Warner Bros. Struggling Says Report
Warner Bros. Discovery (WBD), the parent company of CNN, is facing a potential struggle to maintain its NBA broadcast rights, which could prove to be a costly and difficult battle. The media conglomerate, which is already facing a declining stock price, could see its fortunes worsen as NBCUniversal (NBCU) reportedly prepares to double the current fee paid for NBA games.
According to reports by The Wall Street Journal, NBCU is ready to offer an average of $2.5 billion per year for the rights to air NBA games, potentially displacing WBD's longstanding partnership with the league. This figure is believed to be nearly double the current fee paid by WBD, which is already facing significant financial challenges.
Executives at WBD have long emphasized the importance of retaining the NBA rights, with former CEO David Zaslav famously stating in 2022 that the company "doesn't have to have the NBA." However, industry insiders have consistently emphasized the critical nature of these rights for WBD, with one media executive calling it a "must-have" for the company.
The potential loss of NBA rights could have significant repercussions for WBD, as it could impact the company's programming slate and partnerships. The network has built a strong programming lineup around NBA games, including popular shows like "Inside the NBA." In addition, TNT recently signed a new 10-year deal with WBD, further highlighting the importance of this partnership.
For a company struggling to sell its vision of a one-stop, all-encompassing streaming service, losing the NBA rights could deal a significant blow. WBD has been under intense pressure from investors and shareholders since it began trading on Wall Street in 2022, with its stock price plummeting by 70% since then. This new development could further add to the company's financial challenges, with shares hitting an all-time low of $7.36 on Tuesday.
The situation is even more challenging for CEO David Zaslav, who has struggled to convince investors of his plan for WBD's streaming service, Max. His hefty compensation package, which exceeded $50 million in 2023, has raised eyebrows, especially as investors watch the value of their assets dwindle.
Chief financial officer Gunnar Wiedenfels also received a compensation package of $17 million, adding to the optics of WBD's poor performance on Wall Street.
While legacy media companies are facing challenges in keeping up with the streaming revolution, they have long relied on live sports as one of the final pillars of traditional cable television. This makes securing sports rights more crucial than ever, as companies like WBD and Disney fight to retain audiences and attract subscribers to their streaming platforms.
And WBD is not alone in this struggle. Disney CEO Bob Iger has openly discussed the challenges he is facing, while Paramount Global is currently involved in merger talks as it fights to survive. The company has struggled to find its footing in the changing media landscape, and losing the NBA rights could add to its woes.