David Zaslav made a statement in 2022 that Warner Bros. Discovery did not need to have the NBA, but the stock market disagreed, causing WBD’s stock price to plummet nearly 10% after a report signalled an expensive battle to maintain NBA broadcast rights. Industry insiders stressed the importance of retaining these rights, as other companies such as NBCUniversal were prepared to pay a significantly higher fee to air the games. TNT, a key component of WBD’s business, has built its programming around NBA games, making it crucial for the conglomerate to secure these rights.
While WBD also holds rights to other sports like NCAA March Madness, MLB, NHL, and NASCAR, the NBA remains crucial for the company’s success. Losing the NBA rights could impact the company’s ability to charge distributors for its channels. Additionally, a recent deal with Disney and Fox Corporation to launch a sports streaming service could be impacted by a loss of NBA rights. WarnerMedia’s streaming service Max has also been promoted as offering live sports, making the loss of NBA games a blow to the platform’s appeal.
Despite ongoing negotiations, the potential loss of NBA rights comes at a challenging time for WBD and its CEO David Zaslav. The decline in stock value since trading began in April has reached approximately 70%, raising concerns among investors. Zaslav’s hefty compensation package of nearly $50 million in 2023, along with the CFO’s compensation, raises questions about executive pay as the company struggles on Wall Street. Legacy media companies are also facing challenges as consumers shift towards streaming platforms, posing additional obstacles for WBD and its competitors.
Sports rights are becoming increasingly crucial for traditional media companies as they vie for audiences and attempt to compete with streaming services like Netflix. Live sports have been a lucrative aspect of the cable television package, and securing these rights is vital for companies like WBD. The battle for NBA rights comes at a challenging time for Zaslav, who is working to establish a one-stop streaming service to compete with industry giants. With the future of legacy media companies uncertain, sports rights have become a crucial asset in maintaining viewership and attracting consumers to streaming platforms.