Warner Bros. Discovery has until the end of Monday to exercise its matching rights regarding the NBA’s media rights deal. But while the assumption has been that WBD will attempt to match Amazon’s portion of the package , that could prove easier said than done.
During an impromptu appearance on The Town with Matthew Belloni , Bill Simmons broke some news regarding Amazon’s NBA rights deal and how it might affect WBD’s ability to match it. Although it’s long been reported that the NBA and Amazon structured the package in a manner that would make it difficult for WBD to match, the Sports Guy revealed the lengths the two sides went to do just that.
“What Amazon did reminds me of what the Houston Rockets did when Daryl [Morey] was there; when they wanted to sign Jeremy Lin and Ömer Aşık
and they wanted to do these ‘poison pill’ contracts to where if you matched it, there was a lot of upfront money” Simmons said. “I don’t understand all the specifics, but apparently they guaranteed multi-years upfront that they just deliver right away. And I think it’s three years that you put into escrow. But you have to put all of it in escrow immediately.”
As Simmons went on to explain, matching such a contract could prove especially problematic for WBD considering its current financial situation.
“What they’re trying to do, because as we know, WBD is cash poor, is it’s not just you have to pay for that first year — you’re paying for three years,” The Ringer founder said. “And now Warner, which doesn’t have a lot of cash, would then have to take on way more debt and basically risk the future of the company, I would say. To pay for three years of that? That’s like $5.5 billion.”
Belloni proceeded to note that figure could very well equal half of WBD’s value.
In addition to the alleged “poison pill” nature of the contract, there are other factors that could affect WBD’s ability to match the deal. Specifically, Simmons — who’s been on top of the NBA’s media rights negotiations dating back to May — pointed to the streaming specific nature of Amazon’s offer, as well as his belief that the e-commerce giant is set to receive NBA League Pass as a part of its package.
That’s not to say that all of this is a done deal even if Warner Bros. Discovery doesn’t match, as its possible WBD could take legal action over the league structuring its deals in a manner aimed at negating its matching rights. All indications, however, remain that when all is said and done, WBD will ultimately be left on the outside looking in — just as Simmons has been reporting will be the case for more than two months now .
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