Warner Bros. Discovery: NBA loss brings chaos to media business | Eulerpool news

While TNT’s loss of NBA rights is not a major issue for Warner Bros. Discovery’s ( WBD ) earnings call, the cable networks’ results underscore why the basketball league is an important 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 were in stark contrast to the results of the second quarter, when the broadcast of 42 NBA playoff games generated $2.21 billion in revenue – $724 million more than the non-NBA season. A similar pattern emerged last year, when revenue in the NBA playoff quarter reached $2.45 billion, a whopping $739 million more than the next period. Although this annual increase in revenue is expected, it is believed that this pattern may end after the exit of TNT next year when Comcast’s NBC Sports takes over the broadcasting rights. However, exiting the long-standing relationship with the NBA will also result in WBD saving on rights fees. Under the current 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 the current WBD executives may have contributed to the dissolution of the partnership. Wall Street analysts left the topic of the NBA unmentioned during the conference, with CEO David Zaslav confident that his company can prevail in future negotiations with Comcast. “I hope we will realize many collaborations,” said Zaslav, referring to the long-standing business relationship with Comcast CEO Brian Roberts. Wall Street analysts believe Roberts could lower WBD’s bids when the contract between the two companies comes up for renewal next year. Without NBA programming, it may be difficult to justify high broadcast fees. TNT’s bills alone add up to about $2.43 billion annually. On the other hand, WBD filed a breach of contract case 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 relations. Amazon will regularly broadcast NBA games from October 2025 and has acquired multiple broadcast rights through 2036. Overall, revenue from WBD’s network division grew 3% to $5.01 billion in the quarter, although its US business faces major challenges. Distribution revenue fell 7% to $2.6 billion, while the decline in subscribers was partially offset by a 5% increase in US affiliate rates. The direct sales arm reported an 8% increase in sales to $2.63 billion.