Warner Bros. Discovery has acknowledged receipt of the framework of new media rights contracts between the National Basketball Association and The Walt Disney Company’s ESPN, NBCUniversal and Amazon’s Prime Video. The 11-year deal reportedly worth a collective $75.9 billion would nearly triple the value of the league’s current deal with Disney and Warner Bros. Discovery, but there is a chance that it does not close as currently constructed. Warner Bros. Discovery intends to utilize a matching rights provision in its existing NBA media rights contract to try and match a package slated for Amazon worth $1.8 billion per year, according to a new report from Alex Sherman of CNBC. The report also avers that the league has been working with its lawyers for several months preparing for potential litigation pertaining to the situation.
The NBA Board of Governors ratified the media rights deal in a meeting on Tuesday, and upon Warner Bros. Discovery receiving terms of the agreements, the five-day window in which it can decide whether or not to exercise the rights provision commenced. Entities owned by Warner Bros. Discovery have broadcast NBA games since 1984, and the potential end to that partnership could complicate the future of Inside the NBA as well. Studio analyst Charles Barkley, who has been on the NBA on TNT broadcast property for over two decades, stated that he will retire next season no matter the outcome of these negotiations. TNT Sports will remain the home of a conference finals, the NBA All-Star Game and exclusive national broadcasts through next season.
Warner Bros. Discovery is going to try and use its TNT linear network at the center of its bid while also offering to stream select games exclusively on Max, according to reporting from John Ourand of Puck News. Although the company’s OTT streaming platform has approximately 100 million subscribers per its last quarterly earnings report, Amazon’s Prime Video reaches over 200 million monthly viewers. Data from Nielsen Media Research demonstrates that both TNT and TBS reach 66 million homes as the pay-TV penetration rate continues to diminish year-over-year with more cord-cutting taking place.
Since the merger of Warner Bros. and Discovery, the company has lost more than two-thirds of its value and currently carries a $39 billion debt load. The company currently has a $20.3 billion market capitalization and could be looking to separate its streaming and studio businesses from linear networks to boost its stock price, a new report from the Financial Times divulged. Bank of America Financial states that 86% of the EBITDA within Warner Bros. Discovery is derived from the Networks group, the total of which was equivalent to $2.102 million for the three months ending on March 31, 2024 with $390 million in free cash flow. The company reports its second quarter financial earnings in early August for a quarter that takes NBA and Stanley Cup Playoffs broadcasts into account.
