Comcast-owned NBCUniversal could acquire rights to NBA game packages when the league's current media deal ends next year.
According to the paper, NBC is preparing a bid of $2.5 billion. wall street journal. The network hasn't aired an NBA game since 2002, but plans to return at a time when live sports rights are taking on new importance in the media industry. Sports rights are some of linear cable's last bastion of viewership, but they have been consistently declining for years as a result of cord cutting and streaming. In the case of Cable His Channel, live sports broadcasts have a ready-made audience that will definitely tune in when they air. Streamers also crave live programming. That's because regular interruptions make it ripe for commercials, allowing ads to be shown to subscribers in ad-supported tiers.
All this has pushed media rights valuations to very high levels. Warner Bros. Discovery's current contract averages around $1.2 billion per year, much lower than what NBC is reportedly offering. NBC's bid likely means Warner Bros. According to the magazine, TNT will not be able to participate in NBA games. wall street journal.
The NBA is considering introducing its first-ever streaming partner to understand the viewing habits of consumers as they move away from cable. As a result, the NBA plans to add a third media partner to its existing television deals with Disney and WBD (or NBC). That means all NBA television broadcasters will have to cut back on the number of games in future media rights deals, even though they will have to pay more money for broadcast rights.
According to current reports, the NBA is in advanced negotiations with Amazon regarding game packages. Amazon CEO Andy Jassy has been open about the company's interest in acquiring more sports rights. Under Jassy, Amazon has already shown a willingness to invest in major blue-chip sports rights, including acquiring rights to the NFL and European soccer. Netflix is also said to be paying attention to the NBA. No company embodies the power of industry-changing streaming more than Netflix, which is rumored to have an interest in the NBA's new in-season tournaments starting this year. If that happens, the entry of major streamers will further weaken traditional television's grip on one of sports' most appealing attributes.
Investors didn't react well to the prospect of WBD missing out on the NBA. WBD stock fell 10% after the news was announced on Tuesday. At the time of writing, the stock is at an all-time low of $7.62. By comparison, stocks of streamers that could be courted by the NBA have soared. Amazon is up 77% over the past 12 months to $182.68, while Netflix is up 71% over the same period to $557.50.
TNT has been broadcasting NBA games since 1984. This is a popular studio program. Inside the NBAFeaturing Charles Barkley, Shaquille O'Neal, Ernie Johnson and Kenny Smith, the show has become a staple of the channel's coverage and a key brand asset for WBD. According to a Bank of America analyst note, losing the NBA rights would be a major blow to WBD as it would make it difficult to negotiate with cable providers.
“Mainstream content, such as the NBA, is typically used as a hook in negotiations with distributors that can potentially increase freight rates for the rest of the portfolio,” the memo said.
That's not to mention the fact that TNT itself is behind the eight-ball in negotiating freight costs. BofA says TNT “earns by far the highest amount of all affiliate commissions.” [WBD’s] Cable Network' costs are estimated at $3 per subscriber. Without NBA game rights, it would be unlikely that such charges would be ordered. Citigroup analyst Jason Bazinet said in a note released Tuesday shortly after the news broke that TNT's fares would drop about 45%, resulting in a loss of about $270 million in advertising revenue. That's what I expected.
The alternative to WBD is to overpay the NBA. Until now, WBD CEO David Zaslav has been reluctant to do so. Zaslav said in 2022 he “doesn't need to have the NBA.” It's unclear whether that was a negotiating tactic or a glimpse into the company's content strategy. Zaslav has since repeatedly softened his stance on the NBA, saying he considers it an important asset for the company. This year, WBD started putting some NBA games on his Max streaming platform. Zaslav said this will help Max differentiate itself by having more live content, such as sports and news channel CNN, that its competitors don't have. Without major sports assets, WBD's plans for sports streaming joint ventures with Fox and Disney could be complicated.
NBC's bid came after WBD's exclusive negotiation period ended on April 22nd. WBD reserves the right to accept any offer, a person familiar with the matter said.
Comcast and NBC could add the NBA to their existing roster of sports competitions, which already includes the NFL and the Olympics. Earlier this year, Comcast took a stab at streaming live sports by broadcasting his NFL playoff games on Peacock. The result was a huge success, with Peacock adding his 2.8 million new subscribers. If Peacock did the same with the NBA, it would further expand Peacock's subscriber base and reduce the likelihood of subscribers leaving the platform, BofA said in the memo. The bank was somewhat modest about the overall benefits of a potential NBC-NBA deal, saying the impact would be “mixed.”
Other broadcast partners for the NBA include Disney across both ESPN and ABC channels. According to the newspaper, Disney plans to renew the NBA broadcast rights contract for about $2.6 billion annually, an increase from the current $1.5 billion it pays. wall street journal. Disney currently owns some of the league's best assets, including the NBA Finals, which will be broadcast on ABC.
WBD declined to comment. The NBA, NBC, Amazon and Netflix did not respond to requests for comment.
