Source: WSJ
Comcast's NBCUniversal is prepared to pay an average of about $2.5 billion a year to air a package of National Basketball Association games, as rival Warner Bros. Discovery WBD 0.49%increase; green up pointing triangle makes last-ditch efforts to keep those rights, say people familiar with the situation.
Warner's TNT is one of the league's oldest television partners and has paid an average fee of $1.2 billion under its current deal. Warner was unable to reach a new pact with the NBA before an exclusive negotiating window expired last week, which allowed NBC to make a bid.
The package NBCUniversal is bidding on would include playoff and regular season games that would appear on the NBC network, as well as its Peacock streaming service. NBC has discussed carrying two prime-time games a week, something Warner can't offer because it doesn't own a broadcast network.
Sports rights are coveted assets for both traditional media companies fighting to keep cable subscribers and streamers trying to attract and retain customers. The league's discussions with partners for the new round of media-rights deals—which would kick in after the 2024-2025 season and last about a decade—are in the advanced stages.
Disney, the parent of ESPN and ABC, is the other major TV partner and is expected to pay an average per-year fee of about $2.6 billion to renew its deal, the people familiar with the situation said, up from about $1.5 billion a year now.
Each TV partner would air fewer games under their new deals than under the current pacts. The league took some games away from its TV partners during this year's rights negotiations to create a package for a streaming partner. Amazon's Prime Video has already reached the outlines of a streaming rights deal with the NBA.
The league's negotiations with its streaming and TV partners are fluid, and the parties are still haggling over who gets rights to air the most high-profile games and series. Amazon is likely to get a share of the Conference Finals alongside the other partners, and Disney's ABC is on track to retain the rights to the NBA Finals, some of the people said.
Warner's TNT has the ability to try to match rival offers, people familiar with its pact said.
For Warner, the loss of the NBA would be a blow to the strength of its TNT cable network at the same time it is being hurt by cord-cutting and a shrinking advertising marketplace.
TNT still has a heavy roster of sports, including the NCAA March Madness college-basketball tournament, the NHL and Nascar. Without the NBA, though, Warner could have a harder time charging distributors as much for carriage of its channels. Warner's networks currently bring in about $3 a month per cable customer, according to a person familiar with the matter.
Warner Chief Executive David Zaslav has emphasized cost savings and had indicated on calls with analysts that while securing NBA rights is important, the company would be disciplined in its approach to a new deal.
If Warner loses NBA rights, that would injure the planned sports-streaming venture the company is launching alongside Disney and Fox. Carrying NBA games was to be one of its key selling points.
