WBD Taking a Cautious Approach to Sports Media Rights: Here’s Why

Don’t expect Warner Bros. Discovery to be a highly aggressive player in pursuing additional sports rights.

The TNT Sports parent has spent the last year reconstructing much of its sports portfolio, in part by losing and then retooling its NBA relationship, acquiring French Open and Unrivaled rights, and deepening its ties in college sports.

The company, however, made it very clear Thursday that it will maintain a “disciplined” and “opportunistic” approach with regard to any future rights, such as those now becoming available with entities such as Major League Baseball and UFC. 

“We don’t need any more sports anywhere in the world in order to support our business,” WBD CEO David Zaslav said in an earnings call with analysts. “It’s going to get more difficult, some of those prices being paid.”

Zaslav’s comment bears some similarity to the infamous one he made in 2022 in which he said WBD “didn’t have to have” a new deal with the NBA. That remark ultimately foretold what the company now describes as a “far more efficient long-term relationship with the league,” but one without live game rights. 

Broader Results

WBD’s current sentiment regarding sports certainly does not exist in a vacuum. Rather, the company is navigating a delicate situation in which its streaming operations continue to show strong growth, but challenges in other parts of the business are dragging down their broader financial picture.

The fourth quarter ended with WBD holding 116.9 million streaming subscribers, mostly on Max, an increase of 6.4 million from the prior period—with expectations now forming to hit 150 million subscribers by the end of 2026. That DTC operation is also increasingly profitable, posting $677 million in adjusted earnings last year, more than six times the comparable $103 million for 2023. Max has been an industry standout, in part due to a particularly fruitful alliance with Disney.

Overall, though, WBD posted declines last year in revenue, adjusted earnings, and free cash flow as the company was particularly hit by a decline in linear advertising. 

“The U.S. linear advertising market has deteriorated faster than we expected, as evidenced by our results over the last several quarters,” WBD acknowledged in a letter to shareholders.

Because of that, Zaslav has repeatedly touted the virtues of developing film and TV properties it “could own” and leverage long-term, as opposed to shorter licensing agreements in sports.

“We would buy sports [content] if we think it would enhance our business,” he said.