NBA, Warner Bros. Discovery agree to settle lawsuit over live game rights

Warner Bros. Discovery agreed to end its quest to own a package of live National Basketball Association games in the U.S. for the 2025-26 season and beyond, settling all of its legal disputes with the league.

Warner Bros. Discovery sued the NBA in July, claiming the league failed to allow the media company to use its so-called matching rights on a package of live games.

The league selected three media partners — Disney, Comcast’s NBCUniversal and Amazon Prime Video — to be its U.S. distributors of live games for 11 years beginning next season. The total value of the deal, including WNBA games, was about $77 billion, CNBC previously reported.

The settlement with Warner Bros. Discovery, announced Monday, as well as a separate agreement between WBD and ESPN, will keep the company in the mix with some NBA content, production partnerships and licensing deals. However, it officially ends Turner Sports’ 40-year relationship with the NBA as a carrier of live games in the U.S. after this season.

Turner Sports has had an NBA package since 1984, with games airing on cable network TNT since 1988. The NBA decided to move away from Warner Bros. Discovery as a media partner for several reasons, including losing faith in the long-term future of cable TV as a method for reaching a younger audience.

Disney and Comcast have broadcast networks to showcase NBA games, and Amazon’s package is exclusively streaming.

The terms of the settlement grant WBD’s TNT Sports free access to highlights for the company’s Bleacher Report digital news site and its social media platform House of Highlights for the next 11 years, according to a person familiar with the details. The deal also allows Warner Bros. Discovery to license, create, and distribute new and existing NBA content across its media assets and includes live game rights in the Nordic countries, Poland and Latin America, excluding Brazil and Mexico.

The agreement also extends a partnership between NBA Digital and TNT Sports for five seasons that allows the NBA to engage Warner Bros. Discovery to provide promotion and “a variety of services, including production, content development and sales operations services,” according to a statement.

The settlement gives Warner Bros. Discovery years of guaranteed revenue from the NBA. The league isn’t paying WBD any additional money for those services beyond the terms of the settlement, according to people familiar with the matter, who asked to speak anonymously because some details of the agreement are private.

TNT’s popular “Inside the NBA” studio show will be licensed to Disney’s ESPN and ABC for premier NBA games in the regular season and the playoffs, including the finals. ESPN’s current NBA studio show, “Countdown,” will continue for other ESPN regular-season games.

TNT Sports will continue to produce “Inside the NBA,” starring Ernie Johnson Jr., Charles Barkley, Kenny Smith and Shaquille O’Neal. The four hosts will stay with the show for the durations of their contracts and may develop other new content for Warner Bros. Discovery’s cable and streaming platforms, including programs such as an “Inside Sports” show currently in development for next season, according to the company. ESPN has protections in the deal that would allow it to stop licensing the show if key hosts depart, according to two people familiar with the contract.

It’s unclear if “Inside the NBA” will contain TNT or ESPN branding when the show begins airing on Disney’s platforms next year, according to people familiar with the matter. While TNT Sports has full editorial control of the show, ESPN talent may collaborate with the hosts, the people said.

“The opportunity to continue the iconic and Emmy Award-winning ‘Inside the NBA’ is a huge win for basketball fans everywhere,” said NBA Commissioner Adam Silver in a statement. “We look forward to building on our longstanding partnership with TNT Sports and working together to promote NBA content across key WBD and NBA platforms.”

Disney and Warner Bros. Discovery have partnered several times in the past year, including on a streaming bundle that links WBD’s Max service to Disney+ and Disney’s Hulu, and on a sports-focused joint venture called Venu that’s currently in limbo due to antitrust concerns.

As a side part of the settlement that doesn’t involve the NBA, ESPN is allowing TNT to televise 13 Big 12 football games and 15 men’s basketball games each season, starting in 2025. The deal gives the Big 12 more linear TV exposure through TNT, as most of the games would have streamed exclusively on ESPN+, according to people familiar with the matter.

ESPN struck a similar sub-licensing deal with Warner Bros. Discovery for first round and quarterfinal College Football Playoff games earlier this year.

The deal allows Warner Bros. Discovery Chief Executive Officer David Zaslav to walk away with something after failing to reach a deal with the league during its exclusive negotiating window earlier this year.

“Together these agreements ensure fans will continue to enjoy TNT’s ‘Inside the NBA’ and create tremendous value for our entire portfolio as we accelerate the growth of TNT Sports, Bleacher Report, House of Highlights and our global sports business,” Zaslav in a statement.

Silver told CNBC last month that the league “absolutely” could have reached a deal with Warner Bros. Discovery but leadership on both sides never saw eye to eye.

“It wasn’t a longtime relationship with the people currently running Warner Brothers Discovery,” said Silver. “Ideally in these partnerships, people aren’t pulling out the contract and saying page eight, paragraph three. You’re saying you understand the spirit of what you were trying to accomplish, and that you’re willing to adjust based on changes that might have been unpredictable. So when you’re actually looking at the contract, that’s a sign that the partnership isn’t going as well.”

Disclosure: Comcast’s NBCUniversal is the parent company of CNBC and a co-owner of Hulu.