During Warner Bros., as much as speak about the impending decline of TNT’s NBA right bundle was generally sidestepped, Discovery’s third-quarter income call Thursday, the findings at the cable systems segments went a long way toward underscoring why the group has been such a vital part of the company’s development plan. WBD’s global TV division generated$ 1.49 billion in advertising revenue on the quarter, which marked a 13 % year-to-year drop, as domestic sales fell 21 %. The comparison with the outcomes of the April-June third maybe best demonstrates the value of the NBA home, even though the third-quarter falls can be attributed to a smooth stateside advertising industry.
However, WBD stock rose about 12 % in sector investing Thursday, helped by direct-to-consumer figures involving streaming services Max, which reached a record quarterly customer get.
During the second quarter, when TNT televised 42 NBA postseason games—a slate that included the five nights of the Western Conference Finals—WBD whipped up$ 2.21 billion in ad revenue, or$ 724 million more than it earned in the subsequent, non-NBA quarter. The exact pattern persisted a year earlier, when WBD generated$ 2.45 billion in advertising sales during its significant NBA playoff quarter, surpassing the$ 739 million mark for the same period. Although it should come as no surprise that the time frame that coincides with the NBA’s postseason pushes WBD’s strongest advertising sales quarter is generally expected to clean up after next season when Comcast’s NBC Sports pushes TNT out of the industry. The company will save a lot on right taxes as a result of WBD’s historic partnership with the NBA. WBD will pay the league more than$ 1.2 billion to carry its final season of professional basketball in accordance with the terms of its legacy contract. NBA Commissioner Adam Silver made the suggestion next month that Warner Bros. has no “long-term relationship with the people currently in charge.” Discovery” perhaps had contributed to the dissolution of the partnership. In other words, things might have changed significantly if previous Turner Sports boss David Levy had n’t left the house after AT&amp, T’s purchase of Time Warner in 2019, had nurtured a long and mutually beneficial relationship with Gold and his predecessor David Stern in his three years at the firm. When asked how the NBA’s looming defection might affect WBD’s approaching carriage talks with Comcast’s pay-TV division, Wall Street analysts generally left any mention of the NBA on the bench during the call. However, CEO David Zaslav sounded convinced that his business will be able to carry its own during those negotiations. ” We do n’t talk about timing or really about specific deals, but]Comcast chairman and CEO] Brian]Roberts ] and I have been in business together for almost 40 years”, Zaslav said. ” We’ve done all kinds of offers … in order to create value for both companies. … [and ] I anticipate that we’ll collaborate significantly more in the future. WBD may struggle to justify the high rates it charges operators to carry its signals in the absence of six months of NBA programming. TNT alone charges a fee of$ 3 per sub per month, which adds up to about$ 2.43 billion in passive annualized revenue. ( As a caveat, many of these Wall Street projections appear to be based on portraying Roberts as a nearly cartoonishly Machiavellian figure, an assessment that does n’t quite align with observable reality. ) WBD has filed a breach of contract complaint against the NBA, alleging that Amazon Prime’s recent legal controversies have unwarrantedly pushed it away. TNT’s last year is wrapping up this flower, but that legal fighting is unlikely to have a significant impact on the team’s media partnerships. Per the terms of Amazon’s 81-page contract with the NBA, the streamer/online retailer will begin carrying at least 60 regular-season games starting in October 2025, as well as a generous allotment of playoff games. All told, the NBA will extract some$ 75.9 billion from rightsholders Disney, Comcast and Amazon over the course of the 11-year deal, which will run through the 2035-36 campaign. WBD’s networks unit saw revenue improve 3 % on the quarter to$ 5.01 billion, although the stateside business faced not-insignificant headwinds. Distribution revenue fell 7 % to$ 2.6 billion, driven by a 9 % drop in domestic linear pay-TV subscribers, a loss that was partially offset by a 5 % gain in U. S. affiliate rates. Ad revenue dropped 13 % to$ 1.49 billion, which marked a loss of$ 219 million versus the year-ago period, as domestic TV ratings plummeted 21 %. At the direct-to-consumer unit, revenue increased 8 % to$ 2.63 billion, as the streaming platform Max added a record 7.2 million customers, bringing its global sub count to 110.5 million. The U. S. market accounted for 52.6 million of those subscribers, with WBD commanding an ARPU of$ 11.99. ( By comparison, Max’s international subscriptions generated an average return per user of$ 4.05 .)

The DTC division’s$ 289 million profit, which included a$ 41 million hit related to WBD’s broadcast of the Summer Olympics throughout Europe, was up$ 178 million from$ 111 million a year ago. ( This story has been updated with end-of-day stock movement. )