RIP Inside the NBA (on TNT, at least)

We all knew the day was coming, but I think it came way before we thought it would – Inside the NBA (as we know it on TNT) will likely come to a close after next NBA season (2024-25). If you’re here, you probably know the magic we’re all at the risk of losing out on, but if not, here is a timestamped clip of one of the FUNNIEST moments I’ve ever seen on TV (that may also be new to some of you connoisseurs):

Amazon offers scale and global reach

From 2002 to 2024, the show has won 19 (19!!!) Sports Emmy Awards, and was inducted into the Broadcasting & Cable Hall of Fame in 2016 (3rd sports show after SportsCenter and Monday Night Football).

So why is the NBA (barring lawsuits) choosing Amazon over Warner Bros Discovery (TNT Sports)? After all, it has stewarded a fantastic show over two decades! The answer: GLOBAL USER REACH! Despite TNT allegedly matching Amazon $, Amazon was apparently able to pay for the first three years in full while WBD would have needed to take out a line of credit. The NBA is also partnering with ESPN and NBC (Roundball Rock!) to broadcast the games. Seemingly, to grab the biggest global reach while diversifying the audience, it makes sense that the NBA would want a diverse set of broadcasters for its product (Streaming via Amazon, Cable TV via ESPN, Broadcast TV via NBC).

Because I’m a nerd, I looked through the 10-Ks (annual financial reports) of both WBD and Amazon to try and find some user numbers for both companies. WBD was a bit more forthcoming with its DTC (direct to consumer) numbers, while I had to do some extrapolation for Amazon Prime users.

• WBD User Reach: ~140M
• Amazon Prime User Reach: ~250M

Bottom line: Amazon has a bigger and more global reach than TNT. And as the NBA is constantly trying to grow globally, the below numbers which show Amazon’s revenue by global region (which I’m extrapolating to Prime user location) illustrate this fact:

• US: 69%
• Germany: 7%
• UK: 6%
• Japan: 5%
• Rest of World: 14%

Why global reach is good for the NBA

A healthy 13% of Amazon revenue comes from Germany and the UK, and we can likely assume much of the rest of the world is comprised of other developed European nations, Canada, and Australia. From checking a few sources, it appears that there are approximately 80 current and former NBA players competing in the Olympics (12 of which are on the US team). While this may not be good for the US team’s chances of winning, having a healthy representation of NBA players from across the world should only continue to increase the quality of the NBA product (as evidenced by South Sudan’s almost-upset of the US team last week). Here is the list of countries and approximate number of current and former NBA players per country (different sources varied slightly on the exact rosters):

• US: 12
• Canada: 11
• Australia: 9
• France: 8
• Serbia: 7
• Spain: 7
• Brazil: 6
• Germany: 5
• South Sudan: 5
• Greece: 5
• Puerto Rico: 3
• Japan: 2

Amazon’s breakeven to pay Chuck

Now, let’s get to the nuts and bolts of how a streaming platform such as Amazon could afford the Inside Crew. We already know that $77 BILLION is to be paid to the NBA from these networks over 11 years ($7B/year). Charles Barkley is the Belle of the Ball, and we can be assured that ESPN, Amazon, and/or NBC are tirelessly working on how they can attract the Round Mound of Rebound to their networks. Charles Barkley did announce during last season’s NBA playoffs that he is planning on retiring, but fear not: I merely believe this was a shrewd negotiating tactic. The Crisco Kid has pulled this type of “negotiation” before, by discussing on-air the huge amounts of interest he was getting from LIV Golf before he re-signed with TNT for about $20M per season for 10 seasons. However, Bread Truck has mentioned he has an escape clause from TNT, which would open him up to “mucho dinero” from Bezos, NBC, or *shudder* – ESPN.

“I did not give you a vibrator” – Kenny Smith to Charles Barkley

Let’s focus on streaming for now – if we consider a baseline offer of $20M/year to Sir Charles (was he really knighted?), we’d like to know how many incremental Prime subscriptions Amazon would have to sell to pay his salary. $20M (Chuck potential salary) divided by $150 (Prime membership cost) = 133,334 incremental subscriptions. That is a 0.53% increase in subscriptions (based off of the 250M number above). Considering Amazon Prime subscription revenue has historically increased by 10-15% per year for the past two years (which I’m assuming tracks closely to subscription user numbers), 0.53% growth to pay the Chuckster’s annual salary seems super reasonable (and even possibly kind of cheap!).

Potential drivers of Chuck’s decision

Barkley already has a TON of money, but of course, pay is why we work! So, I believe his decision will come down to a few factors:

• Pay (what can I say; the dude loves to gamble)
• Colleagues
• Flexibility/Hours
• Ernie Johnson (EJ)

I believe ESPN is out as the “Inside” crew has cracked on them multiple times for overworking their staff (see above), so it’d likely come down to NBC vs Amazon. Both should be more than willing to open up their pocketbooks for the Chuckster. But the dude loves EJ – is there a world where Ernie would be able to stay on with Turner (which is his intention) AND work with the Chuckster? That’s for the smart people at the networks to figure out. Until then, we are going to have an absolute blast with the crew going out on (likely) their last season on TNT next season, guns blazin.

They’d have me on ESPN Deportes saying “Muy bien, gracias!” – Charles Barkley

And speaking of WBD/TNT, I’d be remiss if I didn’t roast them a bit more in this inaugural post of Vampire Financial. In the past, David Zaslav (Warner CEO) has mentioned to investors that Warner doesn’t “have to have the NBA” to operate in the media sector. As much as we hate it, egos play a huge part in these types of negotiations, and I’m sure Zaslav rubbed Silver the wrong way by saying this (and other things, probably).

WB execs have had a past of bad decision-making

In fact, WBD Executives’ decisions have not only impacted the TV world, but presumably the video game world as well. The awful, 60 Metacritic rated Suicide Squad game was released earlier this year (February 2024) under their watch, resulting in a $200M loss for the company in Q1 of 2024 (I actually have a hard time believing it didn’t lose even more money, but I’m sure accounting tricks were used). What’s even more egregious is that the quarter over quarter drop in revenue (from Q1 2023 to Q1 2024) for WBD was ~$400M due to the release of Hogwarts Legacy in the same quarter of the prior year (which, to their credit, was a relative banger with an 84 Metacritic score).

The Suicide Squad game was released by the previously revered Rocksteady Studios (Arkham Knight 2015, 87 Metacritic; Arkham City 2011, 94 Metacritic) which, as of late 2022, has been without its cofounders Sefton Hill and Jamie Walker. One can only assume that the dynamic duo saw the live services disaster that was afoot and skedaddled (to create a new studio in London called Hundred Star Games, which I believe they’re hoping to keep relatively lean).

The unfortunate reality of having a platform is that CONTENT is key. I’ve seen time and time again how platforms often forget that they are at the mercy of their content providers to stay relevant in the eyes of viewers. As a result, over time, they can develop a type of hubris which not only demoralizes current staff, but also potential content providers. WB Executives have made cuts to Turner Sports in the past, signaling decreasing NBA support while simultaneously demoralizing the Inside Crew.

In remarks to investors delivered in the fall of 2022, Warner CEO David Zaslav said he felt Warner doesn’t “have to have the NBA” to operate in the media sector.

Final thoughts on the Chuckster

So, what do you guys think? Assuming TNT is out, would you like to see Chuck on Amazon, NBC, or ESPN? Or should he quit in solidarity with his TNT crew? My immediate thoughts are that ESPN is out – not only because they work their folks like dogs, but also because they’d try to censor the hell out of Chuck – no culture fit there. I have faith that either Amazon or NBC would put a fantastic crew around Chuck (and cater to anyone he’d like to hire). I don’t know anything about the economics of broadcast TV, but I do know that cable TV seems to continue to bleed customers (although OTTs like YouTube TV might be slowing that down?), and that streaming might make the most sense for a 10+ year contract.

**Breaking – the above was just posted on X today. Not sure if/how this changes things…

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