Warner Bros. Shares Drop After Losing NBA Media Rights as League Signs $77 Billion Deal

2 min read | July 25, 2024 10:39 AM PDT | By Team Kalkine Media

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Warner Bros. Shares Drop After Losing NBA Media Rights as League Signs $77 Billion Deal — Image source: shutterstock

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Warner Bros. Discovery loses its long-held NBA media rights, causing a significant decline in its stock value.

The company, which has broadcast NBA games through its TNT network since 1989, will also see an end to its related content, like "Inside the NBA."

The failure to secure a new deal amid a competitive bidding process has intensified the value of NBA media rights.

Warner Bros. Discovery (NASDAQ:WBD) has lost a major media rights agreement with the NBA, leading to a sharp decline in its stock price. The news was confirmed by the NBA in a statement on Wednesday, and Warner Bros.' shares fell by approximately 7% during early trading on Thursday.

This development marks a significant shift for Warner Bros., which has been broadcasting NBA games through its TNT network since 1989. The company has invested around $1.2 billion annually for these rights, which are set to expire at the end of the upcoming season. The loss of these rights represents a substantial setback for the media giant.

The impact of losing the NBA rights extends beyond just the games themselves. TNT’s popular basketball-related programming, including the critically acclaimed show "Inside the NBA," will no longer be associated with the network. The show, known for its engaging analysis and commentary by retired players Shaquille O’Neal, Charles Barkley, and Kenny Smith, has been a staple for basketball fans and a key component of TNT’s NBA coverage.

Warner Bros. Discovery’s inability to secure a new agreement comes after a protracted negotiation period that concluded on April 22. The failure to renew the deal triggered an intense competition among media companies to secure the NBA broadcasting rights, significantly driving up their value.

The NBA's new media rights deal, valued at $77 billion, reflects the heightened competition and increased financial stakes in securing exclusive broadcasting privileges. This monumental agreement with Disney, Comcast, and Amazon marks a major shift in the landscape of sports media rights and highlights the evolving dynamics in the industry.

The loss of the NBA rights and the subsequent stock decline emphasize the challenges Warner Bros. Discovery faces in maintaining its position in the competitive media market. As the company adapts to these changes, the departure from its longstanding relationship with the NBA will require strategic adjustments and new approaches to content and partnerships.

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