NBA communicates media guidelines to Warner Bros. Discovery, commencing a five-day evaluation period.
- On Wednesday night, NBA paperwork was received by Warner Bros. Discovery, initiating a five-day window during which the company can exercise its matching rights on a selection of NBA games.
- Warner Bros. Discovery plans to match Amazon's annual gaming package worth $1.8 billion.
As the National Basketball Association media rights are nearing completion, Warner Bros. Discovery is preparing to make its move.
The league has provided official terms for its proposed new media rights contracts to the media company, allowing a five-day window to decide whether to match the broadcasting rights package.
The media rights deal, comprising agreements with NBCUniversal, Turner, and ESPN, encompasses three different packages of games worth $76 billion over 11 years, starting from the 2025-26 season. Additionally, the deal includes WNBA games, valued at $2.1 billion of the total amount.
According to sources, Warner Bros. Discovery plans to purchase a package of NBA games that were originally intended for Amazon, which includes both playoff games and the in-season tournament. It is reported that Amazon signed a deal with the NBA worth $1.8 billion per year for this package.
Next steps unclear
It is uncertain what will occur when Warner Bros. Discovery declares its intention to match. The NBA may or may not have the authority to reject Warner Bros. Discovery's matching rights, and the league has been preparing for a potential lawsuit with its lawyers for several months, according to sources.
For nearly four decades, Turner Sports, a subsidiary of Warner Bros. Discovery, has been a broadcast partner of the NBA. Now, the company intends to assert that its matching rights, which stem from its current media rights agreement, should also apply to Amazon's streaming-only package of games, even though it was initially intended for a streaming service. In addition to its cable network TNT, Warner Bros. Discovery also owns Max, a streaming service that competes with Amazon's Prime Video.
Despite having more than 200 million monthly global subscribers, Prime Video still has fewer subscribers than Max, with approximately 100 million subscribers. The NBA rights are only available in the U.S.
"Inside the NBA," a popular NBA studio show hosted by Ernie Johnson, Charles Barkley, Kenny Smith, and Shaquille O'Neal, is also aired on TNT. Barkley has announced that he plans to retire from the show after the next season, regardless of the outcome of the media rights deal.
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The loss of the NBA could result in a significant financial impact for Warner Bros. Discovery, with potential losses of approximately $600 million in advertising revenue and decreased cable affiliate fees, according to Peter Supino, a media and entertainment analyst at Wolfe Research, as reported by MarketWatch.
Warner Bros. Discovery shares have fallen 23% this year.
"Silver acknowledged the prolonged nature of the NBA programming process at Warner Bros. Discovery, stating that he understands the employees' commitment to their jobs and the impact it has on their families. He emphasized the importance of bringing the negotiations to a conclusion as soon as possible, believing it is the league office's responsibility to do so."
Disclosure: Comcast's NBCUniversal is the parent company of CNBC.
Business News
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