NBA media rights hit the open market a week ago Monday, and by Friday a clear picture had emerged of the state of play. ESPN will keep a reduced version of its “A” package, including the NBA Finals. Amazon will acquire a package for Prime Video that includes playoff games. Warner Bros. Discovery and Comcast (NBC) will battle over, or perhaps split, the rest. Heading into week two of the NBA’s media rights free agency, what questions have been answered and which ones remain?
Are the ESPN and Amazon deals official?
While the social media headline from The Athletic stated outright: “Amazon acquires NBA broadcast rights,” the actual reporting by Andrew Marchand was less definitive. Amazon has merely reached a “framework agreement” with the NBA. John Ourand of Puck used the same language regarding ESPN’s expected renewal. A “framework agreement,” which is a specific term in contract negotiations, is not an official, signed deal. It is akin to a letter of intent stating that the sides plan to move forward with a relationship, but it is non-binding. If highly unlikely, it is still possible that the agreements fall apart.
That the NBA has already reached such agreements with two companies is a mark of rapid progress. As recently as last Monday night, it was considered surprising that ESPN and WBD had reached “handshake agreements” with the league. (A handshake agreement is less formal and less enforceable.) There were reports that negotiations could stretch into the late summer or even fall, and while that remains possible, it certainly does not seem particularly likely at this point. Yet whether a handshake or framework, none of these agreements are official, signed deals.
There is a habit, noted by some observers, of characterizing that which is ‘almost done’ as ‘done.’ When ESPN and the College Football Playoff were said to have reached agreement on a new deal earlier this year, the CFP still had yet to agree to a format beyond 2025 and ESPN had the right to pull its offer in the event that those negotiations fell through. It seems unlikely that anything could trip up the ESPN and Amazon deals, but as long as it is possible one can rule nothing out.
Is the NBA on TNT going away?
It would be a bitter irony if the cost of the NBA returning to NBC was the loss of TNT, but with ESPN and Amazon in line to acquire the NBA’s primary and third packages, respectively, the only inventory left for bid belongs to Warner Bros. Discovery. All of the reporting from last week either heavily implied or stated outright that WBD and Comcast will battle over the remaining rights. WBD has an advantage as the incumbent, and as mentioned previously, Ourand reported last week that WBD (and ESPN) were on the brink of “handshake agreements” with the NBA to continue as rights partners. Moreover, WBD (and ESPN) have the ability to match any third-party bid. Those factors certainly point to WBD being in the proverbial catbird seat and NBC’s absence from the NBA extending into a third decade.
At the same time, money talks. Comcast could either offer the NBA more than WBD is willing to match or, as has been suggested in reporting, structure its expected offer in such a fashion as to make matching difficult (e.g. with poison pills).
While the expectation seems to be that the NBA will move forward with three packages, much of the reporting over the past week has left open the possibility that the league might go with four. There is recent precedent for this exact set of circumstances, as NASCAR went to market with three packages last year and ended up with a fourth. The difference is that NASCAR created that fourth by peeling additional races off of its “A” and “B” packages. It is not clear how the NBA would split a “B” package that is already shedding inventory to accommodate a third partner.
Imagine that the “B” package would go for $1.6 billion per year and include most of what WBD currently owns: the All-Star Game, an annual conference final, regular season games and most of the playoffs. Now split that in two. Does the combined value of what Comcast and WBD would pay equal $1.6 billion? Perhaps. While David Zaslav made waves two years ago for saying that WBD does not “have to have” the NBA, it is hard to imagine what the future is of the company’s domestic sports division without its anchor property. Maintaining some level of partnership, even for just half of an already reduced pie, may be worth what would ultimately be a reduced rights fee. Such a deal may have value for Comcast as well if it means a consistent slate of regular season and playoff games for Peacock. (Then again, Comcast felt that a mere $30 million was too high a price for weekly regular season baseball games on Peacock.)
It is of course more likely that WBD or Comcast will acquire that final package, not both. In that event, signs point to WBD. TNT is the incumbent, has a far longer history with the NBA, and has run the league’s digital media and NBA TV for going on 20 years. (Which also begs the question of what happens to said digital media and NBA TV if WBD is ousted.) While nearly all of that predates the Zaslav-WBD era, it is not exactly as if Dick Ebersol is running negotiations for NBC. (Though the NBA does have an extensive history with NBC Universal chairman Mark Lazarus from his time at Turner.) If relationships matter, the NBA still has stronger ties to WBD than to a Comcast-run NBC.
What happens with local rights?
Andrew Marchand’s report on Amazon’s framework agreement with the NBA omitted any mention of local rights, which have been widely discussed as a potential element of the deal. The NBA struck a deal last year to win back all of the local rights held by Bally Sports at the end of this season, but that was undone after Bally parent company Diamond Sports Group struck a last-minute deal with Amazon to distribute games via Prime Video. Thus, it is not clear what local rights the league can offer.
Ourand reported in Puck last week that Google is a contender to acquire NBA League Pass (The Wall Street Journal also reported Google was a contender, but for the third package of games now likely to go to Amazon). In the event that Google picks up League Pass, it is fair to question how much Amazon would value local in-market rights if those games are distributed nationally by one of its primary rivals.
Will anything change on the broadcast network side?
If NBC is left on the outside looking in, it is hard to imagine what, if anything, will change regarding the NBA’s broadcast television exposure. The decline of cable has been met with the expectation that broadcast television will gain back some of the inventory it lost throughout the 2000s and 2010s. Yet the broadcast renaissance has been incremental at best. A few championship events, most notably the NCAA women’s basketball title game and (starting in 2026) the College Football Playoff National Championship, have made the move from cable to broadcast. Yet no property has made the kind of wholesale shift from cable to broadcast that the NBA made in reverse back in 2002, shifting dozens of games from NBC to ESPN.
A deal with Comcast would likely involve more games on broadcast television. While Comcast is synonymous with cable, the company has shifted to broadcast (NBC) and streaming (Peacock) as its primary distribution methods for live sports, shuttering NBCSN. USA Network has picked up a number of the properties that used to air on NBCSN — the Premier League, NASCAR, IndyCar even A-10 basketball — but it tends to be an afterthought. In the event that Comcast acquired WBD’s “B” package, it would seem almost certain that any deal would include NBC either joining or replacing ABC as the league’s primary broadcast network.
Among the major broadcast networks, ABC is uniquely protective of its news and entertainment programming, unwilling to countenance even the slightest possibility of sports overrun. The NCAA women’s basketball national title game, which averaged nearly 19 million viewers this year, aired early enough that there was little to no possibility that it could run over into the 6 PM ET newscasts — much less the start of primetime at 7. (Even ending at 5:30 PM ET was not enough, as the first seconds of postgame coverage were abruptly cut off in favor of paid programming in much of the country.) That is how ABC handled television’s largest basketball audience in five years.
As ESPN is incentivized to keep most of its programming on its cable networks, and ABC is reluctant to give up evening and primetime for sports, there has been a limit on the NBA’s broadcast exposure for the past 22 years. Over that span, not a single Sunday afternoon NBA game on ABC has bled into primetime — the closest being a Thunder-Lakers game late in the 2011-12 lockout season that ended at 6:48 PM ET. NBC, which for years made 5:30 PM the NBA’s marquee timeslot, would presumably free up better timeslots for the league.
Yet that is dependent on Comcast outbidding WBD or the NBA finding a way to bring in both, neither of which are a sure thing. If the NBA moves forward with ESPN, WBD and Amazon, it is entirely possible the league will have less over-the-air exposure moving forward. ESPN is paring back its schedule to accommodate the new, third package and it would not be surprising if most of the games it drops are from the ABC portion of the schedule. One need only look at last year’s NASCAR deal, in which all of the inventory incumbents FOX and NBC gave up came from the broadcast network portion of their schedules.
Is Netflix seriously still an option?
There has been speculation that the NBA would sell rights to its In-Season Tournament or Play-in Tournament separately and that Netflix may be a contender. Perhaps that might constitute the “fourth” package that has been floated. Nonetheless, there is considerably less smoke surrounding this possibility. Ourand, who reported last year that Netflix was interested in the In-Season Tournament, wrote last week that the NBA is still in communication with Netflix (and Apple). That is a far cry from a framework agreement, to say the least.
What will the money look like?
It is unlikely the NBA will reach the $75 billion figure floated by CNBC three years ago, but doubling the current $24 billion mark seems fairly likely at this point. The Athletic reported that the NBA’s tentative deals with ESPN and Amazon would be a decade at least in length. Assuming the NBA reaches 11-year deals – matching the length of the NFL’s latest contracts – it would need around $4.4 billion per year to get to the $48 billion mark. Split among three partners, $4.4 billion is around $1.5 billion each. ESPN and WBD paid $1.4 and $1.2 billion per year respectively under the current deals. Assuming both companies pay a little more in their renewals, and that the NBA gets over the billion mark for the third package, $50 billion over 11 years sounds about right.
