Warner Bros. Discovery Loses NBA Rights to Rivals, Shares Drop as Company Faces Strategic Crossroads

The Rise of Amazon and Alternate Media

Shares of Warner Bros. Discovery (WBD) fell sharply by about 8% following the NBA’s announcement that it has secured broadcasting deals with competitors Disney, Comcast, and Amazon, effectively excluding WBD from professional basketball coverage. This loss is seen as a significant setback for WBD, particularly impacting its Max streaming service, which had counted on NBA content as a major draw. The loss of these rights could lead to a decrease in ad revenues and weaken bargaining leverage for cable affiliate renewals, exacerbating concerns about WBD’s financial health.

NBA Loss Sinks Warner Bros. Discovery Stock – Bad For Max, Could Hasten Linear Decline, Wall Street Fears https://t.co/LKVD7eO013

— Kamal Mustafa ✪ (@MeKamalMustafa) July 25, 2024

The exclusion has led to discussions among Wall Street analysts and investors about the company’s future, with some suggesting that WBD should consider splitting or merging again to stabilize its stock, which is trading below $8. Macquarie Equity Research downgraded WBD to “neutral,” citing the lost opportunity to retain NBA content as detrimental to the company’s streaming service’s appeal.

CNN parent company Warner Bros. Discovery Stock Plunges Over 6% on NBA TV Rights Loss
Macquarie Research, which downgraded the stock Thursday, argued that while WBD intends to litigate the decision, it’s “hard to see an amicable endgame…”https://t.co/2wfZHChvqD

— johnny dollar (@johnnydollar01) July 25, 2024

WBD did attempt to match Amazon’s streaming package offer, the least expensive of the three deals, but the NBA deemed it insufficient, opting instead for Amazon’s broader reach. The company has expressed intent to take “appropriate action,” potentially hinting at litigation, though the outcome of such actions remains uncertain.

Key Points:

• WBD shares drop 8% after losing NBA broadcasting rights to Disney, Comcast, and Amazon.
• Loss impacts Max streaming service and could reduce ad revenues and bargaining power.
• Wall Street suggests potential split or merger for WBD amid stock trading below $8.
• Macquarie Equity Research downgrades WBD to “neutral.”
• WBD attempted to match Amazon’s offer but was unsuccessful; possible litigation hinted.

Al Santana – Reprinted with permission of Whatfinger News