The executives at Warner Bros. Discovery thought they had given the National Basketball Association a proposal they would accept.
In April, after months of negotiations, the company made an offer to pay the league billions of dollars for the rights to continue showing its games on TNT, as well as its Max streaming service. TNT has aired NBA games since the 1980s, and “Inside the NBA” is widely regarded as one of the best studio sports shows ever made.
But as the end of Warner Bros.’s exclusive trading window approaches. Discovery, the NBA insisted on changing the package of games the company would receive, according to two people familiar with the negotiations, who spoke on condition of anonymity to discuss the private transactions. Warner Bros. Discovery was banned and while the two sides have continued to negotiate, the company is now on the verge of losing the rights to televise the sport with which it has become inextricably linked. And on Friday night, “Inside the NBA” heartthrob Hall of Famer Charles Barkley said he would retire from television after next season.
“The first thing that comes to mind when you say TNT is the NBA,” said John Skipper, former president of ESPN.
Media companies, including Warner Bros. Discovery, were prepared for the bruising negotiations with the NBA rights.
The league made it clear it wanted a significant increase to the roughly $2.66 billion total it receives annually, on average, from Warner Bros. Discovery and ESPN under their current rights deals, which went into effect in 2016. Executives at those companies knew if they wanted to keep the NBA rights, they would have to pay more for fewer games, so the NBA would create a third bundle of games for sale.
Disney, the parent company of ESPN, exited the exclusive negotiation period with a handshake deal to continue showing NBA games. Meanwhile, NBC and Amazon quickly jumped in and are both negotiating with the NBA for packages consisting of games currently owned by Warner Bros. Discovery as well as additional assets, according to three people familiar with the negotiations. This month, the Wall Street Journal reported that the league is closing in on deals with ESPN, NBC and Amazon that would account for roughly $76 billion in revenue over 11 years.
That leaves Warner Bros. Discovery to look outward, without creating tensions within the company.
The public face of that grudge was Barkley, whose wit and candor made him a driving force behind TNT’s critically acclaimed coverage over the past two decades.
Barkley has publicly lashed out at Warner Bros. management. Discovery to handle media rights negotiations. He stood up for network employees, did interviews the network would rather not do and, after Friday night’s NBA Finals game, announced he planned to retire after next season, the final year of Warner Bros.’ current deal of Discovery.
“No matter what happens, next year will be my last year on TV,” Barkley said. “I just want to thank my NBA family. You guys did great. My heart is full of joy and gratitude. But I will hand over the baton at the end of next year.”
Barkley’s surprise announcement was the latest twist in a saga that began in 2022 when Discovery bought WarnerMedia — whose assets included channels such as HBO, TNT and TBS — and created Warner Bros. Discovery.
Many, though not all, of the longtime executives who had worked in the NBA for WarnerMedia have left the company since the Discovery purchase. That meant many of the people the NBA had long-standing relationships with were gone. David Zaslav, who had run Discovery and is now the CEO and chairman of Warner Bros. Discovery hired Luis Silberwasser, a Univision executive, to run TNT Sports.
The business relationship got off to a rocky start after comments Zaslav made at an investor conference in 2022. He noted that he liked the NBA and had known Adam Silver, the league’s commissioner, for 20 years. But as a business matter, Zaslav said, “We don’t need to have the NBA.”
These comments worried Warner Bros. employees. Discovery focused on its NBA assets and, when combined with reports of financial tightening at the company, raised questions at the league office about the company’s commitment to the NBA, according to people familiar with the reaction who spoke. on condition of anonymity due to the sensitive nature of the situation. In a radio interview on “The Dan Patrick Show” last month, Barkley said he believed Zaslav’s comments likely upset Silver.
Warner Bros. Discovery has the contractual right to match third-party offers. It is likely to try to match Amazon’s offer, according to a person familiar with the company’s thinking.
But NBA lawyers are still trying to determine how the contract defines Warner Bros.’s matching rights. Discovery, according to two people familiar with the negotiations, since the company would like to show many of the games on TNT and Amazon will stream them on Prime Video. It’s a matter complicated by the fact that when these contracts were written in 2014, sports streaming was in its infancy.
NBA loss will hurt Warner Bros. Discovery, because much of TNT’s advertising revenue and much of its viewership comes from NBA games. But it would save more than $2 billion a year, money it could use to buy other sports rights. In recent years it has added rights to the National Hockey League, NASCAR, the United States men’s and women’s soccer teams, All Elite Wrestling and the College Football Playoff.
Warner Bros. Discovery is trying to keep enough high-quality programming on its cable channels to earn big distribution fees and advertising dollars, while also shifting exclusive programming to streaming to create its Max service.
“The streaming industry is in the middle of an evolution,” said Frank Albarella, media and telecommunications executive at accounting firm KPMG. “Everyone is trying to differentiate themselves. All old norms are challenged. I believe this move into live sports can be a game changer for the industry and the industry.”
For the NBA, cable channels like TNT have lost their luster. Broadcast channels like NBC and ABC — which reach more households than cable channels — are back in vogue, and streaming has the potential to reach a larger audience around the world than television. NBC would also use its streaming platform, Peacock, to show NBA games.
Silver said during a press conference on June 6, before Game 1 of the NBA Finals, that streaming “allows for tremendous additional functionality in terms of game tracking, personalization, game customization, multiple feeds, multiple dialects , many languages, different camera angles. It really gives the fan tremendous additional options that you don’t have through traditional television.”
He declined to provide an update on the negotiations at the time, but addressed employees at the company he said he still calls “Turner Sports.”
“I apologize that this has been a drawn-out process, because I know they are dedicated to their work,” Silver said. “I know people who work in this industry, it’s a big part of their identity and their family’s identity, and nobody likes that uncertainty. I think it’s up to the league office to get those negotiations going and get them done as quickly as we can.”
