Warner Bros. Discovery considers matching NBA package slated for Amazon

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Warner Bros. Discovery considers matching NBA package slated for

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Jalen Brunson #11 of the New York Knicks drives to the basket during the game against the Indiana Pacers during Round 2 Game 1 of the 2024 NBA Playoffs on May 6, 2024 at Madison Square Garden in New York City, New York. 

Nathaniel S. Butler | National Basketball Association | Getty Images

Warner Bros. Discovery is considering matching an offer for the media rights to a package of National Basketball Association games as the league looks to finalize terms — but its focus could be on a potential

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package rather than games slated for Comcast’s NBCUniversal, according to people familiar with the matter.

It’s the latest turn in what’s been a relatively messy renegotiation for Warner Bros. Discovery, one of two incumbent holders of NBA rights, along with Disney. Warner’s Turner Sports has carried NBA games for nearly 40 years.

Warner Bros. Discovery continues to consider ways to partner with the NBA to broadcast a package of games as the league plans its next media partners, said the people, who asked not to be named because the discussions are private.

The league is close to signing agreements with Disney, NBCUniversal and

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for three different packages of games, the people said. If that happens without a side agreement with Warner Bros. Discovery, its CEO, David Zaslav, will have a chance to leverage matching rights that were secured — and paid for — as part of its previous deal with the league.

Under the terms of that agreement, which runs out after the 2024-25 season, Warner Bros. Discovery can match a competing bid for the games it currently licenses from the NBA. Warner Bros. Discovery hasn’t yet seen the three potential packages, because the league hasn’t officially signed agreements with any of its potential media partners. It also hasn’t communicated any plans on matching or not matching with the league, the people said.

Still, the company has been working with its lawyers to determine how matching would work if the league carves up Warner Bros. Discovery’s current package into deals for both NBCUniversal and

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.

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has

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for a slate of games, while NBCUniversal has offered about $2.5 billion per year, according to people familiar with the matter. The league has set up frameworks for both deals but hasn’t yet signed paperwork formalizing the bids. When it does, Warner Bros. Discovery will have five days to match, according to a person familiar with the language of the contracts.

It’s possible Warner Bros. Discovery chooses not to match any of the packages, or it may push to strike a side deal with the league for either a settlement or a smaller, fourth package of games. It’s unclear whether the NBA would be amenable to either of those solutions.

Spokespeople for the NBA, Warner Bros. Discovery and NBCUniversal declined to comment. Representatives from

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didn’t immediately respond to a request for comment.

Matching

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If the current slate of NBA games aired on **** is split into two or more packages, Warner Bros. Discovery believes it has the right to match any of those offerings, or at least the parts of them that include the current **** games, according to people familiar with the company’s thinking.

“We’ve had a lot of time to prepare for this negotiation, and we have strategies in place for the various potential outcomes,” Zaslav said earlier this month during Warner Bros. Discovery’s

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“We have matching rights that allow us to match third-party offers before the NBA enters into an agreement with them.”

David Zaslav attends the world premiere of “The Flash”, in Hollywood, Los Angeles, California, U.S., June 12, 2023.

Mike Blake | Reuters

That could gum up an NBA deal with either NBCUniversal or

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or potentially lead to a lawsuit between Warner Bros. Discovery and the league. It’s unclear if the league can ******* Warner Bros. Discovery’s matching rights if it chooses a different partner.

Warner Bros. Discovery is interested in a more affordable package of games given its ****** debt of about $42 billion — more than double its current market capitalization of about $20 billion — making the package that’s likely earmarked for

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appealing. That package tentatively includes All-Star games and conference finals games, which have aired on ****, according to a person familiar with the matter.

The NBA wants a robust streaming offering as a third package to extend the reach of its product beyond cable TV. Warner Bros. Discovery owns both cable network **** and its flagship streaming service, Max, which

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. The company announced Wednesday it had struck a deal with ESPN to sublicense College Football Playoff games for five years — with the games to be aired on **** and streamed on Max.

Still, unlike

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’s Prime Video streaming service, Max plans to

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, forcing them to pay more and potentially diminishing reach, which the NBA may not prefer.

It’s possible Zaslav’s focus on

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may be a strategic move to get a settlement from the league by focusing on a package specifically designed for a big tech streamer.

The College Football Playoffs deal and the company’s recent rights agreement for a package of NASCAR races beginning in 2025 has put Zaslav in a place where he’s content to lose the NBA if Warner Bros. Discovery management decides the cost is too much, according to people familiar with the matter.

Zaslav has told colleagues he believes NBCUniversal is overspending for the NBA, based on his company’s research into ratings and potential subscriber value for a subscription streaming service, according to a person familiar with the matter.

An offer of $2.5 billion or more would more than double the NBA’s previous asking price of $1.2 billion, and the new package would contain fewer games because of the introduction of a third media partner.

Warner Bros. Discovery could use the money saved from not spending on the NBA for other sports, including UFC, which will likely sign a new rights deal next year.

The NBA on NBC

Zaslav views NBCUniversal as a direct competitor in a ****** for survival among legacy media companies, according to people familiar with his thinking. If NBCUniversal ends up paying too much for the NBA, he views that as a competitive advantage for Warner Bros. Discovery, they said.

If Warner Bros. Discovery chooses to match a potential

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package or stand down completely, it would clear the way for the NBA to get back in business with NBCUniversal, which lost league rights in 2002.

A member of NBCUniversal’s music licensing team recently reached out to John Tesh, the owner of “Roundball Rock,” the old “NBA on NBC” theme song, and mentioned potential interest in bringing the jingle back to NBC if the company gets the media rights, according to a person familiar with the matter.

Like Disney, which owns ABC, NBCUniversal has a broadcast network in NBC that is free over-the-air and can expand ratings for games. Neither

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nor Warner Bros. Discovery owns a broadcast network.

NBCUniversal also owns Peacock, its domestic-only streaming service, which could also become a platform for NBA games.

Disclosure: NBCUniversal is the parent company of CNBC.

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