How Warner Bros. Discovery lost the NBA

With the NBA officially prepared to move forward without Warner Bros. Discovery, we’re now learning new details regarding how the league’s longest-running media rights partnership came to an end.

In his Friday newsletter, Puck’s John Ourand published a detailed look at how WBD found itself on the outside looking in at the NBA’s next media rights deal. You can read that story — titled “How Zaz Lost the NBA” — here (subscription required).

Suffice it to say that several factors contributed to the NBA ending its relationship with its longest-tenured media partner and WBD losing its most valuable property. With that in mind, here are the five wildest details from the NBA and WBD’s split.

WBD invited Amazon into negotiations

Perhaps the craziest aspect of the breakup is that WBD reportedly helped facilitate the league’s negotiations with its eventual replacement.

As The Athletic’s Andrew Marchand reported earlier this week , it was WBD that first suggested the NBA begin its negotiations with Amazon prior to the end of the league’s exclusive negotiating window with WBD and ESPN. Ourand’s story confirms Marchand’s reporting, noting that WBD did so because the NBA’s desire to find a streaming partner had stalled negotiations.

Unsurprisingly, the league eagerly took WBD up on its offer, with Disney (ESPN) agreeing to allow Amazon into the negotiations. For what it’s worth, WBD sources told Ourand the suggestion came from both ESPN and itself.

WBD seemingly figured that welcoming Amazon in would create a three-partner package with itself, Disney and the e-commerce giant. Instead, WBD ultimately found itself without a chair when the music stopped, with the NBA opting for deals with ESPN, Amazon and Comcast (NBC) .

WBD felt ‘stalemated’ by NBA

WBD’s negotiations with the NBA took several shapes and according to Ourand, the media conglomerate felt the league was “constantly moving the goalposts during the process.” While it appeared the two sides were close on a deal on multiple occasions, WBD alleges that the NBA repeatedly shifted its negotiating points throughout the exclusive negotiating window, including offering just five conference finals throughout the 11-year deal, as opposed to at least one every season (this backs up previous reporting by Bill Simmons ).

WBD seemingly wasn’t the only suitor the NBA was “constantly tweaking” its offers for, with Disney reportedly unhappy that it only received 10 conference finals series and five WNBA Finals over the course of the 11-year package. Still, unlike WBD, Disney was ultimately able to make a deal.

WBD called the NBA’s bluff… and failed

Despite the NBA reportedly repeatedly shifting its stance, WBD seemingly thought it had a strong negotiating position as it exited the exclusive negotiating window this past April. So much so that, according to Ourand, WBD told the league that its last offer in the window would be its best and that the negotiations would start from scratch moving forward.

The tactic proved ineffective — if not catastrophic — with NBC’s entry into the negotiations seemingly catching WBD off-guard. If WBD thought that no other suitor would be willing to offer the NBA as much as it was, that clearly wasn’t the case, as it was telling that WBD (unsuccessfully) attempted to match the NBA’s $1.8 billion annual agreement from Amazon rather than NBC’s $2.5 billion per year package.

Venu motivated NBC to beat out WBD

Earlier this year, ESPN, WBD , and Fox announced plans to launch a joint streaming service, which we now know will be called “Venu.” While the partnership was seemingly a positive for WBD, it also may have played a key role in its breakup with the NBA, with Ourand reporting that the prospect of Venu having both Disney and WBD’s NBA rights deals motivated Comcast to get its own deal done.

Additionally, Comcast was aware that WBD losing the NBA would likely weaken the media company’s leverage in its carriage rights fees negotiations with Comcast’s Xfinity cable systems. Well aware that it would be difficult to beat out an incumbent for a piece of the rights deal, Comcast proceeded to make a $2.5 billion annual offer on the package WBD had been bidding on. WBD declined to match, only furthering the notion that NBC’s entry into the negotiations blindsided it.

NBA didn’t expect WBD to match Amazon

While it wasn’t necessarily surprising that WBD attempted to match a portion of the NBA’s rights package, the league was reportedly surprised that it attempted to do so with its agreement with Amazon.

Per Ourand, WBD felt its matching rights were applicable because Amazon was set to receive portions of the package it previously held. To the NBA, Amazon’s deal was streaming-only, thus making the WBD ineligible to match.

WBD attempted to do so anyway, with the NBA maintaining its stance that the package was streaming-only and that Prime Video’s reach far exceeds WBD’s Max streaming service. The league also argued that the line of credit the company had secured to match Amazon’s “poison pill” wasn’t equal value to the actual deal.

Ultimately, the league rejected the match attempt and moved forward with Disney, Comcast and Amazon, leaving WBD to consider potential legal action .

Over the past few months, there has been no shortage of speculation and reporting regarding the NBA’s negotiations, especially concerning its impending split with WBD. Ourand’s reporting, however, offers the most complete and detailed look at one of the most wild sports media negotiations to have taken place in recent memory, with plenty of fallout still to come.

[ Puck ]

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