The NBA will not be carving out an additional fourth media rights package for Warner Bros. Discovery, per John Ourand of Puck.
The prospect of the NBA selling a fourth media rights package “is about as dead as it can be,” Ourand reported on Thursday, citing sources who put the chances of such a move at “1 percent.” [Related: Would a ‘fourth package’ be worth it for WBD and the NBA?]
The fourth package had been floated in recent weeks as a possible way for Warner Bros. Discovery to retain a piece of the NBA without having to match third party bids by Comcast or Amazon. If viewed as a faint possibility at the start of negotiations, the idea had been mentioned with increasing frequency as it became clear that WBD’s options were limited.
Per Ourand, a fourth package would have prompted the other bidders, including incumbent Disney, to renegotiate for lower rights fees than they are currently offering. A fourth package, even if it did not pull inventory from the other three partners, would devalue the other deals. It stands to reason that would potentially cancel out any additional money the league would earn from WBD.
Notably, Ourand said Disney and Comcast could also seek a reduced rights fee if WBD matches Amazon. For Comcast — a cable operator — TNT losing the NBA has the added benefit of making the channel less expensive to carry.
Per prior reporting, the NBA has argued that WBD would have to exceed third-party rights fees in order to sufficiently match a bid. That argument is strengthened by the prospect of the other bidders reducing their fees.
To match Comcast’s $2.5 billion/year bid, WBD would reportedly have to pay as much as $2.8 billion. It is not clear what kind of price WBD would have to pay in order to match Amazon’s $1.8 billion/year offer, given the possibility that it would affect the other bids. WBD originally offered to pay $2.1 billion/year to retain its current “B” package.
