WBD is suing the NBA so it can stay in business with the NBA. Yikes.
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- Warner Bros. Discovery is about to lose one of its best assets: the rights to show NBA games.
- Now, WBD is suing the NBA to try to break up a deal the league has made with Amazon.
- It's probably a bad idea to end up in court with your long-term sports programming partner. But WBD has boxed itself into an unpleasant corner.
Two years ago, Warner Bros. Discovery boss David Zaslav told investors he'd be ok without NBA games, which his TNT network had been airing for decades.
He's changed his mind since, but it's too late: The NBA has struck $76 billion worth of new rights deals with Disney, Comcast, and Amazon, which means next season is the last year you'll see the NBA on TNT.
So now Zaslav is in an extraordinary position: He's filed a hail mary lawsuit against the NBA, demanding that they give him a package of games they've decided to sell to Amazon instead.
You can read an excellent blow-by-blow of WBD's failed negotiations with the NBA from John Ourand at Puck. (TLDR: Zaslav and his team miscalculated badly.) But the next chapter of his story will be fascinating, too.
That's because there are a few different outcomes here — and none of them are great for WBD.
One is that WBD somehow wins its suit and ends up forcing the NBA to give it games it would prefer to sell somewhere else.
I'm not a well-paid media executive, but I do know that you don't want to be in a long-term relationship with a programming partner who's only working with you because a court compelled them to work with you.
And then there are two other possibilities: One is that WBD doesn't get the games, but extracts some kind of settlement from the NBA for supposedly breaching a contract. And the other is that WBD doesn't get anything out of it at all.
And both of those outcomes are awful for WBD.
WBD's linear TV channels are already looking at a steep decline — which is why the company has floated the idea of splitting them off from its more valuable HBO and Warner Bros. Studio assets.
But take away the NBA from those channels and things get really gnarly: Pay TV distributors like Comcast will find it much easier to play hardball with WBD when they negotiate new deals. And the company's attempts to do direct-to-consumer deals — like the upcoming sports joint venture it's launching this fall with Disney and Fox — become much harder, too.
WBD has tried to pre-emptively cushion the loss of the NBA by signing up some other sports programming, notably some college football playoff games it has somehow bought from Disney.
College football is popular. Not NFL popular — but nothing is NFL popular, so that's better than nothing. But it's obviously not the swap WBD wanted to make. Which is why it's headed for a legal fight where the best possible outcome is still not good — at all.