With the National Basketball Association's media rights nearing finalization, Warner Bros. Discovery is making a move.
The league has sent the official terms of a proposed new media rights deal to Warner Bros. Discovery Inc., opening a five-day period during which the media company can choose to match its broadcast rights package.
A TNT spokesman confirmed the documents and that the company is currently reviewing the terms. Warner Bros. Discovery received the framework for the deal on Wednesday night, according to a person familiar with the matter who asked not to be identified because the details are private.
The media rights deals currently being drafted include three different game-packaging deals with Disney, Comcast's NBCUniversal and Amazon worth a combined $76 billion over 11 years, beginning with the 2025-26 season, and include WNBA games worth $2.1 billion of that total.
Warner Bros. Discovery will pay a fee that matches a package of games set up for Amazon that includes both playoffs and in-season tournaments, according to people familiar with the matter, as first reported by CNBC in May, after Amazon inked a deal with the NBA to pay it $1.8 billion a year for the package.
Next steps unknown
Even if Warner Bros. Discovery formally announces its intention to match, it's unclear what would happen after that. The NBA may or may not have the right to veto Warner Bros. Discovery's matching rights. The league has been in talks with lawyers for months about a possible lawsuit, according to people familiar with the matter.
Turner Sports, a unit of Warner Bros. Discovery, has been the NBA's broadcast partner for nearly 40 years. The company plans to insist that its rights inherited from current media rights deals apply to Amazon's game package, even though it is planned to be a streaming-only service. Warner Bros. Discovery also owns cable network TNT as well as Max, a competitor to Amazon's Prime Video.
Still, Max has fewer subscribers than Prime Video, about 100 million, compared with more than 200 million monthly subscribers worldwide for Prime. NBA rights are only in the US.
TNT is also home to the popular NBA studio show “Inside the NBA,” featuring Ernie Johnson, Charles Barkley, Kenny Smith and Shaquille O'Neal. Barkley has already said he plans to retire from the show after next season, regardless of the outcome of a media rights deal.
“We don't know yet,” NBA Commissioner Adam Silver said at a news conference earlier this week when asked what may or may not happen regarding NBA TV, the NBA's own network operated by Warner Bros. Discovery and TNT Sports. “We'll see.”
Losing the NBA would be a blow to Warner Bros. Discovery, which could lose about $600 million in advertising revenue and potentially cut fees from cable affiliates, Peter Spino, a media and entertainment analyst at Wolfe Research, told MarketWatch earlier this week.
Warner Bros. Discovery shares have fallen 23% this year.
“I apologize that this process has taken so long because I know they are committed to their jobs,” Silver said last month, referring to employees at Warner Bros. Discovery, which produces NBA programming. “I know people who work in this industry. It's a big part of their identity and their families' identity. No one likes this uncertainty. I believe it's the responsibility of the league office to get these negotiations together and get them concluded as quickly as possible.”
Disclosure: Comcast's NBCUniversal is the parent company of CNBC.
