Adam Silver speaks exclusively, and TKO makes a big bet

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TKO Group, the company that owns WWE and UFC, is acquiring three sports-related businesses from Endeavor Group for $3.25 billion. The deal is all-stock, so it will increase Endeavor’s total ownership percentage in TKO Group to 59%. Endeavor is already the majority owner of TKO Group. 

The businesses are Professional Bull Riders (PBR), On Location, and IMG.

PBR is the world’s largest bull riding league. It fits with WWE and UFC as professional sporting leagues that operate live events. PBR puts on more than 200 events annually for more than 1 million fans. 

On Location provides luxury hospitality for major sporting events including the Super Bowl, the Ryder Cup, March Madness, the FIFA World Cup and the Olympics. 

IMG packages and sells media rights and brand partnerships, providing strategic consultancy on the biggest TV deals for the NFL, English Premier League, National Hockey League, Major League Soccer, and many other leagues, including UFC, WWE, and PBR. The acquisition of IMG does not include “businesses associated with the IMG brand in licensing, models, and tennis representation, nor IMG’s full events portfolio,” according to TKO. 

“Sports unify us and have never been in more demand,” said Mark Shapiro, the president and chief operating officer of both Endeavor and TKO, in an interview. “At TKO, we’re primarily interested in league ownership if that exists and businesses that can power our current sports ecosystem. That could be ticket sales, hospitality, consumer products, media rights expertise. That’s what we’re getting in IMG and On Location.”

Click here for the full CNBC.com story on the deal.

For the first time since striking the NBA’s $77 billion media rights deal in July, Silver delved into the frustration he felt in not being able to reach a deal with Warner Bros. Discovery during the exclusive negotiating period between the league and its incumbent media providers, which ended April 22. The NBA signed deals with Disney, Comcast‘s NBCUniversal and Amazon to be its new media partners, beginning in the 2025 season. The latter two are new partners (new-ish, at least – NBC is back after losing NBA rights in 2002).

Silver told me that he thought there “was a very good chance” the NBA would reach a deal with Warner Bros. Discovery in the exclusivity window. That surprised me. I thought the league likely already knew it wanted one new partner with a broadcast network (NBCUniversal owns NBC; Warner Bros. Discovery only owns cable networks) given the decline in cable TV subscriptions, along with a second Big Tech streamer with international reach. I figured the league probably suggested to Warner Bros. Discovery that it at least wanted to speak with other partners before renewing a deal.

But Silver said that wasn’t the case. 

“There was just never a meeting of the minds between us and Warner Bros. Discovery,” Silver said. “We negotiated hard with them over several months, and they negotiated with us, and as I said, we just couldn’t reach a deal.”

As an incumbent provider (and NBA partner for nearly 40 years), Warner Bros. Discovery’s TNT Sports is now suing the league, arguing it paid for so-called matching rights during its previous deal with the league in 2014. Those rights allow Warner Bros. Discovery to match the price another company is paying for a package of games – essentially a right of last refusal. 

Warner Bros. Discovery wants to use its matching rights on the $1.8 billion per year package of games earmarked for Amazon. That’s less than the $2.45 billion NBCUniversal has agreed to pay or the $2.62 billion Disney is paying, according to people familiar with the matter.

The NBA is arguing Warner Bros. Discovery can’t use its matching rights on a package because those games set to go to Amazon are exclusive for a streaming-only service. Warner Bros. Discovery would simulcast the games on its own streaming service (Max), but would also air the games on its cable network TNT. 

Silver noted that while Turner Sports has had a relationship with the NBA for decades, WarnerMedia’s current leadership, led by CEO David Zaslav and TNT Sports CEO Luis Silberwasser, is relatively new. Zaslav took over Turner Sports as part of the 2022 merger between Discovery Communications and WarnerMedia. He named Silberwasser to lead sports that year. 

Relationships matter, Silver said.

“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.”

Losing Warner Bros. Discovery is a particularly big deal to fans because it may mean the end of TNT’s “Inside The NBA,” starring Charles Barkley, Kenny Smith, Shaquille O’Neal and Ernie Johnson. The show provides plenty of viral moments for the league and is generally considered to be the gold standard of sports studio shows.

Silver addressed the potential loss of the program.

“We take all those things into consideration,” Silver said. “I would just say I didn’t weigh losing ‘Inside the NBA’ more than we necessarily weighed losing that long term partnership with TNT.”