As the NBA winds down on finalizing its next media rights deals with television and streaming partners, it looks like Warner Brothers Discovery’s property, TNT, will likely be sunsetting out of broadcasting NBA games for the time being.
On Thursday at a Bernstein conference, WBD CEO David Zaslav did not seem very concerned about that possibility.
“We love our experience with the NBA. But in general, we're a leader in sports... [with] a full buffet of content around the world," Zaslav said (H/T Yahoo!) after acknowledging the company is still in discussions with the league.
Zaslav’s comments ring familiar bells to comments from November, 2022, when he said “We don’t have to have the NBA,” in anticipation of the negotiation for the next round of broadcasting rights. He has repeatedly pointed to the other sports offerings WBD and TNT have to offer.
On paper, that is a fact. TNT has rights to MLB playoff games, NHL games, and NASCAR races, as well as March Madness. Globally, it also broadcasts English Premier League games in the United Kingdom as a part of a joint venture with BT Sport.
Will any of those offerings be as sticky to sports fans as NBA coverage has been?
None of the domestic offerings rival the immediate recognizability that Inside the NBA has, at least not yet.
TNT joined WBD in 2022 as a part of the divesting by AT&T, and the parent company has consolidated its brands and assets and streamlined with a globalization strategy. That move, and the debt WBD took on to make it happen, has frequently been pointed to as one of the challenges for re-engaging with the NBA on pricy new rights deals.
The company has hopes of making Max, its streaming offering, a global player. In sports, WBD has engaged in joint ventures that have made it a recognizable fixture for sports in the United Kingdom. TNT Sports, through its joint venture with BT Sport, just secured rights to EPL broadcasts for four more years in the UK.
That’s not just a small win for WBD. On its balance sheet the TNT Sports UK joint venture was primarily responsible for a 21% rise in the company’s “other revenue,” which amounts to about $75 million in 2023.
And looking at the financial side, skipping out on a reported $2.5 billion annual due to the NBA actually could improve WBD’s financials significantly. Zaslav is not wrong that the brand has a wide range of sports offerings – all of which may have a better dollars and cents cost-benefit – without its NBA coverage. But again, few if any of them feel like sticky enough brands to backfill the secret sauce of Inside the NBA.
The result, if WBD is unable to re-secure NBA broadcasting rights, is a diverse offering of sports content, but one that feels more like a mix of disparate parts than a well-curated offering of what its current consumers want. It’s a tension between the fiduciary responsibility of WBD to its shareholders as it looks to pay down debt and its need to keep fans watching.
In the short term, Zaslav’s strategy is sure to be judged, mostly by critics. Trading has displayed a broadly negative sentiment, with the stock price down earlier this month in close connection to the rumors about TNT likely not renewing NBA rights. The stock opened the year at $11.66 per share and has hovered around $8 in Q2 so far. Analysts have also praised NBC for going after the NBA’s rights and appearing to box out WBD.
In the long-term, though, perhaps clearing out the NBA offering frees up cash for WBD to further pay down its debts and improve its business standing. The decision to be unaggressive with NBA rights might not be preferable for fans, but it may eventually be for shareholders. And maybe over time, some of the newer offerings in the WBD profile will grow and become stronger brands. TNT's NBA offering has been on the air for over three decades, it did not become what it is overnight. The new areas of coverage, with time and effort, could strike similar emotional chords with fans.
As TNT has been sprung into the WBD merger and its continued strategy to globalize at scale and position for more M&A opportunities, a treasured property of NBA coverage seems to have been deprioritized in the mix, whether intentionally or not.
JOSH WILSON
