In the coming weeks, the league is set to announce a new game-changing multiyear media rights agreement that will allegedly more than increase its annual fees from TV and streaming outlets to $6 billion following the 2024-25 National Basketball Association season.
The agreement has the potential to shake up the present media environment, since two streaming platforms are reportedly competing for exclusive games. The continuing negotiations may potentially result in the loss of an NBA TV package for Warner Bros. Discovery’s TNT, which has made the league a staple of its programming for more than three decades.
Amazon Prime Video is expected to receive an exclusive games package. It would be the tech giant’s second major sports property, as it already has the rights to NFL “Thursday Night Football” and will stream its first exclusive playoff game next season.
While streaming services have enticed viewers with high-quality original shows and movies, live sports are the most effective way to reach large audiences and expand scale. Amazon’s bid corresponds with its aggressive expansion into the television advertising sector.
Amazon’s huge pockets, boosted by its online retail operation, have allowed it to invest heavily on sports. Meanwhile, legacy media corporations are under pressure to manage rising costs while maintaining diminishing revenues and profitability from their old television businesses.
While Amazon is expected to receive a big package, Walt Disney Co. is likely to maintain rights to the NBA Finals. It would remain one of the crown jewels of television sports, airing on the broadcast network ABC.
ESPN would continue to broadcast regular-season and playoff games. Disney would reportedly pay $2.6 billion per year, up from $1.5 billion under the existing contract, which runs through the 2024-25 season.
Retaining the NBA would strengthen ESPN’s position as it prepares to offer its channels via a new streaming service geared at people without a pay TV subscription. ESPN is set to go direct-to-consumer in 2025.
If Comcast wins at the expense of Turner, it will deal a severe blow to the latter’s parent company, Warner Bros. Discovery, particularly in terms of public image. Warner Bros. Discovery’s stock has fallen over 40% in the last year.
The popular “Inside the NBA,” with co-hosts Charles Barkley, Shaquille O’Neal, Ernie Johnson, and Kenny Smith, has helped shape TNT’s identity throughout the years. (Barkley has already stated that he has the option to leave TNT if the network loses the NBA.)
Representatives from the NBA and the media businesses declined to comment.
Comcast’s offer appears to be focused at strengthening Peacock, which has failed to become profitable despite consistent subscriber growth. The streaming network, which presently has 34 million subscribers, has demonstrated its capacity to manage enormous live audiences. Its coverage of an NFL playoff game in January peaked at 16.3 million concurrent viewers.
Jordan’s Chicago Bulls have reached living rooms across the country. From 1954 to 1962, the network covered the league’s games.
A Comcast deal also would return the NBA to NBC, which held the league rights from 1990 to 2002 and brought the championships of Michael Jordan’s Chicago Bulls to living rooms across the country. The network also carried the league’s games from 1954 to 1962.
NBC reportedly is offering to carry two prime-time NBA games a week, according to the Wall Street Journal, which first reported the bid. Such a commitment demonstrates just how much traditional TV networks desire live sports, which has been a bulwark in the battle to retain viewers and advertising dollars.
Network audiences for scripted comedies and dramas have greatly diminished, as viewers now prefer to watch them on demand through streaming platforms. Viewers still have to make an appointment to view live sports, enhancing their value in the streaming age.
If Comcast gets the NBA, NBC could offer live sports in prime time multiple nights a week, as it already airs “NFL Sunday Night Football” and Big Ten college football on Saturdays.
“It’s indicative of the fact that sports draws a major audience unlike any other programming,” said Lee Berke, head of LHB Sports, Media & Entertainment.
NBC is not alone. Companies with broadcast networks and TV stations are all considering adding live sports to their rosters, as the practice of watching shows in real time fades.
If Turner loses the NBA, there will most likely be doubts about Warner Bros. Discovery’s position in a potential joint venture with Disney and Fox Corporation. In January, the three businesses announced the launch of a streaming network that will carry linear channels including ESPN, TNT, and Fox Sports.
Turner hosts the NHL, Major League Baseball, and the NCAA men’s basketball tournament. But the NBA was an important part of its offering. Without it, Warner Bros. Discovery might end up with a reduced stake in the company, according to people familiar with the discussions.
There may also be long-term implications for Warner Bros. Discovery’s distribution agreements with cable and satellite carriers, who pay fees to carry its programs. The corporation would have to negotiate its next round of contracts without offering the NBA, at a time when such discussions are becoming increasingly heated. Pay TV operators are trying to keep expenses low as their client base shrinks year after year.
“WBD’s management has disclosed that a decent number of network carriage agreements are up for renewal next year, making this a key focus for investors in the days ahead,” wrote analysts from the New York company MoffettNathanson in a client research report.
According to the research, TNT attracts approximately $2.6 billion in subscriber fees, which accounts for 30% of Warner Bros. Discovery’s revenue from pay TV providers in the United States.
People involved with NBA conversations say there is a potential the league may put together a fourth package of games to appease both Comcast and Turner. However, in an already fragmented media ecosystem, this would make it more difficult for consumers to find the next tip-off.
“When you offer up your games on four or five national outlets, it makes it more difficult for the fans to find out where the games are on,” Berke added.
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