The jury is still out on whether Warner Bros. Discovery (WBD) will benefit more from the NBA next season or not, but one thing is certain: the parent company of TNT Sports will face significant challenges in the advertising arena. According to a report by Brian Steinberg of Variety, referencing media analyst Robert Fishman of MoffettNathanson, WBD is projected to lose $1.1 billion in television advertising by 2026, a staggering figure that would represent approximately 23% of its total advertising revenue this year.
TNT Sports has lost its NBA broadcasting rights to NBC and Amazon, who are reportedly paying an average annual value of $2.6 billion and $1.8 billion, respectively, for their packages. In response to this setback, TNT Sports has brought in several new live sports properties, including a pair of College Football Playoff games, the French Open, packages covering Big 12 and Big East games, a summer package of NASCAR races, and more, to enrich its programming lineup and sustain the carriage fees from cable and satellite distributors.
So far, this strategy appears to be effective, as WBD has secured distribution agreements with key carriers like Comcast and Charter at the same rates it had before the loss of the NBA. However, losing nearly a quarter of its annual advertising revenue poses a significant issue. While enhancing its live sports portfolio will assist the company in maintaining distributor fees, the volume of premier live sports windows is likely to decline.
The NBA is a high-volume sport, with TNT currently airing two regular-season games per week and increasing coverage during the playoffs. This translates to substantial marquee inventory, which five NASCAR races, one tennis tournament, two CFP games, and some lesser-tier Big 12 and Big East games cannot replicate in terms of drawing advertiser interest. Currently, TNT’s new offerings are untested on the network, and advertisers may be uncertain about the viewership numbers for events like the French Open. In contrast, after more than thirty years of NBA coverage, advertisers had a clear understanding of the anticipated audience size on TNT for that property.
Perhaps in a few years, once TNT has established its new portfolio, the network may see its advertising revenue recover. Until then, the immediate impact of losing the NBA will be significant.
