Charles Barkley Feels Terrible About the TNT/NBA Divorce
Alex Weprin
Warner Bros Discovery was not happy that the NBA decided to go with NBC and Amazon over continuing to work with TNT on a new sports rights deal. Then the NBA was not happy when WBD tried to match Amazon's offer. Then WBD was not happy when the NBA rejected that offer. Now Charles Barkley is unhappy:
“Clearly the NBA has wanted to break up with us from the beginning. I’m not sure TNT ever had a chance,” Barkley said. “TNT matched the money, but the league knows Amazon and these tech companies are the only ones willing to pay for the rights when they double in the future. The NBA didn’t want to piss them off. It’s a sad day when owners and commissioners choose money over the fans. It just sucks.”
"It just sucks" is the new "that's terrible".
In all seriousness though, Barkley's claim is interesting. He's saying the NBA went with Amazon simply because they knew that down the road they were more likely to pay more money for the next round of rights. That's probably true in that they're certainly more likely to pay more for such rights than WBD, which didn't even want to pay more for these rights and thus, lost their package to Comcast/NBC (Amazon's was a separate, new package, created in part by taking games from the old WBD/TNT package). But the reality may end up being that this was the peak of such rights fees and no one is going to be paying more in a decade, when they're next be negotiating and the current cable (and broadcast) television infrastructure that has boosted such rights over the years will be very different by then, if not over.1
So will Amazon pay more for such rights in 2034? It depends on a number of things, but probably primarily just how big streaming services are at that point, and if there's a robust bidding dynamic between them, just as there has been between the various cable channels for rights. And that may depend on how big the advertising businesses are for those streaming companies at that point, since sports are the key driver of such businesses, since people need to watch them live. Amazon, alongside YouTube, seems to be the leader in streaming advertising right now, so they will probably be incentivized to pay the most for sports rights in that future. But a lot can and will change in a decade.
What if Amazon decides streaming is just too big of a money pit and pulls back or out? I sort of doubt they will, but without question many of the other players are already pulling back spend, and this will alter any bidding scenario. That is to say, the current pure media players, like WBD and Disney and Comcast and probably not going to be paying more for streaming content – I mean they might be overall because of inflation ten years from now, but relatively speaking, we're probably already well past "peak streaming" from a spend perspective.2
So that leaves the other tech players to bolster any bidding environment. Is Netflix going to be paying more for sports then? Undoubtedly, but they also have proven time and time again that they won't go crazy in such regards (and will instead do other, unique and tangential deals). Maybe their business is different enough at that point where they feel like they really need sports to keep growing, or maybe not. Apple will undoubtedly be buying up more sports rights too at that point. And YouTube as well. But again, will it be the same frenzied competition that it has been in an attempt to hold on to viewership in the last days of cable? Probably not.
So yes, I think Barkley is correct that they tech companies are more likely to pay more than the media companies in the next round of negotiations, but I'm not sure that it's more than everyone just paid right now. I think the element that was at least as equally compelling about Amazon to the NBA was the international component. Because if the league can continue to bolster the game around the world, that may lead to a dynamic where they can command more for rights because it's not just a US-only (or mainly-US) thing.
Said another way: the NBA isn't going to become the NFL, the dominant US sports league that drives television, but maybe they think they can become more like the Premier League with a worldwide fan base?
With that in mind, the NBA isn't exactly choosing "money over fans", they're just choosing to try to expand the fanbase, which yes, would ideally lead to more money down the road. It's true that the NBA is screwing over TNT fans, I guess – but those fans undoubtedly mainly exist because of Barkley and his Inside the NBA crew. They can do that show elsewhere. He says they won't after TNT's deal is up after this year. But we'll see. Money tends to win. And you could certainly make an argument that doing the show elsewhere would be better for the fans than, say, retiring because some corporation bungled a deal. That would be terrible.
1 Of course, I've thought that before -- but this is a sort of perfect storm dynamic with the continuing fall of cable but with sports sort of propping up what remains. And the rise of streamers with tech now becoming interested in sports. And NBA commissioner Adam Silver has seemingly played exactly right, timing-wise.
2 Maybe Disney feels the need to continue to spend more just to bolster ESPN as without sports, that service is obviously meaningless. And they're clearly pumping a ton into a wide range of sports streaming opportunties, which may or may not make sense.