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Report: NBA Likely to Agree to Media Rights Package with NBCUniversal, Could Lead to Potential Litigation

As negotiations surrounding the media rights of the NBA continue, reports have indicated that Comcast’s NBCUniversal and Warner Bros. Discovery are both in the running to land its final package. Turner Sports, whose intellectual property and assets are currently within the Warner Bros. Discovery portfolio, has broadcast NBA games since 1984 and includes the award-winning studio show Inside the NBA. Conversely, NBC has not had media rights to the NBA since 2002 and has reportedly bid $2.5 billion for a package of games. The league closed its 90-day negotiating window with its incumbent rightsholders having reportedly reached the framework of a deal with The Walt Disney Company (ESPN/ABC), but not with Warner Bros. Discovery.

While discussions are ongoing between the NBA and Warner Bros. Discovery, the league is reportedly likely to move on from its longtime partner and take a “probable path” of signing a deal with NBCUniversal, as reported by Alex Sherman of CNBC. Warner Bros. Discovery would then have a contractual option that would allow the company to match an opposing offer. Both the NBA and Warner Bros. Discovery are reportedly researching to see if the league can reject a matching bid. Wording in the deal is vague, however, and the answer remains ambiguous as to whether or not it is contractually permitted.

In the situation where Warner Bros. Discovery was to match and the NBA still ended up choosing NBCUniversal, there is the possibility of an ensuing lawsuit. League officials are reportedly concerned about the health of Warner Bros. Discovery’s balance sheet amid a diminishing market capitalization and overall enterprise value. Comcast has a higher market capitalization and enterprise value, and league officials reportedly are more comfortable that the company can pay for the bid.

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A point of conjecture, however, is in whether it would be able to exercise that right towards Amazon’s Prime Video, which reportedly has the framework for a streaming deal in place. During the company’s most recent earnings call, Warner Bros. Discovery president and chief executive officer David Zaslav stated that it could match Amazon’s offer as well, which is reportedly $1.8 billion annually. John Ourand of Puck News recently reported that sources of the matching rights told him that it is not the case.

Warner Bros. Discovery is working with The Walt Disney Company and FOX Corporation on a new joint streaming venture. The name of the venture was revealed to be Venu Sports on Thursday and contains one-third ownership from each media company. The endeavor is facing an antitrust lawsuit from Fubo and is still subject to regulatory approval. It is unknown if or how this platform could be affected if Warner Bros. Discovery was to lose its rights to broadcast NBA games.

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