The NBA Will See Amazon on the Court, TNT in Court
It's not quite a Paramount/Skydance level-saga, but it's getting there. As expected, the NBA has formally announced its new rights package – $76B+ over 11 years – with the partners being Disney, Comcast, and yes, Amazon. But what about Warner Bros Discovery, home of TNT and most importantly, Inside the NBA? You know, the one that just said it would be matching Amazon's part of the package? That would be a 'thanks, but no thanks'.
From Alex Weprin at The Hollywood Reporter:
The NBA has officially rejected Warner Bros. Discovery, with the league saying in a statement that it will not accept WBD’s offer to match the rights package that the league cut with Amazon.
“Warner Bros. Discovery’s most recent proposal did not match the terms of Amazon Prime Video’s offer and, therefore, we have entered into a long-term arrangement with Amazon,” the NBA said in a statement.
“Throughout these negotiations, our primary objective has been to maximize the reach and accessibility of our games for our fans,” the statement continued. “Our new arrangement with Amazon supports this goal by complementing the broadcast, cable and streaming packages that are already part of our new Disney and NBCUniversal arrangements. All three partners have also committed substantial resources to promote the league and enhance the fan experience.
“We are grateful to Turner Sports for its award-winning coverage of the NBA and look forward to another season of the NBA on TNT.”
That's because WBD has one year left on their deal with the NBA. The new deal starts next year. At that point, there will be no NBA games on any WBD properties. Not TNT. Not Max. Well, unless WBD sues them back into a relationship:
A WBD spokesperson said, “We have matched the Amazon offer, as we have a contractual right to do, and do not believe the NBA can reject it. In doing so, they are rejecting the many fans who continue to show their unwavering support for our best-in-class coverage, delivered through the full combined reach of WBD’s video-first distribution platforms — including TNT, home to our four-decade partnership with the league, and Max, our leading streaming service.
The rep added, “We think they have grossly misinterpreted our contractual rights with respect to the 2025-26 season and beyond, and we will take appropriate action. We look forward, however, to another great season of the NBA on TNT and Max including our iconic Inside the NBA.”
I highlighted the fun bits there. "We look forward, however" is just a great kicker. As for "rejecting the fans" that may resonate more if it didn't seem like WBD played itself here. From Tania Ganguli, Kevin Draper, and Nicole Sperling for The New York Times:
Left on the outside is Warner Bros. Discovery. Because it is a current rights holder, the company had an exclusive negotiating window with the league, but it balked at receiving a different package of games from the one it has now. That added to an already shaky back and forth between the league and the company, which was formed in 2022 after Discovery bought WarnerMedia, whose assets included TNT.
“We don’t have to have the N.B.A.,” David Zaslav, the chief executive of Warner Bros. Discovery, said at an investor conference in 2022. That raised questions in the league’s offices about the company’s commitment to the N.B.A.
At the suggestion of Warner Bros. Discovery — which most likely knew that the N.B.A. was looking for a streaming partner — Amazon’s negotiations began during Warner Bros. Discovery’s exclusive window, according to two people familiar with the discussions, who talked about private details on the condition of anonymity. Warner Bros. Discovery declined to comment about that part of the negotiation.
After Warner Bros. Discovery’s window expired, the N.B.A. quickly moved to secure agreements with Comcast and Amazon. Although Warner Bros. Discovery tried to return to the negotiating table, the league had moved on.
Again, highlights are mine. But they showcase the basic high-level of what seemed to happen here. WBD didn't like what the NBA was offering in the renegotiation – a package which they may or may not have offered because Zaslav's comments about not needing the NBA pissed them off. But the real eye-opener is if WBD did indeed introduce Amazon into the mix – not just inadvertently letting the fox into the henhouse, but inviting them in?
Why? One has to assume the thinking was something like: WBD knew the league was trying to use the streaming angle to "lessen" their own deal by carving out games for a new partner in tech. So they'd offer up that new partner in exchange for a more favorable deal or a comparable one to what they previously had. So WBD may have said something like "these guys can do the streaming component you want, but we want our main package". But they couldn't agree on the money in the exclusive window, so both sides walked with WBD perhaps thinking they could also just match whatever the NBA ended up getting offered. They were, perhaps, calling their bluff. And boy did that backfire.
The NBA ended up getting a far larger offer from Comcast for the package that WBD used to control. And because of the known debt issues at WBD, that would seem to be why they're only now trying to match the smaller Amazon deal versus the bigger Comcast one.
But in the NBA's mind, that Amazon deal is different than the one which WBD previously controlled. While they may have structured it with a large upfront payment to try to make it so WBD was less likely to match – again, cash is king for them – WBD perhaps thought they were clever in securing a new line of credit to match any upfront payment. But the NBA and Amazon had another trick up their sleeves:1
One issue regarding the matching offer was the way the games would be seen. Warner Bros. Discovery offered to simulcast its games on TNT and its streaming service, Max. The league viewed that offer as different from Amazon’s ability to exclusively stream all its games, one of the people familiar with the negotiations said. Amazon’s global streaming reach is also more substantial than Warner Bros. Discovery’s, with Prime having at least twice as many subscribers as Max.
In other words, the NBA is likely saying that WBD is trying to match a streaming-only package by offering a television/streaming mixed package. If that's legally sound (that may end up being for the courts to decide) it puts WBD in a tough spot because they need the TNT element of the package for a wide range of reasons, most notably that it maintains the channel as a vital part of any cable television bundle. Without the NBA, cable companies may seek to drop TNT or at least renegotiate down any carriage fees. Those fees are still critical for WBD. So they can't really afford – quite literally – to go "Max-only" even if they moved Inside the NBA over there.
But even if a judge doesn't buy the streaming-only element of the deal, the international component seems like another huge wrinkle. A key part of the Amazon package are the international rights, something they can offer thanks to Prime Video's availability worldwide, which WBD cannot match. They're starting to roll out Max around the world, but won't have the reach of Prime Video anytime soon. So the NBA/Amazon could argue that if WBD is legally allowed to match monetarily, it would hurt the league in terms of reach.
So now WBD will have to spend the money – again, which they don't really have – to sue the NBA, which is never a good look for someone you're actually trying to partner with. Or they'll use these legal threats to try to get some concessions out of the NBA and its new partners – and not the kind from the stands. Free popcorn won't cut it here. WBD will be looking for either compensation or perhaps some other sports rights that can be traded to them in order to back down.
That's another element in all this. Without the NBA, WBD is also in a more precarious position with regard to the streaming partnerships they cutting, notably with Disney and Fox for Venu. Disney is trying to bolster them by throwing them sports content bones, but WBD is going to need more. They're buying up some smaller rights here and there, but they undoubtedly hoped they could get access to the NFL via a deal with Paramount, which owns CBS. Maybe there's still some sort of deal to be done there, but it wouldn't be as clean with Skydance taking over. And again, WBD perhaps was hovering there thinking/knowing they could just match an NBA deal. But it turns out they may not be able to. Unless they go after Comcast's deal. But they don't really have the money to do that!
Could their sports content buddy Disney help them out in that regard? There's certainly no love lost between Disney and Comcast over the Hulu sale – look no further than the fact that Comcast/NBC is not a part of Venu. Maybe, but the NBA seems pretty happy with the deals they have, they're probably not looking for Disney to rock the boat.
Congrats, Warner Bros Discovery, you played yourself. And turned Amazon into a real player in sports in the process.2
Update July 26, 2024: And sure enough, here's the lawsuit:
Alex Weprin
Update July 27, 2024: Charles Barkley has some thoughts...
M.G. Siegler
1 Reminder that 'NBA' stands for 'Never Bet Against Adam Silver'. Back to NYT:
With the new agreements, the N.B.A.’s revenue will vault ahead of Major League Baseball’s, firmly establishing it as the second-richest sports league in the United States.
2 You know who else would like to be a bigger player in sports? Apple. Just saying...