Disputes between cable companies and TV networks have followed the same blueprint for decades: The two sides negotiate privately, then argue about their divergent demands publicly—then, as contractual deadlines approach, reach an agreement that leads to larger bills for cable subscribers. At the end of next year, however, sources say that Comcast’s contract with TNT comes up for renewal, which is sure to be one of the more spectacularly bitter carriage battles in recent memory, and for all the obvious reasons—Comcast just swooped in to snatch the NBA rights away from TNT, while the latter’s parentco is suing the league and waging a P.R. campaign that portrays it as avaricious.
Yes, yes, Comcast had many clear-eyed business reasons to bid aggressively for the NBA. An NBA package could buttress NBC on weeknights, help grow Peacock, and fill a sports-sized hole in the streamer’s calendar. But their $2.5 billion per annum bid is also a bit of revenge economics—the good people in Philadelphia were miffed when Venu, the WBD-Fox-Disney plural marriage, was consummated behind their backs; they also recognized that depriving WBD of the NBA could lower the the carriage value of TNT. I swear, the sports media business is often as competitive as the game on the floor.
Comcast and WBD signed a three-year deal for the legacy Turner networks in 2022. And distributors pay WBD around $3 per subscriber per month for TNT—a price that many distributors will be pushing to lower significantly now that the network has lost the NBA. WBD, for its part, needs to manage the value of the Turner networks for both obvious reasons (they comprise 70 percent of WBD’s domestic affiliate revenue) and less conspicuous ones, like preserving the value of the legacy Discovery cable assets.
Tantalizingly, the media business could get a preview of next year’s grudge match this fall, since Comcast’s deals with the WBD-owned Discovery channels expire in the fourth quarter. (WBD has not been able to sync the legacy Discovery deals with the legacy Turner deals.) “With the loss of the NBA, not only do we think the 70 percent from Turner is at risk; so too would be the 30 percent from Discovery,” MoffettNathanson analyst Robert Fishman wrote in a recent note. He continued: “We would expect TNT to have far less leverage in these affiliate negotiations, perhaps even seeing rollbacks in rates, even after factoring in the new sports rights acquired over the past few months. We can see the damage extend to other parts of WBD’s cable portfolio, as the company would no longer be able to use the NBA on TNT as a hammer to push rates on its slew of other domestic cable networks.”
Even without its NBA hammer, distributors would be disinclined to drop TNT or TBS altogether. After all, TBS has the MLB playoffs in the fall, March Madness and select CFP games in winter, and the NHL Stanley Cup playoffs in the spring. TNT Sports head Luis Silberwasser has been on a buying spree of late, gobbling up rights to the French Open, Big East basketball, the College Football Playoff, etcetera. But it’s still not the NBA, the country’s second-most popular pro sports league, whose season runs from October to June, and whose playoff games bring in nearly 2 million viewers
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