A tricky element with broadcasting deals is that they don’t always just go to whoever offers the most money. Leagues and teams often prioritize how many people they can reach as well, which has been a factor in the slow growth of major streaming exclusives until recently (and is why the NFL is still not going to a streaming-only Super Bowl any time soon). That’s also been shown in moves emphasizing broadcast over cable, such Disney’s increased usage of ABC for big sports events, the emergence of players like ION and The CW, and the shifts of many teams’ local rights to broadcast stations. And it’s now becoming a key part of the discussions about if Warner Bros. Discovery’s TNT Sports will be able to keep NBA rights or not in the next wave of deals.
There have been a lot of discussions recently of WBD potentially winding up on the outside of those deals looking in. That comes with ESPN and Amazon reportedly set with their packages, and with reports that Comcast’s NBCUniversal appears set to beat out WBD for a third package. But a key question there is about incumbent WBD’s “matching rights.” Last month saw reports that both ESPN and TNT Sports had “strong matching rights” by Joe Flint of The Wall Street Journal and Austin Karp of Sports Business Journal. But a piece Thursday from SBJ’s Tom Friend, titled “Sources: NBCUniversal in driver’s seat with NBA media rights negotiations, in line for third package,” raised discussion of if WBD actually is able to “match”:
Sources continue to insist Comcast’s NBCUniversal will capture the third NBA package — and likely unveil a “Basketball Night in America’’ telecast — with its annual bid of $2.5B. Although details are still being massaged with nothing finalized, those sources believe there is little WBD CEO David Zaslav can do to overtake NBC unless he coughs up as much as $2.8B or more to overpay for the package. Or, according to the sources, unless he takes the league to court.
Reports surfaced last month that incumbent WBD exited its exclusive negotiating window with the league believing it could match any bid from NBC or the like, dollar for dollar. However, sources reiterated Wednesday that the NBA believes a dollar-for-dollar match is not enough, that NBC is an over-the-air network with multiple broadcast windows and an RSN infrastructure that WBD cannot replicate.
“NBC has made their bid, and they’re not budging,’’ a media industry source said. “So it’s over, right? And Warner Bros. is saying, ‘We’ll match it,’ and (Commissioner Adam Silver) is probably saying: ‘It’s not matched.’ ’’
…“There’s no mystery to this,” the source said. “It’s pretty blatant what’s happening. [WBD CEO] David Zaslav realizes he has to have this and doesn’t want to pay more than $2.5B. And Adam’s saying, honestly, it’s not matched at $2.5. And [Zaslav] goes, ‘Yes, it is,’ and they’re going back and forth.’ And so that’s where we are. How do you let [WBD] down? Is there a way? Or does Zaslav come up with more money? Because then it doesn’t have to be matching because David’s paid more.”
It is also notable, as Flint tweeted Thursday from a WBD earnings call, that Zaslav seems to believe they have a right to match Amazon’s offer, not just NBC’s:
Warner Discovery CEO David Zaslav keeps mum on TNT-NBA talks. "We are in continuing conversations with them now and we are hopeful we will be able to reach an agreement that maxis sense for both sides," he says, adding it has matching rights for third party offers" which would…
— Joe Flint (@JBFlint) May 9, 2024
There has been an assumption that TNT's NBA matching rights apply only to NBCU's offer but Warner Discovery CEO David Zaslav made a point of saying on earnings call that TNT's matching rights apply to third party offers. That would include Amazon's offer.
— Joe Flint (@JBFlint) May 9, 2024
All three of those companies’ proposals would be significantly different in terms of reach. Comcast’s proposal likely includes broadcast games on NBC, cable games on channels like USA, and streaming-exclusive games on Peacock. WBD doesn’t have a broadcast network, so their proposal is about cable games on TNT and streaming on Max (it’s unclear if it would come with any streaming-exclusive games). Meanwhile, Amazon doesn’t have a linear network at all, but they do have a well-distributed streaming network thanks to their base of Prime users.
The overall pattern with TV rights to date has been that broadcast networks get a discount thanks to their reach, cable networks have to pay more, and streaming-only platforms have to pay more still. But it’s unclear if that kind of platform adjustment is spelled out in any way in WBD’s NBA contract, and Friend’s piece above makes it clear that Zaslav seems to believe a dollar-for-dollar matching offer is sufficient, while Silver disagrees.
If the two sides can’t agree on the specific definition of a match here, this might wind up in court. And that could be messy for everyone involved. It seems more likely it would end with a compensatory payment rather than a specific remedy of taking games from one broadcaster and giving them to another one, but the latter can’t be ruled out, which would make things very awkward for the prospective winner as they try to staff up and prepare for their broadcasts. A court battle also would lead to a lot of negative focus for the NBA and the broadcasters, and perhaps also to some revelations of contract details and/or other information they don’t want out there.
It remains to be seen how this Comcast/WBD battle for NBA rights will play out, and also if there’s potential for TNT Sports to uproot Amazon even if they can’t beat out NBCUniversal. But it doesn’t look like there’s an easy resolution in sight just yet.
