has drawn up frameworks for both deals, but has yet to sign the paperwork that would formalize the bid. When it does, Warner Bros. Discovery will have five days to match, according to a person familiar with the contract language.
Warner Bros. may choose not to match Discovery with any of the packages, or it could be pushed to negotiate with the league or strike a side deal for a smaller, fourth game package. It is not clear whether the NBA is suitable for either solution.
The NBA, Warner Bros. Spokespeople for Discovery and NBCUniversal declined to comment. Amazon representatives did not immediately respond to a request for comment.
If the current schedule of NBA games on TNT is split into two or more packages, Warner Bros. Discovery believes it has the right to match these offerings, or at least the portions that include current TNT games. People who know the mindset of the company.
“We’ve had a lot of time to prepare for this negotiation, and we have strategies for different possible outcomes,” Zaslav said at Warner Bros. earnings call earlier this month. Quarterly earnings conference call. “We have matching rights that allow us to match third-party offers before the NBA enters into a deal with them.”
David Zaslav attends the world premiere of ‘The Flash’ in Hollywood, Los Angeles, California, US on June 12, 2023.
Mike Blake | Reuters
That could end the NBA’s deal with NBCUniversal or Amazon, or lead to a lawsuit between Warner Bros. Discovery and the league. It’s unclear whether the league could deny Warner Bros. acquisitions rights if it chooses another partner.
Warner Bros. Of its total debt of about $42 billion — more than double its current market capitalization — Discovery is looking for a more affordable package of games for Amazon. That package will tentatively include all of the All-Star games and conference finals broadcast on TNT, a person familiar with the matter said.
The NBA needs a strong streaming offering as a third package to extend the product’s reach beyond cable TV. Warner Bros. Discovery owns both the cable network TNT and the major streaming service Max. It is spreading globally.. The company announced Wednesday that it has reached an agreement with ESPN to license college football playoff games for five years — so that the games can be shown on TNT and streamed in premium.
Still, unlike Amazon’s Prime Video streaming service, Max plans Rate the sporting goods for customersIt could force them to pay more and reduce access, which the NBA may not prefer.
Zaslav’s focus on Amazon could be a strategic move to win a settlement from the league, focusing specifically on a package designed for the big tech streamer.
The college football playoff deal and the company’s rights deal to the NASCAR races package starting in 2025 put Zaslav in a position to be content with losing the NBA if Warner Bros. Discovery management decides the cost is too much. with the case.
Zaslav told colleagues he believed NBCUniversal was overcharging the NBA, based on the company’s ratings and subscriber pricing for the subscription streaming service, according to a person familiar with the matter.
An offer of $2.5 billion or more is more than double the $1.2 billion the NBA had previously asked for, and the new package will contain fewer games due to the introduction of a third media partner.
Warner Bros. Discovery could use the money left over from not spending on the NBA for other sports, including the UFC, which will sign a new rights deal next year.
Zaslav sees NBCUniversal as a direct competitor in the battle for survival among legacy media companies, according to people familiar with his thinking. If NBCUniversal ends up paying too much for the NBA, they say it sees that as a competitive advantage for Warner Bros. Discovery.
Warner Bros. If Discovery chooses to match a potential Amazon package, or quit entirely, it would pave the way for the NBA to return to business with NBCUniversal, which lost the rights to the league in 2002.
A member of NBCUniversal’s music licensing team recently contacted John Tash, owner of “Roundball Rock,” the old “NBA on NBC” theme song, and expressed interest in bringing the jingle back to NBC if the company acquired the media rights. According to a person familiar with the matter.
Like Disney, which owns ABC, NBCUniversal has a broadcast network in NBC that is free-to-air and can expand ratings for games. Amazon or Warner Bros. Discovery does not own the broadcast network.
NBCUniversal also has its local-only streaming service, Peacock, which can be a platform for NBA games.
Disclosure: NBCUniversal is the parent company of CNBC.