Warner Bros. Discovery: NBA loss brings upheaval in the media business | Eulerpool News

While TNT’s loss of NBA rights wasn’t a key topic at Warner Bros. Discovery’s (WBD) earnings call, the cable networks’ results highlight why the basketball league was an integral part of the division’s programming strategy. In the third quarter, WBD’s television division generated $1.49 billion in global advertising revenue, down 13% year-over-year. US sales in particular fell by 21%. These declines are in stark contrast to second-quarter results, when the broadcast of 42 NBA playoff games generated $2.21 billion in revenue – $724 million more than the non-NBA period. A similar pattern emerged last year, when NBA playoff quarter revenue reached $2.45 billion, a whopping $739 million more than the following period. Although this annual revenue increase was to be expected, it is believed that this pattern could end following TNT’s exit next year when Comcast’s NBC Sports takes over the broadcast rights. However, exiting the long-standing relationship with the NBA will also bring WBD savings on rights fees. Under the existing contract, WBD will pay more than $1.2 billion for the final season of professional basketball. NBA commissioner Adam Silver suggested that the lack of a long-term relationship with WBD’s current executives may have contributed to the partnership’s dissolution. Wall Street analysts largely left the NBA topic unmentioned during the conference, with CEO David Zaslav confident his company can prevail in upcoming negotiations with Comcast. “I expect that we will realize many more collaborations,” said Zaslav, referring to the long-standing business relationship with Comcast CEO Brian Roberts. Wall Street analysts believe Roberts could drive down WBD’s affiliate rates when the contract between the two companies comes up for renewal next year. Without NBA programming, it could be difficult to justify the high broadcast fees. TNT fees alone add up to about $2.43 billion annually. Meanwhile, WBD has filed a breach of contract lawsuit against the NBA to challenge the decision in favor of Amazon. However, these legal disputes are not expected to have a significant impact on the league’s future media partnerships. Amazon will regularly broadcast NBA games from October 2025 and has secured lucrative broadcast rights until 2036. Overall, revenue from WBD’s network division improved 3% to $5.01 billion in the quarter, although its U.S. business faced significant challenges. Distribution revenue fell 7% to $2.6 billion, while the decline in subscribers was partially offset by a 5% increase in U.S. affiliate rates. The direct sales arm reported an 8% increase in sales to $2.63 billion.