Jalen Brunson #11 of the New York Knicks drives to the basket during the game against the Indiana Pacers in Game 2 of the 2024 NBA Playoffs on May 6, 2024 at Madison Square Garden in New York, New York.
Nathaniel S. Butler | National Basketball Association | Getty Images
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 named because the discussions are private.
The league is close to signing deals with Disney, NBCUniversal and Amazon for three different game packages, the sources said. If this happens without a side deal with Warner Bros. Discovery CEO David Zaslav will have the opportunity to leverage the corresponding rights that were secured – and paid for – under its previous deal with the league.
Under the terms of the agreement, which expires after the 2024-25 season, Warner Bros. Discovery can match a competing offer for games it currently licenses from the NBA. Warner Bros. Discovery has yet to see the three potential packages, as the league has not officially signed deals with any of its potential media partners. He also has not communicated plans to pair or not with the league, the sources said.
Nonetheless, the company worked with its lawyers to determine how the match would work if the league split the current Warner Bros. package. Discovery in agreements for NBCUniversal and Amazon.
Amazon reportedly offered $1.8 billion a year for a line of games, while NBCUniversal reportedly offered around $2.5 billion a year, according to people familiar with the matter. The league has frameworks in place for both deals but has not yet signed documents formalizing the deals. When this happens, Warner Bros. Discovery will have five days to correspond, according to a person familiar with contract language.
It is possible that Warner Bros. Discovery chooses not to match any of the packages, or to push for a side deal with the league for a settlement or a fourth, smaller game package. It’s unclear whether the NBA would favor either solution.
Spokespeople for the NBA, Warner Bros. Discovery and NBCUniversal declined to comment. Amazon representatives did not immediately respond to a request for comment.
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 offerings, or at least the parts of them that include current TNT games, according to people familiar with the company’s thinking.
“We’ve had a lot of time to prepare for this negotiation and we have strategies in place for the different potential outcomes,” Zaslav said earlier this month during Warner Bros.’ quarterly earnings conference call. Discovery. “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
This could spoil 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 Warner Bros.’ corresponding rights. Discovery if she chooses a different partner.
Warner Bros. Discovery is interested in a more affordable set of games given its gross debt of around $42 billion – more than double its current market cap of around $20 billion – making the set likely destined for Amazon attractive. That package tentatively includes All-Star games and conference finals games, broadcast on TNT, according to a person familiar with the matter.
The NBA wants a robust streaming offering as a third package to expand the reach of its product beyond cable TV. Warner Bros. Discovery owns both the cable network TNT and its flagship streaming service, Max, which is expanding internationally. The company announced Wednesday that it has reached an agreement with ESPN to sublicense College Football Playoff games for five years — with games to be broadcast on TNT and streamed on Max.
Yet unlike Amazon’s Prime Video streaming service, Max plans to push its sports offerings to its customers, requiring them to pay more and potentially decreasing reach, something the NBA may not prefer.
It’s possible that Zaslav’s focus on Amazon is a strategic move to secure a settlement from the league by focusing on a package specifically designed for a large tech streamer.
The College Football Playoff deal and the company’s recent rights deal for a set of NASCAR races beginning in 2025 have put Zaslav in a situation where he is content to lose the NBA if Warner Bros. management. Discovery decides the cost is too high, according to people familiar. with the case.
Zaslav told colleagues he believed NBCUniversal was spending too much on the NBA, based on his company’s research into ratings and potential subscriber value for a subscription streaming service, according to a person familiar with the matter.
A bid 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 the NBA on other sports, including the UFC, which will likely sign a new rights deal next year.
Zaslav views NBCUniversal as a direct competitor in the fight for survival of traditional media companies, according to people familiar with his thinking. If NBCUniversal ends up paying too much for the NBA, it sees that as a competitive advantage for Warner Bros. Discovery, they said.
If Warner Bros. Whether Discovery chooses to align with a potential package from Amazon or withdraw altogether would clear the way for the NBA to resume business with NBCUniversal, which lost league rights 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,” to express interest in bringing the jingle back to NBC if the company obtains the media rights. according to a person familiar with the matter.
Like Disney, which owns ABC, NBCUniversal has a broadcast network on NBC that is free over the air and can boost audiences for the games. Neither Amazon nor Warner Bros. Discovery does not have a broadcast network.
NBCUniversal also owns Peacock, its national-only streaming service, which could also become a platform for NBA games.
Disclosure: NBCUniversal is the parent company of CNBC.
News Source : www.cnbc.com
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