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The National Basketball Association\u2019s season tipped off on Tuesday with stars like LeBron James and Nikola Jokic beginning the long quest for a title. But the action that will have longer-term ramifications for the league, and the media and entertainment landscape, is happening off the court.<\/p>\n
The companies holding the rights to show N.B.A. games \u2014 Disney, which owns ESPN and ABC, and Warner Bros. Discovery, the parent company of TNT \u2014 are collectively paying the league $24 billion over nine years for that privilege. But their contracts expire after next season, and the N.B.A. hopes to more than double the money it receives for rights in the next deal, according to several people familiar with the league\u2019s expectations who spoke on the condition of anonymity to discuss ongoing negotiations.<\/p>\n
It won\u2019t get that without a fight. After decades in which sports leagues garnered ever bigger piles of money for the rights to show their games, there are signs that media and technology companies are under increasing pressure to justify the exorbitant amounts they spend on broadcast rights. Interest rates are high, Wall Street is demanding profitability over growth, and streaming has reconfigured the entertainment industry.<\/p>\n
The result of the N.B.A.\u2019s negotiations will say a lot about the future of broadcast networks, the cable bundle, streaming services and the sports media ambitions of technology companies.<\/p>\n<\/div>\n<\/div>\n
\u201cI think in this era that we\u2019re coming out of, this is the last of the big deals,\u201d said John Kosner, who advises sports media and tech start-ups after a two-decade career as an executive at ESPN.<\/p>\n
The National Football League, the most valuable sports league in the world, did not quite double its rights fees when it signed new agreements in 2021<\/a>. And that was before the stock market declined, interest rates rose and wars began in Europe and the Middle East.<\/p>\n Disney and Warner Bros. Discovery, which have televised N.B.A. games for more than two decades, aren\u2019t necessarily in positions to shell out lots of cash, either.<\/p>\n Disney has carried out extreme cost-cutting and layoffs this year<\/a>, and its chief executive, Robert A. Iger, has said the company is considering \u201cstrategic options\u201d to sell equity in ESPN. Warner Bros. Discovery has also cut costs, and said in August that it had a debt load of nearly $50 billion following the merger of the two companies last year.<\/p>\n The most likely scenario, according to the people familiar with the negotiations, is that Disney and Warner Bros. Discovery will sign new agreements with the N.B.A. to televise fewer games. The N.B.A. declined to comment for this article.<\/p>\n<\/div>\n<\/div>\n The two companies together show about 160 regular-season games each year, as well as the playoffs and N.B.A. finals. Most games are shown on cable (ESPN and TNT), with a handful on ABC.<\/p>\n For both companies, N.B.A. broadcast rights still represent a valuable bargaining chip in negotiations with their biggest customers: cable and satellite companies. Those distributors pay billions of dollars to Disney and Warner Bros. Discovery for the rights to show their cable channels, including TNT and ESPN, based in part on the expectation that those channels will air sports like N.B.A. basketball.<\/p>\n An N.B.A. package would also help both companies shift to a streaming future. Warner Bros. Discovery recently added a live sports package<\/a> to its streaming service, Max, while ESPN has been vocal about having a stand-alone streaming offering for its flagship channel in the near future.<\/p>\n Disney and Warner Bros. Discovery are not likely to be the only companies showing N.B.A. games, though. If those companies end up showing fewer games in the new deal, the league may create a third rights package, perhaps even a fourth, of the games no longer included in the first two packages, as well as the league\u2019s new in-season tournament<\/a>.<\/p>\n The most likely buyers for those packages of games are Amazon and NBC, according to the people familiar with the negotiations.<\/p>\n<\/div>\n<\/div>\n Top executives at Fox<\/a>, CBS<\/a> and the Google-owned YouTube<\/a> have said that they are unlikely to put in serious bids for broadcasting rights. The intentions of Netflix and Apple are less clear, but Netflix has long said it is uninterested in paying the kind of prices the N.B.A. is looking for. Apple has largely committed itself to a sports strategy of buying up all of a league\u2019s domestic and international rights, like in its recent deal with Major League Soccer<\/a>. That isn\u2019t possible with the N.B.A.<\/p>\n Amazon and NBC are attractive partners to the N.B.A. for very different reasons.<\/p>\n For a generation, most N.B.A. games have been watchable only with a cable package. But the collapse of the cable bundle \u2014 from around 100 million households with a cable package a decade ago to around 70 million today \u2014 has made old-school broadcast networks, the most widely distributed television channels, more attractive. With CBS and Fox as unlikely bidders, the league could want games to be shown on NBC\u2019s broadcast channel.<\/p>\n As for Amazon, it is seen as highly unlikely that the N.B.A. \u2014 a league that is proud of being forward-thinking regarding technology \u2014 would sign a new rights agreement with only traditional media companies, according to some of the people familiar with the negotiations. Amazon has long been interested in broadcasting the N.B.A., according to a person familiar with the league\u2019s negotiation history, and it has won plaudits for how it has handled Thursday night N.F.L. games.<\/p>\n The media and technology companies declined to comment for this article. CNBC<\/a>, Bloomberg<\/a> and The Wall Street Journal<\/a> have all previously reported on parts of the N.B.A.\u2019s media-rights negotiations.<\/p>\n The league has a number of other media assets it could leverage. Most N.B.A. games are not shown nationally. Instead, they are broadcast in their local markets, with individual teams controlling the rights to sell those games. Teams have traditionally sold those rights to regional sports networks, but those are collapsing, leaving teams looking for alternatives<\/a>.<\/p>\n<\/div>\n<\/div>\n