The NBA broadcast contract is causing a lot of ripples through the world of entertainment. Some of the largest names in television are involved. We have ESPN, Amazon, and Warner Bros aLL fighting over the contracts.
A couple days ago, the NBA decided who it was going to give the contracts to.
Here was the decision:
The new media deals will expand the reach of NBA telecasts, with all national games available on broadly distributed streaming services – Prime Video, Peacock and ESPN’s forthcoming direct-to-consumer service – and with dramatically increased exposure on broadcast television. Approximately 75 regular-season games will be on broadcast TV each season, up from the minimum of 15 games under the current agreement.
Part of the deal was that an incumbent, TNT (Warner Bros) had the right to match an offer. In this instance, it is Amazon.
The NBA does not believe that was met and chose Amazon.
This led Warner Bros to sue the NBA.
Image from Wikipedia
Amazon Should Buy Warner Bros
Amazon being involved in the process makes sense from the NBA point of view. They want the biggest of fish in there.
When it comes to entertainment, Silicon Valley and technology companies are taking over. We have a clear case here.
The NBA wants Amazon around. In a decade, it will want even more money, something that Amazon can likely pony up. Hence, it seems to be the motivation behind the decision.
Of course, once the courts get involved, things can get messy. This all can be eliminated by Amazon.
It simply should buy Warner Bros.
Big Tech Buying Hollywood
Amazon already purchased MGM. We also recently saw Paramount swallowed up. Hollywood Studios are being eaten alive. This means consolidation is in the cards.
We are literally dealing with David versus Goliath at least with regards to market capitalization.
Amazon is presently valued at $1.9 trillion. Warner Bros has a market cap of slightly over $20 billion.
This means that WB is about 1% of the total of Amazon. In many circles, that is a rounding error.
For this reason, Amazon can do away with the entire mess by buying Warner Bros. This would give it the NBA contract without any resistance (you aren't going to continue to sue yourself) plus feed its Amazon Prime Video division.
Warner Bros has some pretty valuable franchises, including Harry Potter and Lord of the Rings. This would give it the ability to profit off other films it brings out along with adding this to its existing streaming service.
Consolidation To Battle Fragmentation
The fragmentation of entertainment is well underway.
Hollywood is not going to survive in its present form due to the fact that fragmentation means less money. That means those entities that have other revenue streams are going to take over.
This is exactly where Big Tech can step in.
Whether it is Apple, Amazon, or Google, all are making headway in this industry. And none are dependent upon the success of entertainment for their bottom lines.
In fact, each is using it to supplement revenue streams elsewhere.
What we are looking at is, by the beginning of the next decade, a completely different world of entertainment. As always, technology companies can be in whatever industry they want to.