Warner Bros. Discovery, NBA Settle Legal Battle Over TV Rights
Deal gives company access to NBA content and rights in parts of Northern Europe and Latin America; Turner to license ‘Inside the NBA’ to ESPN
Warner Bros. Discovery WBD -6.49%decrease; red down pointing triangle has settled its breach of contract lawsuit against the National Basketball Association, an agreement that will keep the company in business with the league for at least the next decade, people familiar with the matter said.
The accord gives Warner Bros. Discovery the ability to develop new shows with NBA content in the U.S. and abroad, and international NBA rights in parts of Northern Europe and Latin America excluding Mexico and Brazil.
The deal is expected to be announced early next week.
While Warner Bros. Discovery is losing rights to regular and postseason games for its TNT network after this season, the settlement will give it rights to a significant amount of NBA content domestically and abroad, the people said, and the league will avoid a continued legal battle in court.
Warner Bros. Discovery’s efforts to retain some NBA content even after losing its grip on a long-held rights package underscores how valuable live sporting events are and the lengths media companies will go to keep a piece of the action for their cable and streaming customers.
The company sued the NBA in July after the league signed new rights deals with Disney’s ESPN, Comcast’s NBCUniversal and Amazon.com valued at nearly $80 billion over 11 years. Warner Bros. Discovery alleged that the league violated a matching-rights clause with its TNT cable network by making a deal to put games on Amazon’s Prime Video.
Legal discovery had begun in that case.
Warner Bros. Discovery’s digital platforms, Bleacher Report and House of Highlights, will continue to have access to NBA content. House of Highlights, which focuses on big moments in games, often in near real time, is seen as a potential global growth property for Warner Bros. Discovery, similar to the NFL’s RedZone channel, which shows live action from games.
The company will continue to partner on the NBA’s digital operations for the next several years. That portion of the deal will provide Warner Bros. Discovery with about $350 million in revenue over the length of the agreement, for services, promotion, programming and marketing, people familiar with the terms said.
The new rights deals go into effect next year and would end TNT’s more than three decades as a home for NBA games. Warner Bros. Discovery’s settlement runs 11 years, which is the same term as the league’s rights deals with Disney, Amazon and NBCUniversal.
Separately, Warner Bros. Discovery struck a deal with Disney to license the TNT show “Inside the NBA” to ESPN and ABC starting next season, according to the people familiar with the matter. The show, which features the former players Charles Barkley and Shaquille O’Neal, has an enthusiastic and large following. The show will air throughout the course of the season.
In addition, these people said, ESPN will sublicense Big 12 conference college football and basketball games to Warner Bros. Discovery that it can air on TNT, as well as on its Max streaming service.
That agreement follows a similar five-year deal the two struck in March to share College Football Playoff games, starting with the current season.
The addition of college football, and a new deal for Nascar, are part of the company’s efforts to fill the void that will be left by the departure of the NBA.
Warner Bros. Discovery has major distribution deals coming up and is fighting hard to keep the fees it gets for TNT on par with their current monthly value of around $3 a subscriber. In September, Warner Bros. Discovery signed a new distribution agreement with Charter Communications, the largest pay-TV distributor in the U.S. that kept the TNT price at its current rate, The Wall Street Journal reported.