Following the NBA’s announcement they were moving forward with their $1.8 billion per year deal with Amazon instead of TNT, parent company Warner Bros. Discovery’s stock price was down nine percent at Thursday’s market open and closed at $7.99. With the stock down 5.7 percent, the company lost approximately $1 billion in market value.
WBD shares has lost 36 percent of their value over the past year. WBD has been in a complicated situation where they couldn’t necessarily afford to keep the NBA, but also couldn’t afford to let it go.
“We have held onto our WBD rating in hopes that it would retain the NBA; losing these key rights means it now loses a core content asset for both its linear networks and its Max streaming service,” wrote Tim Nollen of Macquarie Equity Research in a note to clients. The firm downgraded WBD stock from “outperform” to “neutral.”
“[Linear] ad revenue will now drop sharply starting in [2025’s fourth quarter], and bargaining leverage on cable affiliate renewals now falls. But it’s the lost opportunity for the Max streaming service that worries us the most over time,” Nollen continued.
WBD attempted to match the Amazon package that is streaming only, whereas the “B” package going to NBC at $2.5 billion per year is most similar to what they currently have.
