The Play-In Tournament has seen its value rise because of strong viewership.getty images
The NBA media rights negotiations were always going to careen into the open market, no matter how much money incumbents Disney and Warner Bros. Discovery offered up. So it was hardly news last week when the exclusive negotiating window closed without a deal. Rather, it was the NBA’s inevitable chance to see how the other half lives.
As the major sports league with the youngest demographic in the U.S., the NBA knows its most vital constituency is of the streaming generation, meaning they’ve long envisioned a hybrid linear-digital model that could interest Amazon, Apple, NBC/Peacock, Netflix and YouTube.
Don’t be mistaken: Disney (through ESPN+ or ESPN’s impending direct-to-consumer component or the planned Spulu skinny bundle) and WBD (via Max) can stream with the best of them, and SBJ reported last week that both entities have the right to match any deal the league makes with a third, or even fourth, party. But a more enticing multitiered arrangement with Amazon, for instance, could not only include a weekly Tuesday night package and potentially tentpole events like the conference finals, but also elevate the league’s international reach. The NBA’s global media rights are concurrently up for renegotiation, and a league source said Amazon’s extensive worldwide audience is the exact prototype of what the league is seeking in a streaming entity.
Amazon also is conveniently a streaming partner of the WNBA, whose media rights also are up for bid and are being negotiated jointly with the NBA’s, at least for the time being. A league source said the WNBA — at its apex ahead of Caitlin Clark’s rookie season — is “a fantastic negotiating tool,” since a simultaneous package of WNBA games would give every NBA bidder league programming 365 days a year. Out of them all, ESPN and Amazon seem the most certain candidates to capture bids for both leagues, and the Athletic reported Friday afternoon that Amazon already has the framework of a package in place with the NBA -- though a league source said no deal has been finalized -- that would include regular and postseason games.
But that’s just the beginning of the streaming possibilities. Netflix is easing into live TV with WWE and this summer’s Mike Tyson-Jake Paul bout, and sources said the possibility exists it could acquire the NBA’s SoFi Play-In Tournament or perhaps the Emirates NBA Cup (in-season tournament). The value of the Play-In Tournament has particularly spiked — considering this year it drew an average audience of 3.22 million, its best figure yet, up 22% from last year — and the league would be shortsighted not to parlay that into a lucrative single streaming package, whether it’s with Netflix, Peacock or Apple. The only digital scenario the league has definitively ruled out, according to a source, is granting the NBA Finals to a streamer.
Even the league’s technology deals — such as its cloud arrangements with Microsoft and Google — are being renegotiated within the NBA media rights deal. Everything is on the table: an NBA League Pass deal perhaps with YouTube or an overall linear deal with NBC that could stunningly push WBD — and its nearly $40 billion debt — out of the picture entirely, unless WBD matches or lets a third network have a piece of the linear pie.
An industry source close to negotiations said the league’s previous deal cost Disney an average of about $1.35B annually and Turner an average of roughly $1.2B. So that same source speculated the new pending deal could conceivably require a leap to an annual average of $3B for Disney and $2.5B for Turner — perhaps too prohibitive for WBD.
As for Disney, early reports had said ESPN/ABC may consider sharing the Finals in alternating years with someone like NBC to lessen the rights fee it pays to the league. But a source familiar with negotiations said Friday that "there's no way Bob Iger is going to give up the Finals, and ESPN will end up paying a bunch of money — probably near [a yearly average of] $3 billion ... I would bet my house on it. Bob will say, ‘Why the f*** am I going to share?’ [Disney is] going to end up paying a lot of money, and Bob is going to look at [the NBA] and say, 'For the amount of money we're paying, we're not sharing the Finals with NBC.'”
The point is, the NBA, according to sources, is anticipating a potential deal worth upward of $60 billion to $72 billion over roughly 10 years, and by spreading that number across linear and digital partners, it becomes more fiscally possible.
It should all shake out by late spring/early summer, though there will be some taut moments along the way, perhaps the biggest being whether WBD matches the mammoth bid from Amazon and potentially from NBC.
In other words, the future of NBA media might be unrecognizable.
