“We reviewed the offers and selected one that will allow fans to continue to enjoy our unmatched coverage, including the industry’s best live game productions and our iconic studio shows and talent, while strengthening our proven 40-year commitment for many years to come,” the company said. “Our correspondence documents were submitted to the league today. We look forward to the NBA executing our new contract.”
The NBA has “received the proposal from Warner Bros. Discovery” and is “currently reviewing it,” according to a league spokesperson.
Warner Bros. Discovery acquired the broadcast rights under its previous deal with the league, which expires at the end of next season. Those rights allow the company to broadcast games that air on TNT under the current deal.
The question for both the NBA and Warner Bros. Discovery is whether the rights extend to a full streaming package, as has been planned for Amazon. Warner Bros. Discovery also has a streaming service, Max, that it could use to broadcast games.
Amazon Prime Video has twice as many customers worldwide (more than 200 million versus about 100 million for Max), which could make the service a more attractive platform for the league. The streaming rights are global, although Warner Bros. Discovery is bidding only for U.S. rights, according to people familiar with the terms of the deal.
Amazon is also more firmly entrenched as a standalone company, with a market cap of nearly $2 trillion. Warner Bros. Discovery’s market valuation has fallen to about $20 billion, and CEO David Zaslav has repeatedly spoken of interest in more mergers or partnerships, casting doubt on the company’s future. That poses another potential headache for the league, which wants stability among its broadcast partners.
The league also signed deals with Disney and Comcast subsidiary NBCUniversal for two other game packages. Disney and Comcast both have market valuations of more than $150 billion.
If the NBA denies Warner Bros. Discovery the right to match Amazon’s price, it’s unclear what happens next. It’s possible that Warner Bros. Discovery will sue the NBA. It’s also possible that the league will reach a settlement with the company. It’s not yet clear whether the NBA will ask Amazon to pay more for its offer.
One possibility that is not very likely is creating a fourth game package, according to people familiar with the matter. The NBA has discussed creating a fourth package in the past two months, but those discussions fell apart because deals were already in place with Disney, Comcast and Amazon, and those partners were unwilling to give up their inventory, the people said. All three partners plan to pay more for fewer games than the league currently gets from Disney or Warner Bros. Discovery in its current deal.
Disney will pay about $2.6 billion a year for its package, and NBCUniversal about $2.5 billion a year, CNBC reported. Amazon’s deal is worth $1.8 billion a year. The lower price is why Warner Bros. Discovery targeted that game package for its corresponding rights, according to people familiar with the matter.
The NBA also hasn’t wanted to offer too many bundles because it’s sensitive to consumer confusion and limits the number of services fans have to subscribe to, the sources said. While Amazon plans to include NBA games with its Prime subscribers at no additional cost, Max’s sports strategy includes an additional $9.99 per month fee for access to live games on top of a base Max subscription. Warner Bros.
Discovery has not yet decided whether to include NBA games in its basic offering or in its sports offering, according to people familiar with the matter.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
