Executives at Warner Bros. Discovery believed they had made an acceptable offer to the National Basketball Association.
In April, after months of negotiations, the company offered to pay the NBA billion dollars for the rights to continue airing NBA games on its TNT and Max streaming service. TNT has been showing NBA games since the 1980s, and its “Inside the NBA” show is widely considered one of the best sports studio shows of all time.
But with the end of Warner Bros. Discovery's exclusivity negotiating period looming, the NBA has insisted on changing the package of games the company receives, said two people familiar with the negotiations who spoke on condition of anonymity to discuss the private deal. Warner Bros. Discovery has fought back, and while the two sides continue to negotiate, the company now stands on the brink of losing the rights to a sport that is inextricably linked to it. And on Friday night, Hall of Famer Charles Barkley, the heart of “Inside the NBA,” said he's retiring from television after next season.
“When you think of TNT, the first thing that comes to mind for everyone is the NBA,” former ESPN president John Skipper said.
Media companies, including Warner Bros. Discovery, had been preparing for tough negotiations with the NBA as sports rights remain a highly valuable commodity for traditional TV networks and companies increasingly view them as a way to drive subscribers to their streaming services.
The NBA has made it clear it wants a significant increase from the roughly $2.66 billion it receives on average each year from Warner Bros. Discovery and ESPN under current rights agreements that went into effect in 2016. Executives at both companies knew that if they wanted to keep the NBA's rights, they would have to pay more for fewer games to create a third package of games for the NBA to sell.
ESPN's parent company, Disney, ended an exclusivity negotiating period with an agreement to continue broadcasting NBA games, while NBC and Amazon quickly jumped in and are in talks with the NBA about a package that would include games and additional assets currently owned by Warner Bros. Discovery, three people familiar with the negotiations said. This month, The Wall Street Journal reported that the league was close to a deal with ESPN, NBC and Amazon that would bring in about $76 billion in revenue over 11 years.
As a result, Warner Bros. Discovery has been left watching from the outside, creating tensions within the company.
The public face of that hatred has been Barkley, whose wit and candor have been the driving force behind TNT's critically acclaimed reporting for the past two decades.
Barkley has publicly criticized Warner Bros. Discovery executives for their handling of media rights negotiations, supported the network's rank-and-file employees, given interviews the network did not want and announced after Friday night's NBA Finals that he plans to retire at the end of next season, the final year of his current contract with Warner Bros. Discovery.
“No matter what happens, next year will be my last year on television,” Barkley said. “I want to thank my NBA family, you've all been so good to me, and my heart is full of joy and gratitude, but I plan to hand over the baton at the end of next year.”
Berkley's surprise announcement was the latest development in a saga that began in 2022 when Discovery acquired WarnerMedia, which owns channels including HBO, TNT and TBS, to form Warner Bros. Discovery.
Many, but not all, of WarnerMedia's longtime NBA executives have left the company since Discovery's acquisition, meaning many longtime NBA ties are gone. David Zaslav, who ran Discovery and is now CEO and president of Warner Bros. Discovery, hired Univision executive Louis Silberwasser to run TNT Sports.
The business relationship got off to a bad start after Zaslav made comments at an investor conference in 2022. He said he enjoys the NBA and has known the league's commissioner, Adam Silver, for 20 years. But as a business matter, Zaslav said, “We don't need the NBA.”
The comments unsettled employees at Warner Bros. Discovery, who focus on NBA properties, and combined with reports of the company's financial tightening have raised questions within league offices about the company's commitment to the NBA, said people familiar with the matter who spoke on condition of anonymity.In a radio interview last month on “The Dan Patrick Show,” Barkley said Zaslav's comments would have angered Silver.
Warner Bros. Discovery has a contractual right to match any third-party offers, and the company is likely to try to match Amazon's offer, according to a person familiar with the company's thinking.
But NBA lawyers are still working out how the contracts will define Warner Bros. Discovery's rights, with the company hoping to air many of its games on TNT and Amazon to stream them on Prime Video, according to two people familiar with the negotiations. Complicating matters is the fact that sports streaming was in its infancy when those deals were written in 2014.
Losing the NBA would be a blow to Warner Bros. Discovery, because most of TNT's advertising revenue and viewership comes from NBA games. But it would save the company more than $2 billion a year, which it could use to buy rights to other sports. In recent years, it has added rights to the National Hockey League, NASCAR, the U.S. men's and women's soccer teams, All Elite wrestling and the college football playoffs.
Warner Bros. Discovery is trying to maintain enough high-quality programming on its cable channel to reap the big distribution and advertising revenues, while also moving some of its exclusive programming to streaming services to build out its Max service.
“The streaming industry is in the midst of an evolution,” said Frank Albarella, media and communications vice president at accounting firm KPMG. “Everyone is trying to differentiate themselves. All the old norms are being shaken up. I think the shift to live sports is going to be a game-changer for the sector and the industry.”
For the NBA, cable channels like TNT are losing appeal. Broadcast channels like NBC and ABC, which are seen in more households than cable channels, are gaining popularity again, and streaming has the potential to reach a larger global audience than television. NBC will also use streaming platform Peacock to broadcast NBA games.
Speaking at a June 6 press conference before Game 1 of the NBA Finals, Silver said streaming “allows for so many additional capabilities in terms of viewing the game, personalization, customization of the game, multiple feeds, multiple dialects, multiple languages, different camera angles. It gives fans so many more options that you just can't get with traditional TV.”
He declined to disclose the status of negotiations at the time, but was speaking to employees of the company he still calls “Turner Sports.”
“I apologize that this process has dragged on because I know they are committed to their jobs,” Silver said. “I know people who work in this industry, who work in an industry that is a big part of their identity and their families' identity. Nobody likes this uncertainty. I think it's up to the league office to wrap up these negotiations as quickly as possible and bring them to a conclusion.”
