NBA TV Rights Talks Heat Up, With Amazon, YouTube Vying to Air Games
League is advancing toward lucrative deals with incumbent partners and is in talks with tech giants as well as NBCUniversal
The National Basketball Association is advancing toward a series of major media deals, with Amazon AMZN -2.11%decrease; red down pointing triangle and Google’s YouTube vying for a new streaming package and NBCUniversal trying to grab one of the main TV deals held by Disney’s DIS -1.27%decrease; red down pointing triangle ESPN and Warner Bros. Discovery’s WBD -2.73%decrease; red down pointing triangle TNT.
Interest is high in the league’s next round of packages, which kick in after the 2024-2025 season. Disney, which pays around $1.6 billion a year for TV rights, and Warner, which pays about $1.2 billion a year, are in discussions to pay substantial increases under a new pact, while airing fewer games than they do now, say people familiar with the conversations.
The robust pricing expected in the deals shows how valuable live sports are to traditional media companies at a time when cord-cutting is shrinking overall TV viewership. Many households maintain cable subscriptions because it is the only way to watch their favorite teams’ games.
Media-rights talks have been happening against the backdrop of the NBA playoffs. Warner Chief David Zaslav sat courtside Monday to watch the New York Knicks prevail in the final seconds against the Philadelphia 76ers, a game that aired on TNT. An exclusive negotiating window for Disney and Warner to renew their deals expired at midnight the same night, clearing the way for the league to have formal negotiations with other suitors as well.
Under their current deals, Disney and Warner carry roughly 165 games combined. Games taken from those incumbents would help the NBA create a new package for a streaming player with nationally televised regular-season games and some playoff contests. The league also could draw on a catalog of locally aired games.
Amazon’s Prime Video, which airs NFL games, has been aggressive in pursuing the streaming package and is viewed by league and media executives as the front-runner. YouTube is also in the mix, those executives say. The streaming package would give a tech giant the right to show games in markets around the world.
Among traditional media companies, NBCUniversal is jostling with Disney and Warner for a package. It is angling for regular-season and playoff games to show on NBC and its Peacock streaming service, as well as rights for NBC to share the NBA Finals with Disney’s ABC, according to some people familiar with the discussions.
Warner Discovery and Disney also have the right to match other offers, people with knowledge of the pacts said. The new deals could include language and terms that would potentially make enforcing a matching right clause challenging.
The NBA discussions are fluid; negotiations with a streamer like Amazon could impact the way final deals are structured with TV partners, for example. Wrapping up and announcing all the deals could take several weeks.
In negotiating new long-term pacts, NBA Commissioner Adam Silver has said the league wants to significantly increase the scale of its rights deals and broaden the ways fans can watch games around the world. It is a strategy the NFL has also pursued, increasing rights fees from its incumbent media partners and crafting new agreements such as its deal with Amazon for “Thursday Night Football.”
Amazon, YouTube and NBCUniversal have invested in sports to boost their respective streaming services.
Retaining NBA rights is a high priority for both Disney and Warner. The league’s content helps them charge high fees to pay-TV distributors like Comcast and Spectrum to carry networks such as ESPN, ABC and TNT.
“What is the alternative programming you would replace those prime-time hours with,” said David Levy, a former Turner president who is now co-chief executive of the advisory firm Horizon Sports & Experiences.
Most scripted shows fail and the cost to market them isn’t cheap, he added. With sports, there is a “built-in fan base and you know pretty closely how the games are going to rate,” he said.
Securing the rights could help Disney and Warner with their respective streaming initiatives. ESPN is launching its own direct-to-consumer version of its popular cable channel and will want NBA games to help drive subscriptions.
Warner and Disney are joining with Fox Corp.on a new sports-centric streaming service set to launch in the late summer or early fall. Having a big chunk of NBA regular and postseason action is expected to be a major selling point for the as-yet unnamed platform.
Some on Wall Street have expressed concerns about media giants’ “sports at any cost” approach. Wolfe Research analyst Peter Supino downgraded Warner Discovery stock to underperform this week, citing the likely cost of a new NBA deal as a factor.