Can WBD build something out of a little bit of everything? (2024)

No media company has made as many headlines in the sports pages of late than Warner Bros. Discovery, which faces the potential loss of the NBA rights that its TNT Sports networks have carried for 40 years. Amidst the uncertainty over its NBA future, WBD has secured a handful of rights deals that point to a possible way forward with, or without, its anchor property.

In just the six weeks since its exclusive negotiating window with the NBA expired, WBD has acquired rights to French Open tennis for a reported $65 million per year, sublicensed College Football Playoff games from ESPN for a reported nine figures per year, and is said to be on the doorstep of acquiring a piece of Big East college basketball. Add to that list a previous deal with NASCAR that was secured last year.

With the exception of the French Open, WBD would not be the lead partner in any of these deals. The CFP deal includes two first round games per season — this season, those will be the two games that air directly opposite the NFL — and a pair of quarterfinals starting in 2026. The NASCAR deal includes just five Cup Series races per year, the same as fellow newcomer Amazon and well below the total carried by NBC and Fox. In the Big East deal, should it come to fruition, WBD appears to be the third partner behind the incumbent Fox and incoming NBC, which per Andrew Marchand of The Athletic would be in line for a portion of the Big East Tournament.

It would be a stretch to suggest that WBD struck these deals to replace the NBA, but they may point to a change in strategy that explains why the company faces the loss of its rights. For WBD, it appears that the goal is to have a little bit of everything — to prioritize an eclectic mix of rights at a relatively low cost, rather than spending heavily on a handful of core properties. If that means a relatively small piece of the pie, so be it.

As pertains the NBA, spending $2.3 billion per year (the NBA’s original asking price, per Bloomberg) for a reduced version of its current “B” package may be less attractive than spending less than half that total for an even-more-reduced “D” package consisting of games shaved off from RSNs. The difference in inventory is not trivial; even at a reduced level, the “B” package includes conference final games, earlier playoff rounds and presumably All-Star weekend. A “D” package would have none of those. Furthermore, a “D” package would almost certainly lack the kind of exclusivity one can expect of the “B” – there are only so many games the NBA can elevate from RSNs before triggering local blackouts.

Under David Zaslav, whose cost-cutting ways are well-known beyond sports, such compromises may be worth it in order to keep NBA rights at a drastically lower price. Anything in the neighborhood of $1 billion per year would qualify as an overpay for a ‘fourth package’ given the quality of the inventory, but Zaslav could claim fiscal prudence in comparing that price tag to those of Amazon ($1.8B/year), Comcast ($2.5B/year) and Disney ($2.6-$2.8B/year), or even the $2.3 billion/year WBD would have paid had it renewed during its exclusive negotiating period.

Zaslav could also claim fiscal prudence by ceding the rights altogether, but that would come with the reputational hit of being the executive who lost TNT Sports its most valuable programming, to say nothing of its popular “Inside the NBA” studio team. It is hard to imagine that Zaslav, who has taken more slings and arrows than most media executives, would be particularly perturbed by that possibility — but it might nonetheless become a problem for him when paired with the instability at CNN and any number of other controversies since WBD formed two years ago.

It remains to be seen whether the ‘little bit of everything’ approach is an actual strategy being pursued by WBD, and if so, whether it will be at all compelling to distributors. It makes sense that a channel with exclusive rights to some of the biggest events would be particularly expensive. Would it make sense to spend as much for a channel with a small portion of various marquee events?

Zaslav has publicly touted WBD’s expanding sports slate, but without noting the relatively paltry inventory. On a call last month, he mentioned that WBD had added a “summer of NASCAR” and “college football,” but those properties will combine for 7-9 telecasts per year. Most of the other, more extensive WBD deals were negotiated by prior management, from the AT&T-era pacts with the NHL and U.S. Soccer to as far back as the Time Warner era agreements to acquire March Madness and national Major League Baseball. WBD has yet to strike a deal of such significance — even its exclusive ownership of the French Open provides just two weeks of programming — and once the NBA rights are determined, the opportunities will be few and far between.

As strategies go (if it is indeed a strategy), WBD’s approach will at least keep it in the game should it lose the NBA — but for how long? That may depend on how it handles its other core properties. Other networks have lost a core property, and then another, and then another, until borderline irrelevance. NBC lost the NFL in 1998, MLB in 2000 and the NBA in 2002, and went nearly four years between “Big Four” telecasts until carrying the NHL in 2006. CBS lost the NBA in 1990 largely so it could acquire MLB, which it lost after just four years in 1993 – the same year it lost its longtime NFL package. CBS in the early 1990s and NBC in the early 2000s are not the company one wants to keep.

For WBD, the key may be holding onto MLB and the NHL when those rights are up in the next four years. Neither property is the NBA, but they still provide months of programming and exclusive rights to marquee postseason games. Without at least one anchor property — and at three weeks per year, March Madness does not qualify — ‘a little bit of everything’ is little more than a whole lot of nothing.

Tags: NBA Media Rights

Can WBD build something out of a little bit of everything? (2024)

FAQs

Is WBD a good buy? ›

Analyst Ratings

The average analyst rating for Warner Bros. Discovery stock from 20 stock analysts is "Buy". This means that analysts believe this stock is likely to outperform the market over the next twelve months.

Will Warner Brothers stock go up? ›

WBD Stock 12 Month Forecast

Based on 17 Wall Street analysts offering 12 month price targets for Warner Bros in the last 3 months. The average price target is $12.60 with a high forecast of $20.00 and a low forecast of $7.00. The average price target represents a 80.26% change from the last price of $6.99.

How many Warner Brothers movies are there? ›

Who owns the Warner Brothers? ›

Discovery owns Warner Bros. and eight additional business units including DC Comics, HBO, U.S. Networks Group, CNN Worldwide, TNT Sports, and Global Streaming & Interactive Entertainment. After the merger with AT&T and Time Warner Inc., Warner Bros. became part of WarnerMedia, which was then acquired by Discovery, Inc.

Where will WBD stock be in 5 years? ›

Long-Term Warner Bros. Discovery, Inc. Stock Price Predictions
YearPredictionChange
2025$ 6.66-4.75%
2026$ 6.34-9.28%
2027$ 6.04-13.59%
2028$ 5.75-17.69%
2 more rows

What is the price prediction for WBD? ›

Based on short-term price targets offered by 21 analysts, the average price target for Warner Bros. Discovery comes to $12.29. The forecasts range from a low of $7.00 to a high of $20.00. The average price target represents an increase of 71.65% from the last closing price of $7.16.

Who owns the most Warner Brothers stock? ›

Largest shareholders include Vanguard Group Inc, BlackRock Inc., State Street Corp, Harris Associates L P, VTSMX - Vanguard Total Stock Market Index Fund Investor Shares, XLC - The Communication Services Select Sector SPDR Fund, VFINX - Vanguard 500 Index Fund Investor Shares, Geode Capital Management, Llc, VIMSX - ...

What is the all time high for Warner Bros stock? ›

Historical daily share price chart and data for Warner Bros Discovery since 2005 adjusted for splits and dividends. The latest closing stock price for Warner Bros Discovery as of June 20, 2024 is 7.04. The all-time high Warner Bros Discovery stock closing price was 77.27 on March 19, 2021.

Will Warner Bros pay a dividend? ›

Warner Bros (IT:1WBD) does not pay a dividend.

Did Disney buy out Warner Brothers? ›

Warner Bros. Studios is not for sale and unlikely to be. As it is, Warner Bros. is an invaluable asset for WarnerMedia, AT&T and it's new HBO MAX streaming app, which is competing directly with Disney's Disney+ app. It seem extremely unlikely that they would want to part with the studio.

What is WB's highest-grossing film? ›

The most commercially successful film series from Warners include Harry Potter, DC Universe (formerly DC Extended Universe), Batman, The Lord of the Rings, and Monsterverse; Barbie is the studio's highest-grossing film worldwide with $1.4 billion.

Is Barbie made by Warner Bros.? ›

The film grossed $1.446 billion and achieved several milestones, including the highest-grossing film of 2023, the highest-grossing film ever released by Warner Bros., and the 14th highest-grossing film of all time.

How much of Warner Bros. is owned by China? ›

Flagship Entertainment Group
Company typeJoint venture
Number of locations3
Area servedWorldwide
Key peopleRichard Fox Elaine Feng (president)
OwnersWarner Bros. Discovery (49%) China Media Capital (41%) TVB (10%)
3 more rows

Who is the CEO of WB? ›

Discovery CEO David Zaslav's 2023 Pay Package Rises to $49.7M. The company disclosed latest annual compensation details for its top executives.

When did Warner Bros. buy Harry Potter? ›

Highly impressed by Rowling's work, he began the process that led to one of the most successful cinematic franchises of all time. Heyman's enthusiasm led to Rowling's 1999 sale of the film rights for the first four Harry Potter books to Warner Bros. for a reported £1 million (US$2,000,000).

What is the future outlook for WBD? ›

Future Growth

Discovery is forecast to grow earnings and revenue by 107.6% and 1.8% per annum respectively. EPS is expected to grow by 88.1% per annum. Return on equity is forecast to be 2.4% in 3 years.

Is Borg Warner a good stock to buy? ›

BorgWarner has 32.20% upside potential, based on the analysts' average price target. Is BWA a Buy, Sell or Hold? BorgWarner has a consensus rating of Moderate Buy which is based on 7 buy ratings, 3 hold ratings and 0 sell ratings.

Is WBD stock going to pay a dividend? ›

Warner Bros (WBD) does not pay a dividend.

Is WBD overvalued? ›

Undervalued with moderate growth potential.

References

Top Articles
Latest Posts
Article information

Author: Duncan Muller

Last Updated:

Views: 5983

Rating: 4.9 / 5 (59 voted)

Reviews: 90% of readers found this page helpful

Author information

Name: Duncan Muller

Birthday: 1997-01-13

Address: Apt. 505 914 Phillip Crossroad, O'Konborough, NV 62411

Phone: +8555305800947

Job: Construction Agent

Hobby: Shopping, Table tennis, Snowboarding, Rafting, Motor sports, Homebrewing, Taxidermy

Introduction: My name is Duncan Muller, I am a enchanting, good, gentle, modern, tasty, nice, elegant person who loves writing and wants to share my knowledge and understanding with you.