Image source: CNBC
Warner Bros. Discovery has informed the National Basketball Association (NBA) that it intends to use its matching rights for a package of games currently designated for Amazon Prime Video. This move aims to retain their long-standing partnership with the league.
In a statement, Warner Bros. Discovery expressed their commitment to the NBA, stating, "We have acted in good faith to present strong bids that were fair to both parties. Unfortunately, the league decided to accept other offers for the games in our current rights package. Therefore, we are proceeding under the matching rights provision, which is part of our current agreement."
The company emphasized the benefits of their continued partnership with the NBA, highlighting their top-notch live game productions and iconic studio shows. They added, "We have matched one of the offers and submitted the paperwork to the league. We look forward to the NBA executing our new contract."
The NBA confirmed that it has received Warner Bros. Discovery’s proposal and is reviewing it. The matching rights were acquired as part of Warner Bros. Discovery's previous deal with the NBA, which expires at the end of the next season. These rights allow Warner Bros. Discovery to match any payment offers for games that aired on TNT.
A key question is whether these rights extend to an all-streaming package like the one planned for Amazon. Warner Bros. Discovery also owns a streaming service, Max, which could be used to air the games. However, Amazon Prime Video, with over 200 million global customers, is a more attractive platform for the league compared to Max's 100 million.
Moreover, Amazon's market capitalization of nearly $2 trillion vastly exceeds Warner Bros. Discovery’s $20 billion. This financial stability makes Amazon a more appealing partner for the NBA, which values stability in its broadcast partners.
The NBA has also secured deals with Disney and Comcast’s NBCUniversal for two other game packages. Both companies have market valuations exceeding $150 billion. Disney will pay around $2.6 billion annually for its package, and NBCUniversal about $2.5 billion. Amazon’s deal is valued at $1.8 billion per year, which is why Warner Bros. Discovery is targeting this package for its matching rights.
If the NBA rejects Warner Bros. Discovery’s right to match Amazon's package, the situation could lead to legal action or a settlement. Crafting a fourth package of games is unlikely, as the NBA prefers not to confuse consumers with too many subscription services.
Amazon plans to include NBA games with its Prime subscription at no extra charge, while Max’s sports strategy includes an additional $9.99-per-month fee for live game access. It is still unclear whether Warner Bros. Discovery will include NBA games in its basic tier or its sports tier.
