--:-- Ryan Knudsen: Welcome to The Journal, our show about money, business, and power. I'm Ryan Knudsen. It's Thursday, November 21st.
--:-- Ryan Knudsen: If you're a basketball fan like me, you've definitely heard of, no, you've definitely watched Inside the NBA. It's a show that airs alongside NBA basketball games on TNT. Hey, it's Inside the NBA presented by Kia from Studio J in Atlanta where it's 1157. It features the broadcaster Ernie Johnson and former NBA superstars Kenny Smith. That's my biggest regret. I'm like, man, I never made an all-star game. Charles Barkley. No matter how much you scream, you loud. That does not make you right. And my favorite player when I was a little kid, Shaquille O'Neal. Stop babying these players with me. I'm not babying no players. He don't play. He don't play. He gotta sit his ass down. Period.
--:-- Ryan Knudsen: If you'd never seen it before, you might wonder why it's so popular. Shaq and Barkley tend to mumble they talk over each other but then you start to see their chemistry these former players bantering about their own glory days and what the NBA is like now there's a ton of inside jokes and a lot of laughing what are you laughing about? you know what they're laughing about I'm laughing at Chuck I know what they're laughing at I would describe it I mean on the one hand it's a similar type of pregame show to inside the NFL or the types of shows we see on ESPN before big events. But it's much more than that.
--:-- Joe Flint: They just have a really great vibe between all of them and they gel and sometimes there's tension between them. And they speak in a way that does not feel manufactured. They're there to give the fans their view and without regard of how it may play with the teams that they're talking about or the league.
--:-- Ryan Knudsen: But earlier this year, Warner Brothers Discovery, the parent company of TNT, lost the right to air NBA games, which meant it looked like inside the NBA might disappear forever. Personally, I was sad Ready to mourn the loss of my favorite basketball show Until earlier this week When I saw that my colleague Joe had a big hoop I mean big scoop He reported that thanks to an unusual deal Inside the NBA would be living on Like a basketball player The show is being traded to another network I couldn't believe my eyes.
--:-- Ryan Knudsen: So it's a very complex, very unusual deal, but one that I think will keep fans happy, the league happy, and hopefully the cast of Inside the NBA as well, because they also need to all get on board with this.
--:-- Ryan Knudsen: NBA basketball has been an important part of the TNT network for a long time. TNT first started carrying the NBA all the way back in 1989. So, you know, this is a very long relationship. And way back then, TNT also had for a while NFL football. Sports was a big part of putting TNT on the map. Inside the NBA and its host witty analysis quickly became a big part of the network appeal I love his game in terms of his versatility He has the ability to play multiple positions He going to play one two and three I still like the Knicks, my Sixers. They should be sinking. Or sunk? Or sunk.
--:-- Ryan Knudsen: After 35 years on air, Inside the NBA became as much a fixture of NBA basketball as the games itself. But when the NBA's media rights deal came up for renegotiation this year, which it does roughly every decade, it looked like TNT's long relationship with the sport was getting shaky. That's because in 2022, TNT was one of the many media brands swept up at a giant merger between Warner Brothers and Discovery. And the conglomerate's new CEO didn't seem to prioritize the NBA. Their chief executive, David Zaslav, made clear that they were going to be very careful in how they were spending money on content. That's entertainment content, sports content. He famously said in an investor conference about almost two years ago now, hey, we don't need the NBA. And whether that was a negotiating ploy or just a belief that they could get by fine without this sport that has been very important to TNT, who knows? But it certainly meant that this was going to be a much more confrontational negotiation than previous ones.
--:-- Ryan Knudsen: And while Zaslav seemed to be cooling on the NBA for his television network, rival streaming companies have been getting more and more into sports. Netflix is going to carry two NFL games at Christmas. Amazon has Thursday night football. Apple has a lot of baseball. All these companies that are trying to carve out their space in the entertainment universe bet on sports. When the NBA's rights went up for renegotiation, NBC and Amazon made huge bids and beat out TNT. Amazon alone agreed to pay roughly $1.9 billion a year. For sports fans, the channel the game is on doesn't really matter that much. What does matter are the commentators and the halftime show. And so fans were pretty upset when they got the news that Inside the NBA might be going away. Congratulations, NBA. You've killed the best studio show of all time. Be prepared to riot, you guys, because Inside the NBA is about to be canceled. Like, I don't know how this deal got passed, but it obviously didn't go through the fans.
--:-- Ryan Knudsen: So TNT and its parent companies Turner and Warner Discovery had lost the NBA but why couldn't they just keep airing inside the NBA like why did they need the NBA to keep having this show certainly TNT could have kept airing inside the NBA but I don't think it would have done as well for them there without the games to bring in an audience and it's an expensive show for them to air without the benefit of it serving as a promotional platform for their basketball games. These folks get paid, you know, good salaries. So while they could have kept airing it and it might have had an audience, it wouldn't have been nearly as impactful both for TNT and for the NBA.
--:-- Ryan Knudsen: So how did the stars of the show, people like Charles Barkley and Shaquille O'Neal, react to the news that TNT had lost the NBA rights and therefore the show might not continue? Well, certainly the most outspoken of those four was Barkley, who expressed a lot of disappointment in Turner for losing the NBA. A lot of concern about the people at Turner whose jobs and livelihoods were dependent on the NBA and inside the NBA. Because, you know, when we merged, that's the first thing our boss said. that we don't need the NBA. Well, he don't need it, but the rest of the people, me, Kenny, Shaq, and Ernie, and the people who work there, we need it. So it just sucks right now
--:-- Joe Flint: I think they were all disappointed obviously that a place that had been their home and the home of the NBA for so many years was suddenly left out in the cold
--:-- Ryan Knudsen: But then, TNT tried to stage a late-game comeback. In July, it sued the NBA, alleging that the league breached its contract by not letting TNT match any bid. Their claim was that they had rights to match that the NBA did not honor. So in this case, Warner did make a matching offer on the NBA package that Amazon had. That was the package they decided they were going to try to match. It was sort of a last-ditch effort, and it was comparable to the $1.9 billion Amazon was paying. However, the league ultimately decided there were other aspects to the Amazon deal that made it more valuable to them. And so that's what led TNT to sue. They essentially claimed that there was a breach of contract. And the league was saying, basically, the claims are without merit.
--:-- Ryan Knudsen: So it looked like there wasn't much hope for inside the NBA. And that this season would be its last. until a crazy idea came about to trade the show to another network. That's after halftime. Late Saturday night, Joe broke the news that TNT's parent company had settled its lawsuit against the NBA.
--:-- Joe Flint: So let's talk about the settlements. Lay it out for us. Who's getting what and who's giving what?
--:-- Ryan Knudsen: Well, I would say in terms of getting, if you look at TNT and Warner Discovery, They certainly didn't win in the sense of getting NBA games back on TNT. That ship is now officially sailed. But they did receive rights at no cost to NBA games in many international markets, including the Nordics, Denmark, Norway, also Poland, a lot of Northern Europe, and Latin America, with the exception of Brazil and Mexico. And as part of the deal, the rights to air Inside the NBA are being traded to Disney, which owns ABC and ESPN.
--:-- Joe Flint: In exchange for Inside the NBA, Disney is giving TNT the right to air a number of college football and basketball games.
--:-- Ryan Knudsen: Why would ESPN agree to give up all these college football games and college basketball games in order to get inside the NBA?
--:-- Joe Flint: Well, I think there's two things going on. One, I do think ESPN recognize the value inside the NBA could bring to it. And at the same time, ESPN has a lot of college football and couch basketball. You might say they have a surplus of it. So for them to be able to sub-license some of their games to another provider, and, you know, so they'll still collect money from that, and that's not necessarily a bad thing.
--:-- Ryan Knudsen: In a statement, ESPN said that adding Inside the NBA, quote, further solidifies ESPN as the preeminent destination for sports fans.
--:-- Joe Flint: So in order to settle this lawsuit, the NBA is giving TNT some stuff, ESPN is giving TNT some stuff TNT is giving ESPN some stuff and everybody kind of comes out happy at the end. Well, that the hope I know how happy the NBA is I do think that there were other factors as well to this deal which is the discovery process had just started in it, and if this suit had gone on, there was the potential for a lot of confidential material and details about the negotiations to be made public. And I think the NBA didn't want that. I'm pretty sure that Amazon wouldn't have wanted that. So there were other motivations as well to make a deal here.
--:-- Ryan Knudsen: This week, Charles Barkley, who's joked about losing his job on the show before, made a crack about his continued employment. Times have changed, Kitty. We got to go back to kissing ass. Ernie Johnson.
--:-- Joe Flint: So now that this deal is done, is Inside the NBA going to change at all?
--:-- Ryan Knudsen: Well, I don't think the show will change. However, I should note that literally as soon as our story went up on Saturday night about the show moving, there were a few people suggesting that, well, they better make sure all the talent's locked up. My understanding from talking to people is that the talent will be on board, the four. But that said, agents look for any opportunity to open up a deal to renegotiate. So yeah, there, there may be some, you know, more negotiations and more money to be, uh, figured out here and there. But, uh, most people feel pretty confident this will get done. I have to think that ESPN wouldn't have gone into this if they weren't confident that all the talent will be part of this show. But, you know, we'll see. We live in a strange world. Lots of things can happen.
--:-- Joe Flint: Do you think that this deal sets a new precedent for what's possible in the media industry? Or is this just sort of like a one-off creative solution to a very specific problem?
--:-- Ryan Knudsen: Well, on the one hand, I view it as that. This is a one-off creative solution to a specific problem. On the other hand, media companies are often tangled up in all sorts of business disputes and often said disputes are resolved by deals like this. I mean, this is obviously unique because it's a big popular show, but we've seen settlements of other legal battles where an asset might be traded to make a suit go away.
--:-- Joe Flint: I gotta say, uh, putting back on my NBA fan hat I'm I'm pretty happy this show's living on yeah this show has a unique place in the sports landscape and the media landscape and that is what's you know kind of created this situation it's not necessarily means that every pre-game show, post-game show is of that same value. For all the talk and obsession that we in the industry and people who cover it have with deals and who's selling what network to who and who's getting into streaming and what's that going to mean, it ultimately still comes down to having personalities that people want to watch. And to me, that's what this Inside the NBA deal represents. It's just so hard to find that sort of extra special sauce that will bring a viewer in and keep them in when perhaps the game may not be that exciting on that particular night. But because of these guys, people will stick around to hear what they're going to say at halftime.
--:-- Ryan Knudsen: That's all for today. Thursday, November 21st. The Journal is a co-production of Spotify and The Wall Street Journal. If you like our show, follow us on Spotify or wherever you get your podcasts. We're out every weekday afternoon. Thanks for listening, and go Trailblazers!
