Variety: NBA Rejects Warner’s Bid to Stay in Basketball, Signs Deals With Amazon, Disney, NBCU

Story from Variety:

The NBA has blocked one of Warner Bros. Discovery’s last shots on the clock.

The basketball league on Wednesday rejected Warner Bros. Discovery’s effort to shoulder its way in to a new set of rights packages already crafted for Amazon, Disney and NBCUniversal that will generate an estimated $76 billion over an 11-year period All are slated to begin in the NBA’s 2026 season. To try and stay in the game, Warner Bros. Discovery would have to launch a legal salvo asking courts to decide that the NBA has denied what it believes is its right to match the terms of a package that contains games it would have been able to show under its current pact, which expires after the next NBA season ends in 2025.

“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 league said in a statement.

A spokesman for Warner Bros. Discovery’s TNT Sports was not able to offer immediate comment.

Under terms of the three new pacts, each of which ends after the 2036 season, Disney will retain the NBA Finals exclusively; Amazon will have global rights to 66 regular-season NBA games, including an opening week doubleheader and a new “Black Friday” NBA game; and NBCU will show 100 national regular season games across NBC and Peacock. The deals secure Disney’s sports influence and heighten that of Amazon, which also streams “Thursday Night Football,” and augments NBC’s, which cut ties with the NHL after 2021.

Disney could pay approximately $2.6 billion per year for a smaller passel of games than it currently enjoys, according to people familiar with the talks. Amazon could pay around $1.8 billion per year for a new package that would give the NBA a new foothold with a major streaming platform that has already expanded the NFL’s reach among broadband audiences. And NBCU could pay around $2.5 billion per year under terms that appear to be all but ratified at this point.

The three companies also struck deals to show WNBA games, which could prove to be prescient given a surge in interest in women’s sports. Disney will distribute WNBA games on ABC, ESPN or ESPN2 and stream them on ESPN’s forthcoming direct-to-consumer service; NBCU will distribute its games on NBC, USA Network and/or Peacock; and Amazon will stream its games globally on Prime Video.

The NBA, like the NFL before it, is looking to strike long-term deals that reflect the value of sports in the current media ecosystem. In a fast-growing era of streaming video, sports represent one of the few genres that continue to lure the large, simultaneous crowds that advertisers, distributors and the leagues themselves crave.

Warner Bros. Discovery isn’t on the league’s dream roster. Rights packages have already been negotiated that would have Disney pay approximately $2.6 billion per year under a new 11-year contract for a smaller passel of games than it currently enjoys, according to people familiar with the talks. Amazon could pay around $1.8 billion per year for a new package that would give the NBA a new foothold with a major streaming platform that has already expanded the NFL’s reach among broadband audiences. And NBCU could pay around $2.5 billion per year under terms that appear to be all but ratified at this point.

“Throughout these negotiations, our primary objective has been to maximize the reach and accessibility of our games for our fans,” the NBA said. “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.”

Executives at Comcast, NBCU’s parent, on Tuesday hinted that the NBA’s chosen partners are growing restless at the delay sparked by Warner’s efforts to remain on the court. “We expect to be awarded the deal,” said Mike Cavanagh, president of Comcast, who noted the company didn’t think that the recent Warner Bros. Discovery maneuvering would have much of an impact on the current deal structure.

The NBA’s desired arrangement would leave Warner with a major hole in its sports portfolio and in the schedule of its TNT cable network, a flagship property that relies heavily on sports to lure big audiences. “The NBA is a significant driver of TNT’s affiliate value, and losing out on a key rights package is likely to hinder” Warner’s “leverage in future affiliate negotiations,” said Robert Fishman, an analyst with MoffettNathanson, in a research note issued last week. “Over the past few months, Warner Bros. Discovery has been doling out money to secure incremental sports rights; however, it is unclear if these deals will be able to replicate the value of the NBA in the eyes of distributors.”

Warner Bros. Discovery executives thought they could continue to put on a new show — at least one that would impress NBA negotiators. People familiar with the company’s stance say Warner tried to talk up advantages such as fans knowing how to find games on TNT, and an understanding of how to access them on Max, the company’s streaming service. Moving the games to Amazon, executives pointed out, might confuse audiences who already have a regular habit in place. Warner also touted its “Inside the NBA” studio show, perhaps the best-known news-and-notes program about NBA play in all of sports media.

Still, many sports observers believe Warner Bros. Discovery executives overplayed their hand in negotiations. In remarks to investors delivered in the fall of 2022, Warner Bros. Discovery CEO David Zaslav said he felt Warner Bros. Discovery doesn’t “have to have the NBA” to operate in the media sector. NBA officials have been dismayed by Warner Bros. Discovery’s cost cuts in recent months, including those that removed Warner Bros. Discovery sports executives like Lenny Daniels, the company’s former sports chief, and staffers who worked on “Inside the NBA,” Warner Bros. Discovery’s signature NBA studio show with Charles Barkley and Shaquille O’Neal, among others. Barkley in June vowed to retire from sportscasting after Warner Bros. Discovery’s last season with the NBA ends in 2025.