NBA: Warner Bros. Discovery Plans to Match Amazon's Media Rights Deal

• Amazon has secured the rights to broadcast NBA games, and Warner Bros. Discovery intends to use its matching rights on the package.
• The NBA may not agree to partner with Warner Bros. Discovery for future media rights and could decline the company's offer.
• If the NBA rejects the Warner Bros. Discovery match, the company may sue the league or seek a settlement.

According to a source, Warner Bros. Discovery is aiming to use its matching rights for a set of games that were intended for another company, as it has informed the National Basketball Association of its plans.

To maintain our longstanding partnership, we acted in good faith during both exclusive and non-exclusive negotiation periods, presenting strong bids that were fair to both parties. Unfortunately, the league informed us of its intention to accept other offers for the games in our current rights package, leaving us to proceed under the matching rights provision, which is a crucial part of our current agreement and the rights we have paid for under it, as stated Warner Bros Discovery.

"We have selected one of the offers and will continue to provide exceptional coverage, including top-notch live game broadcasts and renowned studio shows and talent, while maintaining our 40-year commitment to excellence." The company announced. "Our paperwork has been submitted to the league and we eagerly await the NBA's approval of our new contract."

As part of its previous deal with the league, Warner Bros. Discovery obtained the right to match payments for any games aired on TNT during the current season, which will expire at the end of the next season.

Both the NBA and Warner Bros. Discovery are considering if their rights allow for an all-streaming package, similar to what Amazon has established. Additionally, Warner Bros. Discovery owns a streaming service, Max, which could potentially be utilized to broadcast games.

Max has roughly 100 million global customers, while Amazon Prime Video has more than twice as many, with over 200 million customers. The streaming rights for the league are global, according to sources familiar with the contract.

Amazon's market capitalization is nearly $2 trillion, while Warner Bros. Discovery's has fallen to about $20 billion. CEO David Zaslav has expressed interest in more mergers or partnerships, creating uncertainty for the company's future. The league has signed deals with two other broadcast partners, NBCUniversal and Disney, which have market valuations of over $150 billion each.

If the NBA rejects Warner Bros. Discovery's right to match the Amazon package, it's uncertain what will happen next. The company could potentially sue the league, or they could negotiate a settlement. It's unclear if the NBA would request more money from Amazon for its package.

According to sources, the NBA has considered creating a fourth package of games, but negotiations fell through because the existing deals with Disney, Comcast, and Amazon were already in place, and the partners were unwilling to give away inventory. The three partners plan to pay more money for fewer games than the league currently receives from Disney or Warner Bros. Discovery in their current deal.

According to reports, Disney will pay approximately $2.6 billion per year for its package, while NBCUniversal will pay around $2.5 billion per year. Amazon's deal is worth $1.8 billion per year. The lower price tag attracted Warner Bros. Discovery to the games' matching rights, sources claim.

The NBA is hesitant to offer too many packages as it fears confusing consumers and limiting the number of services they need to subscribe to, while Amazon plans to include NBA games with its Prime subscribers at no extra cost, and Max's sports strategy involves an additional $9.99-per-month fee for access to live games on top of a basic Max membership.

Disclosure: Comcast's NBCUniversal is the parent company of CNBC.