Warner Bros. Discovery (WBD) has faced a significant setback as Warner Bros. loses NBA rights, confirmed by the league in a startling announcement on Wednesday. This blow sent the company’s shares plummeting by nearly 3% in pre-market trading on Thursday, leaving investors reeling.
Warner Bros Loses NBA Rights: Amazon, Disney, and Comcast Secure $77 Billion Deal
This marks a significant setback for Warner Bros., which has been broadcasting NBA games through TNT since 1989. The company has been paying a staggering $1.2 billion annually for these rights, which are set to expire at the end of the next season. The loss not only affects the live game broadcasts but also TNT’s beloved “Inside the NBA” show, featuring retired legends Shaquille O’Neal, Charles Barkley, and Kenny Smith.
After months of intense negotiations that ended on April 22, Warner Bros. couldn’t secure a new deal. The fierce competition to acquire the NBA’s media rights drove up their value significantly.
On Monday, Warner Bros. made a last-ditch attempt by matching Amazon’s bid to continue airing NBA games. Despite their efforts, the NBA confirmed on Wednesday that they had denied Warner Bros.’ offer. “Warner Bros. Discovery’s most recent proposal did not match the terms of Amazon Prime Video’s offer, and we have entered into a long-term arrangement with Amazon,” stated the NBA.
In response, Warner Bros. fired back, claiming, “We have matched the Amazon offer and do not believe the NBA can reject it. We think they have grossly misinterpreted our contractual rights and will take appropriate action.”
The NBA’s new media rights package, worth around $77 billion over 11 years, includes tech giant Amazon (AMZN) and Comcast’s NBCUniversal (CMCSA) as new partners, alongside its current partner, Disney (DIS). NBA Commissioner Adam Silver praised the deal, saying it would “maximize the reach and accessibility of NBA games for fans in the United States and worldwide.”
Amazon secured a streaming rights package for $1.9 billion, covering regular-season and playoff games, the play-in tournament, and a share of the conference finals. Comcast’s NBCUniversal bid $2.5 billion to show about 100 games per season, with half airing exclusively on its streaming service, Peacock. Disney retained its share of the league’s media rights by agreeing to increase its annual payment from $1.5 billion to $2.6 billion, although it will carry fewer games. ABC will remain the exclusive home of the NBA Finals and one of the conference finals for most of the deal’s duration.
The loss of these rights is a significant blow for Warner Bros. TNT boasts the highest carriage fees among the company’s cable networks, at an estimated $3 per subscriber. Jessica Reif Ehrlich, a Bank of America analyst, had previously described the NBA rights renewal as “critical” for Warner Bros.’ future. Without these rights, the company risks losing these lucrative affiliate fees in future negotiations.
As sports rights become increasingly vital for legacy media giants, the competition has intensified. Tech giants like Amazon, Apple, and YouTube have heavily invested in sports streaming deals, driving up costs and challenging traditional media companies. NBA Deputy Commissioner Mark Tatum highlighted the necessity of diverse partnerships in the evolving media landscape, including social, digital, streaming, and traditional media partners.
Warner Bros.’ failure to secure the NBA rights marks a pivotal moment in the media industry, emphasizing the growing influence of tech giants and the shifting dynamics of sports broadcasting.
Comments