How the NBA and Comcast Might Be About to Destroy Warner Bros. Discovery

Over the course of just about two weeks, the reporting surrounding the NBA’s negotiations for a new TV deal has been a rollercoaster – and left me alternately supremely confused about the league’s thinking, and that of their potential partners, and worried about what will happen to the league’s longest-running partner.

Unlike the last round of NBA media rights deals, when ESPN and TNT renewed their agreements during their exclusive negotiating window, the league and their partners let the exclusive window lapse this time around – but shortly after the window expired, John Ourand reported in Puck that ESPN had “essentially come to terms” with the NBA on the league’s “A” package, which included continuing to be the exclusive home of the NBA Finals. The next day, Ourand’s former podcast partner Andrew Marchand reported in the Athletic that Amazon had reached a “framework for an agreement” that would give them a package of games as well, giving the NBA games exclusive to a streaming provider for the first time, and also that ESPN would be reducing its package of games from 100 to 80 “in one arrangement” – a surprisingly small reduction that wouldn’t be enough to remove a night of NBA games from ESPN’s schedule for an entire season.

Both of them reported that NBCUniversal remained in the running to fight with TNT over the remaining package, but the combination of the two reports seemed to suggest that NBC was a decided underdog. If ABC was going to retain all of the NBA Finals, that would remove a significant point of interest for any Comcast bid that contained a significant broadcast presence. Any continued presence of Comcast in the bidding would seem to be one that placed a high priority on games on its Peacock streaming service, with any NBC games as an added bonus along the lines of the two games NBC simulcasted with Peacock as part of the service’s “Sunday Leadoff” baseball package over the last two seasons. But now the NBA had reached a deal with Amazon, so its desire for a streaming component to its deals had already been met, and it would be a decided risk to sign a deal for games on another streaming service, one significantly smaller and more unproven than Prime Video, while abandoning a partner of such long vintage in TNT that they’d been airing games since before NBC’s previous stint with the league, one that had long attracted rave reviews for the quality of its coverage, both in-game and with its acclaimed “Inside the NBA” studio crew. Coupled with TNT’s right to match any competing offer, the chances of NBC making its triumphant return to the NBA seemed to have drastically diminished.

ESPN has a bit of a habit of rushing in early in TV negotiations and locking down enough rights to decidedly neuter the desirability of a package for a second partner and ensuring their pre-eminence within the sport. In 2012, it locked up all of their then-three Major League Baseball packages, effectively shutting Fox and NBC out of the packages that might have best boosted their respective sports networks, reducing Fox to giving FS1 Saturday games on crowded sports days with slates not worth airing on the broadcast network and a handful of weeknight games until the postseason. Then there’s ESPN’s current deal with the NHL, where ESPN picked up so much in the way of desirable rights, including ESPN’s choice of conference finals every year (in a league with a nearly two-in-three chance of at least one Canadian team reaching that round), that even with the Winter Classic and three out of seven Stanley Cup Finals still on the table as part of the B package, it was left too undesirable for anyone but TNT to take despite their lack of a broadcast network and existing commitment to AEW on Wednesday nights.

ESPN may well have seen securing all the Finals the same way. Ourand would later suggest that the NBA, famous for signing what’s widely considered the first cable-first deal for a major league when it left NBC for ESPN in 2002, now wanted the reach of a broadcast network for its “B” package. At his former employer, SportsBusiness Journal, Tom Friend reported that the NBA wanted to have ABC alternate the Finals with another partner, which ESPN fought tooth and nail until finally agreeing to pay $2.6 billion for a package with all the NBA Finals. ESPN might well have thought that by taking all the Finals, before most contenders other than TNT could even come to the table, they’d defang the one big attraction any package would have to broadcast networks and something that most would consider table stakes for any broadcast-centric package – ensuring that other than giving a handful of games to a streamer, the NBA wouldn’t have much choice but to perpetuate the status quo, helping to keep the price of all three packages down, and wouldn’t have any options other than ABC to provide that increased reach via broadcast television. That may help explain why TNT allowed their exclusive negotiating window to lapse without a deal, confident they could match any offer any other company could bring to the table dollar-for-dollar.

But both companies may have underestimated Comcast’s determination – and the result may well end up being the death warrant for all of Warner Bros. Discovery. 

On April 29, Joe Flint and others had a blockbuster report in the Wall Street Journal that said NBC was willing to pay a whopping $2.5 billion for a package of games that would include multiple primetime games each week on NBC’s broadcast network – an offer big enough and attractive enough that it was TNT that had reached the point of making “last-ditch efforts” to retain its package. To put that in perspective, that’s only slightly less than the $2.6 billion ESPN was reported to be paying, for a package that wouldn’t include any NBA Finals, which would seem to be the crown jewel of any package. Indeed, it’s more than NBC pays for Sunday Night Football, which you would think would be a more valuable property. The idea of paying in the same realm for the NBA that you would for the NFL might be more reasonable than you think – during the last round of contracts, TNT paid more for the NBA than CBS, Fox, and NBC did for their NFL packages, and ESPN only paid slightly less than what they were paying for Monday Night Football – so $2.5 billion a year might not be as much of an overpay as it sounds and TNT might well have reasonably expected to be asked to pay something in the range of $2.2 billion, but one would think having Amazon in the mix would result in both figures taking a haircut.

WBD head David Zaslav had infamously said in 2022 that the company “didn’t need to have the NBA“, but it’s fair to wonder the extent to which that’s true. Of the five companies with significant sports rights in the United States, WBD is the only one without NFL rights; its coverage of the NBA is what has allowed it to maintain its place among the parent companies of the four broadcast networks. TNT has long been second only to ESPN among national cable networks for the fees it charges distributors, reportedly around $3 a month; last year WBD, off the heels of rebranding the BT Sport networks in Britain as TNT Sports, adopted TNT Sports as the brand for all of its sports programming, regardless of whether it airs on TNT, TBS, or anywhere else. Without the NBA, though, it’s arguably TBS that has the most prominent sports content in WBD’s portfolio with baseball games and, if you count pro wrestling, AEW’s flagship show Dynamite, compared to TNT’s less popular NHL games (plus March Madness games that are shared across all their networks and where TBS is considered the flagship network) – and last I checked, while TBS was still one of the ten most expensive networks on cable, it was still barely half of what TNT charged (and less than USA at a time when USA had very little sports content).

Besides the dramatic loss of revenue, though, is the loss of credibility that losing the NBA would bring. There’s a big difference between “Tier 1” rights that provide must-have programming and “Tier 2” rights that may bring significant audiences, but don’t create an overwhelming demand for your network or streaming service in the same way. Even without the Finals, TNT’s NBA rights provide “Tier 1” content; baseball, with its older, more parochial audience, and TBS’ non-exclusive Tuesday games that typically involve lesser matchups than the weekend series Fox’s Saturday windows and ESPN’s exclusive Sunday night games get to air, doesn’t move the needle nearly as much until the postseason, which only brings audiences to TBS for a single month. Amazon, with NFL and NBA rights, would be a more plausible candidate for the fifth major sports-airing company than WBD, with neither. WBD would go from being a major outlet for sports on par with ESPN, FS1, or the former NBCSN, maybe even ahead of the last one, and in some cases even able to go toe-to-toe with the broadcast networks, to a relic of the peak cable bundle era, its remaining sports rights purely vestigial.

Coupled with the loss of revenue, in an era where sports and other live events are increasingly the only reason for linear television’s continued existence, and given how infamous Zaslav already is for his draconian cost-cutting measures and the total disappearance of original scripted programming from TBS and TNT, it’s fair to wonder how long Warner Bros. Discovery would continue to exist as a separate, going concern. WBD currently has a larger market cap than Fox by $5 billion and over twice the market cap of Paramount, but it’s entirely within the realm of possibility for them to drop behind one or both without the NBA – especially if the loss of the NBA makes it more difficult to keep their other sports rights in the long run. Without “Tier 1” sports, WBD could become a juicy takeover target for another media or tech company, with its impressive portfolio of high-value media properties and voluminous library of movies and live-action and animated television from the Warner Bros. library and the one assembled by Ted Turner in the 70s through the 90s, not to mention the unscripted programming from Discovery’s half of the merger – though the considerable amount of debt the company is saddled with could be a problem. (TBS’ current baseball contract runs through 2028, as does TNT’s NHL deal. The NCAA’s deal with CBS and WBD runs through 2032, but the NCAA is thinking about expanding the tournament and may have left money on the table when it extended its deals back in 2016. If WBD loses the NBA and goes into a downward spiral, it may be fair to wonder whether it’s even able to finish the deal, especially given Paramount’s own chaos. There’s also a recently-signed NASCAR deal, tag-teaming with Amazon, running through 2031, as well as US Soccer games from both national teams through 2030.)

But at the same time, can WBD afford to match NBC’s offer? If NBC is really paying more than the rights are worth, WBD could be stuck with an albatross paying more than they ever actually wanted for a diminished package, with continued cord-cutting reducing the payoff from subscriber fees and reducing the reach of games airing as part of the cable bundle. WBD has been streaming its sports content on Max, but its efforts to launch a paid sports tier have run into various technical problems, resulting in the NCAA Tournament and now the NBA and NHL playoffs being made available to all Max subscribers for free, depriving WBD of not only the revenue from the tier, but the data on how many people are willing to sign up for it, that would help inform whether it’s worth it to match. If you follow the take of Awful Announcing’s Ben Koo, WBD could lose its premier sports property and fall into a death spiral all because of people on the technical side of their streaming operations who may end up being more important to the company than anyone realized – but it may well be that if they do match, they’d lose so much money on the deal that it could put them into a death spiral anyway.

Not helping matters is that, according to Friend, WBD would need to pay as much as $2.8 billion for Commissioner Adam Silver to consider them to have matched NBC’s offer, given the added value the increased reach of broadcast brings, with the alternative being to take the league to court and create bad blood heading into a new package. At the same time he noted the NBA’s desire for broadcast reach, Ourand suggested that WBD’s best hope to retain the NBA might be to team up with another partner – but CBS and Fox have shown zero interest in the NBA throughout this entire process, and while TNT and NBC did team up for NASCAR races in the 2000s, there’s no indication that NBC would be interested in such a team-up now. (The irony, of course, is that Comcast’s acquisition of NBCUniversal was controversial in large part because of the question of whether a cable operator would try to undermine the broadcast network it owned, yet now Comcast is using its broadcast network to muscle out a rival company without one.) It may well turn out that, regardless of the outcome of this negotiation, WBD is the worst-positioned of the five sports-airing media companies of the 2010s and before, being the most invested in the flailing cable bundle without a broadcast outlet to provide increased reach, and with a streaming service that, while in better shape than Paramount+ and Peacock, is still a money pit nowhere near as close to profitability as Netflix or as relatively minor an expense as Prime Video or Apple TV+, and not even operating at the scale of Disney’s streaming operations. As strange as the situation looks now, we may look back and see the demise of WBD as almost inevitable.

But why would NBC pay $2.5 billion a year for a package without any NBA Finals? If WBD would lose money on this deal, why would NBC, without the benefit of people needing to sign up for a cable bundle to watch most of their games, pay this much? Marchand may have proposed the most plausible explanation: that NBA rights would provide a double benefit to Comcast, not only goosing NBC’s retransmission fees and driving Peacock subscriptions, but also saving the cable operator side of the company money by depressing TNT’s subscriber fees. NBC may end up losing money on the deal itself, especially if few to no games end up airing on USA, but if Comcast can save two bucks a subscriber on TNT on top of whatever increased retransmission fees NBC collects, it might just be worth it in Brian Roberts’ mind – especially if WBD falls into a death spiral that takes out a competitor for sports rights and depresses rights fees in the long term. If you look past the lack of Finals, Comcast’s bid could look just reasonable enough for the effects on the cable side to make it worth it.

But on Monday, Ourand came out with new details that made the bid look decidedly less reasonable. NBC would receive a package of weekly games on Sunday nights after the end of NFL season, along with games on Peacock; where a second primetime window on broadcast would fall didn’t seem to be reported on, but Friend reported that NBC could also get rights to ESPN’s Friday night package that they were giving up, though whether that would be for NBC or Peacock, with Sunday night games being doubleheaders, wasn’t clear. TNT, by contrast, would air one doubleheader a week, on Tuesdays during NFL season and moving to Thursdays thereafter. Whoever won between the two companies would also pick up rights to All-Star Weekend, as TNT does now, as well as playoff games, but, notably, would only get a conference final every other year, alternating with Amazon with the other conference final airing on ESPN every year. Granted that splitting two conference finals between three partners was never going to be a trivial enterprise, but the conference finals are generally the most popular non-NBA Finals content the NBA has to offer, especially with All-Star Weekend coming under increased scrutiny for players not taking it seriously, and as if it wasn’t bad enough that the winner between NBC and TNT wouldn’t be getting any NBA Finals, they’d now be getting as much of the conference finals as Amazon while ESPN would be getting twice as much. Throw in Amazon getting rights to the NBA Cup/In-Season Tournament and Play-In tournament, and one might reasonably conclude that NBC and TNT were preparing to pay nearly as much as ESPN for a package that was much closer to the level of what Amazon was paying only $1.8 billion a year for.

It reminds me of how, ever since NBC and the NFL outmaneuvered Bob Iger in 2005, ESPN has paid twice as much as the broadcast networks for what’s generally been an inferior package of games. The NFL has improved the bang that ESPN has gotten for its buck over the years, especially in the most recent contract with ABC re-entering the Super Bowl rotation, but ESPN still only receives a handful of games on par with what the other broadcast networks get on Sundays, despite paying nearly twice as much. Part of what ESPN is paying for is the rights to use NFL highlights across its panopoly of studio shows, but it seems clear that ESPN is really paying a surcharge to the NFL to air games on the lower-reach platform of cable television and to reflect the value that the league brings to ESPN’s subscriber fees. This isn’t quite the same situation, but there might be a comparable dynamic at play. Comcast is willing to pay nearly $700 million more than Amazon for a comparable package of games, and WBD is weighing whether it wants to do the same, because the NBA has told them it has ESPN and Amazon in the fold and they’re now bidding up the price to keep the other from getting it, with WBD’s long-term viability at stake.

To be fair, there is an argument to be made that ESPN should get better playoff rights than the other two partners given what they’re paying. Suppose ESPN and NBC alternated the NBA Finals and also alternated the conference finals, so each year each of them gets either the NBA Finals or the conference finals, but not both. That would mean the biggest events would be split more or less evenly between ESPN and NBC, but NBC is getting All-Star Weekend, so if the partners are getting about the same regular season inventory as well, NBC should arguably be paying more than ESPN in this scenario, though ESPN can close the gap if they retain exclusivity over the NBA’s Christmas Day games (and NBC might only be able to air games on seven or eight weeks of the regular season without competition from or interference with the NFL, and two of those weeks would go up against March Madness). Still, you’d think all of the NBA Finals, and half the conference finals, would be worth more than just $100 million more than what NBC is paying. Simply put, if Comcast, and potentially WBD, are willing to pay this much of a premium for this disappointing of a package, it makes me wonder whether the NBA has sold itself short.

If I were Silver, I would go back to ESPN and tell them to either raise their bid to at least $3 billion, or at minimum, drop down to only getting the NBA Finals and/or a conference final every other year. Amazon I would tell to increase their bid over $2 billion and potentially to top what NBC or WBD would be paying even if Amazon has an inferior package. Streaming is effectively in much the same position cable was in in 2005: a less traditional conduit for delivering sports with questionable reach compared to the competition, but significantly more lucrative. Amazon has nearly three times the market cap of Disney, Comcast, and WBD combined; coupled with my skepticism that the “new audiences” leagues are trying to reach by establishing themselves on streaming are actually that into sports, or that streaming is that great a technology for delivering high-demand live sports to a large number of people at once (even if Amazon is unlikely to ever air an NBA game as popular as the audiences it’s already drawn for Thursday Night Football), if anyone should be paying a premium to the NBA it’s Amazon.

(Amazon may end up increasing their bid anyway. On WBD’s earnings call this week, Zaslav hinted that the company may opt to match Amazon’s bid rather than NBC’s, and if Amazon is getting comparable to better value for less than three-fourths the price, that could be a rather savvy move, pushing Amazon to up their bid to fend off TNT – if they can – and potentially staying with the NBA with a valuable package of games at a substantially cheaper price than NBC if they can’t.)

The calendar of regular-season games each company is bidding for doesn’t make a lot of sense either. If ESPN were giving up its Wednesday night games that would make sense, as ESPN could then make Wednesdays a regular college basketball night on its main network, but Fridays are the deadest night of the week for college basketball. Saturdays are the days that make the most sense for a broadcast network to air primetime games, which is why ABC’s slate of games on that night has become their marquee NBA showcase, with Fridays coming in second. (Which may explain why it’s Friday ESPN is giving up instead of Wednesday, if NBC intends to put games on the broadcast network on that night.) It’s understandable that NBC wouldn’t want to air Saturday night games that might interfere with Saturday Night Live airing on time (and its Sundays are a bit of a dead zone after SNF ends – NBC hasn’t aired any new original programming on the night since March 3rd, when The Wall drew a pitiful .19 rating in the 18-49 demo – though besides March Madness many Sundays would go up against various awards shows, like the Oscars and Grammys, and specials), but instead of that, or ABC retaining their own Saturday night games, that’s the night that Amazon has pinpointed as where they’d like to air their slate of games (which could also mean that ABC, the exclusive home of the NBA Finals, may not even get a day of regular season games to themselves as Sunday afternoons would be all they have left).

This despite the fact that Amazon already airs WNBA games on Thursdays, creating the opportunity to establish that night as “hoops night” outside when TNF is on, and which would be fitting if NBC wins the bidding, as Ernie Johnson’s unwillingness to leave WBD if TNT loses the NBA means Amazon might be the one place that could reassemble the Inside the NBA team anywhere else. Instead TNT wants to have only one night of basketball a week but shuffle it between Tuesdays and Thursdays, creating confusion for viewers, rather than just let Amazon have Thursdays and make Tuesdays its sole basketball night. (Friend did report that Amazon would get Tuesdays or Thursdays in addition to Saturdays, but it’s not clear whether that would still apply if TNT were to bump out NBC.)

In recent years sports leagues with multiple TV partners have prioritized their ability to make money over having a schedule that makes sense to the average viewer. The problem is not the nature or identity of the partners, but how the games are divvied up between them. TBS curbed the perception that they “parachute in” to cover the baseball postseason in their current TV contract by swapping out their Sunday afternoon games, lost in the shuffle of everything else on Sunday afternoons and inevitably inferior to ESPN’s Sunday night games, for Tuesday night games that could be more prominent and would be the best games on their nights, but considering TBS’s games are non-exclusive and generally involve inferior matchups than the weekend series that ESPN gets exclusive rights to on Sunday nights, it still feels like ESPN should be the network that covers one league’s Division Series and League Championship Series, to say nothing of how ESPN airs the wild card series before disappearing for the rest of the postseason and leaving it to TBS and Fox after those networks skipped the wild card round. The NFL’s playoff schedule mostly makes sense, but the existence of Monday night “doubleheaders” – actually overlapping games – split between ESPN and ABC is an obvious kludge to give ABC exclusive games to justify its return to the Super Bowl rotation, since ESPN couldn’t get a full second package of games to air on its cable network while allowing ABC to make a full return to the NFL. Now the NBA may be preparing to make both their regular season and playoff schedules incomprehensible. Besides the situation with the regular season and the conference finals, Friend reports that NBC’s package would include TNT’s rights to the second round, but Amazon would pick up the rights to first round games, which raises the question of what Amazon is doing in the conference finals at all if they’re skipping the second round.

Here’s how I would lay out the contracts if I were the NBA. This might not actually be feasible without knowing all the constraints and desires of the various parties and the reasons for them. This is just what makes sense to a layperson who wants things to be simple, easily intuitive, have reasons behind them that can be easily grasped, and not require a lot of thinking or channel-hopping to figure out what channel a game is on.

• ESPN gets games on Fridays while ABC retains its Saturday night and Sunday afternoon packages.
• Amazon gets games on Tuesdays and Thursdays, with all Thursday games being exclusive to Amazon, as they will reportedly be getting one night a week as it stands (though I’m not sure it’s been reported what night that will be).
• NBC gets a Sunday night doubleheader, as well as Peacock games on Wednesdays.
• If TNT retains its package at the expense of NBC, it gets a doubleheader of games on Tuesdays only, and takes over the occasional Sunday night games ESPN has. Amazon gets games on Wednesdays in place of the Tuesday night slate. If TNT matches Amazon instead, they plug into all of Amazon’s spots both above and below.
• During the playoffs, each partner should get approximately 7-8 games a week in the first round. For NBC that should be the entire Sunday slate and Monday night with Peacock (or USA) getting an extra game on Monday; Sunday afternoon games can be swapped for Saturday night games if NBC has golf commitments in the afternoon. ESPN gets Friday and Saturday games, plus Sunday afternoon games if NBC passes on them, as they do now, while Amazon gets Tuesday through Thursday games. Most if not all first round Game 7s should air on broadcast, or ESPN if absolutely necessary. In the second round each partner should get 4-5 games a week, divided roughly the same way as the first round. If TNT bumps out NBC, they get Sunday through Tuesday nights (with overflow games moving to truTV), Amazon gets Wednesdays and Thursdays (plus one or two Saturday games, and maybe the Friday of the NFL Draft, in the first round), and ESPN gets Fridays, Saturdays, and Sunday afternoons.
• Amazon is the partner that always gets a conference final, with the other conference final going to the partner that does not have the NBA Finals, as suggested above. If TNT bumps out NBC, they alternate a conference final with Amazon and ESPN gets a conference final every year.

Again, it’s entirely possible that it’s too late for this sort of sanity to reign, or even for ESPN and Amazon to increase their bids to at least somewhat better reflect the value they’re getting relative to NBC. But even if it isn’t – even if it was possible to arrange the packages this way – this may well prove to be a monumental moment in sports history and even media history more generally: the beginning of the end for Warner Bros. Discovery as we know it and the remnants of the former Turner Broadcasting empire, and the ascension of Amazon to take its place in the sports broadcasting firmament.