NBA on NBC could be back after more than two decades. Following months of negotiations, the NBA is close to finalizing a $76 billion, 11-year deal for broadcast rights, according to an exclusive report from the Wall Street Journal.
Here’s how it shakes out, according to the Journal:
- NBC would pay about $2.5 billion annually to show roughly 100 games per season. Half of those games would be Peacock exclusives.
- Amazon would pay $1.8 billion per year to get in on the action with regular season and playoff games. It would also broadcast the NBA in-season tournament and playoff play-in games.
- ABC and ESPN’s parent company Disney would pay $2.6 billion a year, nearly doubling the $1.5 billion it currently pays for ESPN’s portion of the rights. The new deal allows ESPN to have games on its new direct-to-consumer streaming service, which launches in 2025. ESPN would still maintain rights to the NBA Finals.
There’s a common theme in the way the deal shakes out. Every piece of the pie has a streaming component.
They’re going to have to grow into these rights fees and the prices. And that means the fees for these streaming services are going to continue to go up.
Bob Thompson, former Fox Sports president
But the most surprising element of the deal for former Fox Sports President Bob Thompson is what’s missing from it.
“For me, it would be the fact that it looks like Warner Bros. Discover may be out after roughly 40 years with the NBA,” Thompson said.
Current NBA partner TNT is noticeably absent from the proposed broadcast rights deal. Warner Bros. Discovery can still come to the table and outbid, but the company is facing more than $40 billion in long-term debt.
Below is an edited Q&A between Straight Arrow News’ Business Corespondent Simone Del Rosario and Thompson. Watch the interview in the video above.
Simone Del Rosario: Is there any chance for an 11th-hour deal with Warner Bros. Discovery?
Bob Thompson: My guess is Warner Bros. is probably waiting to see what the other deals look like. And I’m sure that the NBA is going to make sure those are all buttoned up from a legal standpoint before they give them to Warner Bros. Discovery, who has a right to match some form of a package.
The form of that package is the great unknown. It seems as though the Warner Bros. Discovery package from the past is being split up between Amazon and NBC, so do they have the right to match one, both, or none of them? That is the big question.
I’d be very surprised if the commissioner comes out and announces anything during the NBA playoffs. They just tend not to want to overshadow the games with business. So my guess is we’ve still got another week to 10 days before they even start talking about who’s getting what and finalizing the actual deal.
Simone Del Rosario: What about the sticker price for you? Did you expect $76 billion to be in line with what this kind of rights deal could command?
Bob Thompson: I didn’t think it was going to be quite that big. I thought maybe they get above $6 billion a year and it looks like it’s gonna be closer to $7 billion. It just shows how valuable prime real estate is in the sports world.
You had two companies, Amazon Prime and NBC, on the outside wanting to get in. And then you combine that with the fact that ESPN obviously wanted to maintain their position, maintain the finals for ABC, have enough content for their purported direct-to-consumer offering of ESPN, the main channel that’s coming up next year.
So all those things combined to raise that number to a really astounding number for the NBA, and congratulations to Adam Silver and Bill Koenig if they get it.
Simone Del Rosario: Over at NBC, there’s word of a divide over whether this is a good investment. Do you think that this is just the price to pay to boost streaming subscriptions?
Bob Thompson: I think that’s part of the price to pay. It also provides NBC with prime-time content. They don’t have to go out and develop entertainment programming, it just drops right in there. You get a certain cost. It’s not a hit-and-miss like you go through with the pilot season.
And on the streaming side, for Peacock, one thing that NBC has shown is that if you buy specific content – in their case, it was NFL games – it can be very helpful in driving subscriptions to Peacock that at this point seem to have stuck around, even though the NFL season ended several months ago.
Simone Del Rosario: Does this deal indicate that creative content that streamers are developing is not enough to get subscriptions and now we’re going to see this huge push into live sports?
Bob Thompson: Yeah, I can see that. I think that what they’re probably thinking is that so much of the entertainment aspect and scripted dramas, things like that, have already moved off network television over to the streamers. They probably feel they’ve captured that subset pretty well.
So the next great leap is, how do you get the people who are still in the original cable bundle to get over to the streaming side as well? In many cases, the reason they’re still in the cable bundle is because they want the sports.
One thing I can tell you, though, they’re going to have to grow into these rights fees and the prices, and that means the fees for these streaming services are going to continue to go up. It’s like your cable bill used to increase every year. Your streaming service bills are going to increase every year as well.
Simone Del Rosario: If you were in charge at NBC or Amazon and TNT is out for good, would you encourage those networks to make a play for the “Inside the NBA” crew?
Bob Thompson: Absolutely. I think that is really kind of a insignia show for the NBA. The talent is great. They have a great chemistry. I don’t know if you’re going to be able to get them all to come over, but certainly, Charles Barkley is the ringleader, so to speak, and I think he could probably convince some people to come along with him.
I believe it will be a sought-after product, or certainly sought-after individuals. I would probably give NBC the leg up because they’re going to end up having Sunday night NBA once the NFL Sunday night games are over. And I think it’s a very marquee position for the folks on that show.
Simone Del Rosario: What about the ripple effect this deal is going to have on other leagues? We know the NFL can pull the plug four years early on its broadcast contracts in 2029. Do you think the NFL is definitely going to do that and secure much higher prices?
Bob Thompson: It would not surprise me at all if they open the contract up in a few years. I think it gives them the advantage of jumping ahead of all the college rights deals that come up in the early 2030s. The CFP deal will be coming up again as well. So I think that it would behoove the NFL to get their hand in people’s pockets before others do.
The other thing you have to keep in mind is that, for other properties, Warner Bros. Discovery has a couple of billion dollars in their pocket that they may not be spending on the NBA. You kind of wonder what they might go shopping after. Maybe they go shopping after CBS if this whole Paramount deal comes down and the folks at Skydance and Redbird decide they don’t want to own the broadcast network.
