Warner Bros. Discovery executives thought they had given the National Basketball Association a proposal it would accept.
In April, after months of negotiations, the company made an offer to pay billions of dollars to the league for the rights to continue showing its games on TNT, as well as its Max streaming service. TNT has shown NBA Games since the 1980s, and its “Inside the NBA” is widely considered one of the best sports studies shows of all time.
But with the end of Warner Bros. Discovery’s exclusive negotiating window approaching, the NBA insisted on changing the game package the company would receive, according to two people familiar with the negotiations, who spoke on condition of anonymity to discuss the private deals. . Warner Bros. Discovery resisted, and although the two sides continued to negotiate, the company now stands on the verge of losing the rights to televise the sport with which it has become inextricably linked. And on Friday night, the beating heart of “Inside the NBA,” Hall of Famer Charles Barkley, said he would retire from television after next season.
“The first thing anyone thinks of when they say TNT is the NBA,” said John Skipper, former president of KeynoteUSA.
Media companies, including Warner Bros. Discovery, were prepared for tough negotiations with the NBA. Sports rights remain an extremely valuable commodity for traditional television networks, and companies increasingly see them as a way to attract more subscribers to their streaming services.
The league made clear it wanted a significant increase from the roughly $2.66 billion total it receives annually, on average, from Warner Bros. Discovery and KeynoteUSA under its current rights deals, which took effect in 2016. Executives at those Companies knew if they wanted to keep the rights to the NBA, they would have to pay more for fewer games so the NBA could create a third package of games to sell.
Disney, KeynoteUSA’s parent company, emerged from its exclusive negotiating period with a handshake agreement to continue broadcasting NBA games. Meanwhile, KeynoteUSA and Amazon quickly jumped in and are both negotiating with the NBA for packages comprised of games currently owned by Warner Bros. Discovery as well as additional assets, according to three people familiar with the negotiations. This month, The Wall Street Journal said the league was closing in on deals with KeynoteUSA, KeynoteUSA and Amazon that would account for about $76 billion in revenue over 11 years.
That leaves Warner Bros. Discovery on the outside looking in, creating a lot of tension within the company.
The public face of that rancor has been Barkley, whose wit and candor have made him a driving force behind TNT’s critically acclaimed coverage over the past two decades.
Barkley has publicly criticized Warner Bros. Discovery leadership for its handling of media rights negotiations. He has supported the network’s rank-and-file employees, done interviews that the network would have preferred him not to do, and, after Friday night’s NBA Finals game, announced that he planned to retire after next season, the last year from Warner Bros. “Discovery’s Current Deal.”
“No matter what happens, next year will be my last year on television,” Barkley said. “I just want to thank my NBA family. You guys have been great to me. My heart is full of joy and gratitude. But I will pass the baton at the end of next year.”
Barkley’s surprise announcement was the latest twist in a saga that began in 2022 when Discovery bought WarnerMedia, whose assets included channels such as HBO, TNT and TBS, and Warner Bros. Discovery was formed.
Many, though not all, of the longtime NBA executives who worked in the NBA for WarnerMedia have left the company since the Discovery purchase. That meant many of the people the NBA had long-standing relationships with were gone. David Zaslav, who ran Discovery and is now CEO and president of Warner Bros. Discovery, hired Luis Silberwasser, a Univision executive, to run TNT Sports.
The business relationship got off to a rocky start after comments Zaslav made at an investor conference in 2022. He noted that he enjoyed the NBA and had known Adam Silver, the league’s commissioner, for 20 years. But as a matter of business, Zaslav said, “We don’t have to have the NBA.”
Those comments worried Warner Bros. Discovery employees focused on its NBA assets and, when combined with reports of financial tightness at the company, raised questions in the league office about the company’s commitment to the NBA. according to people familiar with the reaction who spoke. on condition of anonymity due to the sensitive nature of the situation. In a radio interview with “The Dan Patrick Show” last month, Barkley said he thought Zaslav’s comments probably upset Silver.
Warner Bros. Discovery has the contractual right to match third-party offers. It will likely try to match Amazon’s offer, according to a person familiar with the company’s thinking.
But NBA lawyers are still trying to determine how the contract defines Warner Bros. Discovery’s equivalent rights, according to two people familiar with the negotiations, given that the company would want to show many of the games on TNT and Amazon would stream them on Prime. . Video. It’s an issue complicated by the fact that when these contracts were drawn up in 2014, sports broadcasting was in its infancy.
Losing the NBA would hurt Warner Bros. Discovery because much of TNT’s advertising revenue and a large portion of its viewership come from NBA games. But it would save more than $2 billion a year, money it could use to buy other sports rights. In recent years it has added rights to the National Hockey League, NASCAR, the United States men’s and women’s soccer teams, All Elite Wrestling and the College Football Playoffs.
Warner Bros. Discovery is trying to keep enough high-quality programming on its cable channels to earn big distribution fees and advertising dollars, while also moving exclusive programming to streaming to build out its Max service.
“The streaming industry is in the midst of an evolution,” said Frank Albarella, media and telecommunications executive at accounting firm KPMG. “Everyone is trying to differentiate themselves. All the old norms are being questioned. “I believe this move to live sports can be a game-changer for the sector and the industry.”
For the NBA, cable channels like TNT have lost their shine. Broadcast channels like KeynoteUSA and KeynoteUSA, which reach more homes than cable channels, are back in fashion, and streaming has the potential to reach larger audiences around the world than television. KeynoteUSA would also use its streaming platform, Peacock, to show NBA games.
Silver said during a press conference on June 6, before Game 1 of the NBA Finals, that streaming “allows for tremendous additional functionality when it comes to watching games, game customization, multiple streams, multiple dialects, multiple languages, different cameras”. angles. “It really gives the fan enormous additional options that he doesn’t have through traditional television.”
He declined to provide an update on the negotiations at the time, but addressed employees at the company he said he still called “Turner Sports.”
“I apologize that this has been a long process, because I know they are committed to their jobs,” Silver said. “I know people who work in this industry, it is a big part of their identity and their family’s identity, and no one likes this uncertainty. “I believe it is up to the league office to bring these negotiations to a head and conclude them as quickly as possible.”
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