The NBA’s exclusive negotiating window with Disney (ESPN) and Warner Bros. Discovery (TNT) expires Monday, meaning that the league’s media rights for the 2025-26 season and beyond will hit the open market. What does it all mean?
To begin with, it is no surprise that a deal has yet to be reached. In multiple editions of his Puck newsletter this month, sports business reporter John Ourand has mentioned a timeline of “late spring or early summer” for the new NBA rights deals, and at one point broached “the possibility that talks could stretch into the fall.” The latter possibility would take the rights talks into the start of next season, the final one under the nine-year rights deal that was signed in 2014.
The incumbents
The prospect of a long negotiation should not be considered a sign that the incumbents will part ways with the league. At no point in the years of lead-up to the negotiations has there been any question that ESPN will continue to carry the NBA. The league and network announced their partnership on January 22, 2002 — the day Caitlin Clark was born — and have since renewed twice, in 2007 and 2014.
Disney’s relationship with the NBA is not the love affair the league had with NBC, the perfect pairing of league and network for the Michael Jordan-fueled boom period of the 1990s. Nonetheless, Disney has been on the record repeatedly that it not only wants but needs to remain in business with the NBA. Outside of the NFL, there is no property that ESPN has more invested in than the NBA, both as a source of inventory and topic for its various debate shows.
Turner’s relationship with the NBA goes back much further than that of ESPN — or even NBC — at a full 40 years. When TBS became a national NBA rights partner in 1984, games were still being tape delayed until after the late local news on CBS. Yet while Turner has been a constant of the modern NBA, it entered negotiations under new management that has no preexisting relationship with the league. Since parent company WarnerMedia was spun off into a new, combined venture with Discovery, what was once known as Turner Sports has been under the leadership of David Zaslav — a brash executive whose first salvo in negotiations was to say that his company did not “have to have” the NBA. It is thus no surprise that there has been greater skepticism about Turner’s NBA future.
Yet many of those doubts would seem to have dissipated. For one, the Zaslav-led Turner networks have shown increased commitment toward live sports, adding new rights (NASCAR), new streaming options (via Max and a still-to-come joint venture with ESPN and Fox), and a nightly block of sports programming on truTV. None of these moves qualify as blockbusters, but they are not the work of a company that is winding down its sports operations. While Turner has other notable sports properties, none combines both the inventory and drawing power of the NBA. Without those rights, and with nothing of note coming available any time soon, the newly-rebranded TNT Sports has no future. Even more so than for ESPN, an NBA renewal is an all-or-nothing proposition for Warner Bros. Discovery’s sports ambitions.
While ESPN and TNT are both expected to renew — Sports Business Journal‘s Tom Friend reported last month that the networks and league are 75 percent in agreement on a new deal — it is well-documented that they are not looking to maintain their current suite of rights. Doing so would be cost-prohibitive given the amount of money the NBA is seeking. While reduced inventory is unlikely to mean a reduced rights fee, it would obviously mean a lower rights fee than the networks would otherwise pay.
This too is no surprise. The industry is not the same as in 2014, when ESPN and TNT quickly renewed their NBA deals before competitors Fox and NBC could mount a bid, holding onto their existing inventory at a drastic markup. Fox was about to launch FS1 at the time and was viewed as a serious threat to both networks, while NBC had a cable sports network of its own in NBCSN. A decade later, there is no NBCSN and no threat from Fox, which since selling off most of its assets in 2018 has been considerably less aggressive in pursuing sports rights.
The streamers
The competition this time is on the periphery — broadcast television and streaming, neither of which have yet posed the threat to cable that had been anticipated. Amazon has taken on the air of a sure thing and has shown in the past six months that it remains an active player in the sports rights marketplace, acquiring a package of NASCAR Cup Series races and paying $120 million for an NFL playoff game. Yet for all of the discussion of Amazon, Apple and even Netflix over the years, there is no instance yet of a streamer swiping rights that a linear network deemed essential.
Amazon paid $1.1 billion/year for a Thursday Night Football package that none of the networks were interested in. Amazon, and Peacock before it, picked up an extra NFL playoff game that did not even exist four years ago. Apple and Peacock paid for Major League Baseball rights that had been ceded by ESPN.
If a streamer acquires an NBA package as expected, it may have to play out the same way. ESPN and WBD will have to cut back on their inventory to keep their costs manageable and the NBA will have to add new partners if it wants any chance at the two and three-fold increases in rights fees that have been floated over the past few years. Those complementary needs set up nicely for Amazon (or another streamer) to again swoop in and pick up rights that the traditional networks deem non-essential.
Andrew Marchand of The Athletic reported Monday that Amazon could win a package that includes much more valuable inventory, including “conference finals and perhaps even the NBA Finals at some point over the life of a long-term deal.” If that occurs, it would mark a notable escalation. It certainly makes more sense than paying billions for what would amount to ESPN or WBD’s scraps.
So far, none of the streamers have been the free-spending saviors that might have been expected a few years ago. Then-upstart Fox went from zero sports rights in 1993 to three of the “Big Four” — the NFL, MLB and NHL — three years later. That kind of swashbuckling risk-taking has not been replicated by the major tech companies, who have been selective to the point of caution about acquiring rights. Even Amazon, whose Thursday Night Football deal is by far the most expensive and extensive deal by any streamer, passed on its first chance to add an NFL playoff game last season.
Broadcast television
Broadcast television poses a more substantial threat, but even that is limited. The days of NBC carrying six playoff games on one weekend are not returning, even if “Roundball Rock” does. Should NBC win a second term with the NBA, the ESPN and TNT cable networks are unlikely to lose much of their inventory, which largely consists of weeknight, primetime doubleheaders. ABC on the other hand is a different story.
It does not seem particularly likely that the NBA will have two over-the-air partners airing a full schedule of games, which would be a first for any “Big Four” league — NFL excluded — since the days of “The Baseball Network” in the 1990s. For one, if ESPN is going to give up inventory in its new deal, it would presumably be the ABC games that ultimately contribute less to Disney’s bottom line. Even now, cable television subscriber fees are a better business than broadcast network retransmission fees (or direct-to-subscriber subscriptions).
One need only look at the NASCAR rights deal that begins next year. When NASCAR carved out ten races for new partners WBD and Amazon, incumbents FOX and NBC chose to reduce their broadcast network inventory and preserve the number of races set for their cable networks (FS1 and USA Network respectively). It is easy to imagine ESPN making the same calculation.
It is also the case that the NBA and ABC have never been a good fit. In 22 years as the NBA’s sole over-the-air broadcaster, ABC has held the league at arm’s length. The network for years aired the minimum number of regular season games mandated in its contract — even when ratings were soaring in the “Heatles” era of the early 2010s. It abandoned NBC’s highly-rated Sunday evening (5:30 PM ET) windows as it is unwilling to risk preempting “America’s Funniest Home Videos.” The network’s featured 3:30 PM window is better than nothing, but not even guaranteed. This year will mark the third straight in which ABC chooses to air the F1 Miami Grand Prix in that slot on an NBA playoff weekend, which this year could result in a first round Game 7 airing on ESPN instead.
The above makes sense when one considers that ABC is simply an add-on to what is an ESPN deal. If ESPN could air all of the games, including the NBA Finals, it would. Just look at its College Football Playoff (and previous BCS) deal, which has resulted in college football’s national champion being crowned on cable for 14 consecutive seasons (and two more). Keeping the NBA Finals on broadcast TV is a priority for the league, thus the only option for ESPN to continue airing the event is to carry it on ABC. ESPN executive Burke Magnus has said on the record that ESPN considers the NBA Finals a “must have,” and thus it may be the only ABC inventory that is truly of value to Disney.
That is where NBC may pose a threat. If NBC swoops in and takes ABC’s weekend windows during the regular season and playoffs, it is hard to imagine Disney protesting too much. The NBA Finals may be a step too far. It may not be a dealbreaker, but it is hard to figure what else would be at stake that ESPN could both conceivably lose and desperately want to keep.
As goes without saying, the biggest issue in this deal is not the inventory, but the price tag. When the networks feel pressure, they tend to overpay. That benefited the NBA in 2014. The relative absence of that pressure this time is due to the realities of the industry. Broadcast television and streaming are likely to supplement, not replace, existing cable inventory, and there are few competing cable networks for whom an NBA rights deal makes sense at this time.
It is possible that an NBC deal could include USA Network, but the broadcast network and Peacock are far bigger priorities for Comcast. Perhaps Amazon strikes a bigger deal than expected, as suggested Monday.
Those possibilities do exist, but if ESPN and WBD were overly concerned about losing out to a competitor, they had plenty of time to renew before the rights hit the open market. Either they are not too concerned about the competition or not too concerned about losing the rights. Given the importance of the NBA to both, the latter seems unlikely.
