Warner Bros. action Discovery (WBD) closed more than 9% lower on Tuesday after the Wall Street Journal reported late Monday that Comcast’s NBCUniversal (CMCSA) was working on a bid for an NBA rights deal that could push the league away from Warner Bros. The TNT network.
Tuesday’s decline marked the lowest close since February 24, 2009 for the stock.
According to the Wall Street Journal, NBC is close to a deal to pay $2.5 billion a year to broadcast a package of NBA games, more than double the $1.2 billion annual fee that Warner Bros. Discovery is currently paying out.
The package would include playoff and regular season games that would be broadcast on the NBC network, as well as the company’s flagship streaming service, Peacock.
Warner Bros. Discovery was unable to reach a new deal with the league before its exclusive negotiation period expired last week, according to the report. The current NBA rights deal expires at the end of next season.
Disney (DIS), the NBA’s other major broadcast partner, has reportedly agreed to increase its payment from $1.5 billion a year to $2.6 billion in order to renew its deal, according to the Journal.
Amazon (AMZN) is also in talks for a streaming rights package through its Prime Video service.
Interest in sports rights has grown in recent years, with tech giants like Amazon, Apple (AAPL) and YouTube (GOOG, GOOGL) engaging more in streaming deals in recent years.
Amazon, which launched the first Black Friday NFL game in November, agreed to spend $1 billion a year on its 11-year deal with NFL Thursday Night Football, while Google’s YouTube coughed up $2.5 billion. dollars to acquire the rights sought on NFL Sunday Ticket. .
Apple, meanwhile, announced a 10-year, $2.5 billion deal with Major League Soccer in late 2022.
These deals, financed by the deep pockets of Big Tech, have inflated the overall costs of sports as traditional media giants struggle to keep pace amid huge streaming losses and significant declines in linear advertising revenue.
Warner Bros. Discovery recently announced an upcoming “joint venture” (JV) sports streaming partnership with ESPN and Fox. Collectively, Disney, WBD and Fox currently account for approximately 55% of all U.S. sports rights.
Alexandra Canal is a senior reporter at Yahoo Finance. Follow her on @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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News Source : finance.yahoo.com
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