TNT Sports on life support after Warner Brothers Discovery (WBD) splits the company
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Amazon is gonna scoop this.
Makes too much sense and it would be pocket change in the grand scheme.
Makes too much sense and it would be pocket change in the grand scheme.
Zaslav ruined everything.
Amid the seismic news of the WBD divorce, Zaslavâs hodgepodge of post-NBA sports assets will
find themselves in an excised cable company run by a severe belt-tightener. There are worse options, right? Right?! Actually, yes.
As recently as yesterday, TNT Sportsâs place in the U.S. media rights firmament seemed at least
momentarilyreassured. Yes, the network recently bid adieu to its multidecade relationship with the NBA, and fans will soon delight in seeing Chuck, Kenny, Shaq, and Ernie on ESPN, of all places, but TNT Sports seemed to be gaining momentum.
A successful fortnight broadcast of the French Open, up 23 percent year over year, culminated in a womenâs final featuring the American star Coco
Gauff. And the menâs finalâan epic five-and-a-half-hour, five-set matchâalready seems destined for history. Meanwhile, news broke over the weekend that TNT Sports would be sublicensing more College Football Playoff games from ESPN. And the network is less than three weeks away from producing the first race of its seven-year NASCAR deal.
And yet, all of the oxygen was sucked out of the room around 7:30 this morning when parentco Warner Bros. Discovery announced, after endless
speculation, that it would be splitting the company in half. Well-compensated quarter-zip enthusiast David Zaslavwould be making off with the glamour assetsâthe film studio, HBO, the streamer, and all the Warner Bros. I.P. His longtime C.F.O. and financial bad cop, Gunnar Wiedenfels, would be taking charge of the declining cable networks after the divorce, set to be finalized in the middle of next year.
The split had been near-assured ever since Zaz
reorganized the company into these separate units months ago. Indeed, Zaz and Gunnarâs multiyear plan of treating WBD like a public-market leveraged buyoutâpaying down debt while improving EBITDA marginsâhad never quite worked out. As recently as last month, an analyst from S&P Global prognosticatedâbefore downgrading the companyâs debtâthat WBDâs EBITDA would be stuck at
around $9 billion for the next three years.
The prediction, of course, was based on the rapid decline of its cable networks. âWe now forecast EBITDA at global networks will decline 20 percent to $6.5 billion due to accelerating revenue declines and elevated content costs from newly acquired sports rights content coupled with its last year of NBA rights in 2025,â the analyst, Jawad Hussain, wrote. (For more on this subtopic, read my partner Bill
Cohanâs prescient piece, The Zaz Downgrade Debacle.) Meanwhile, Zaz had raised eyebrows when he said that the companyâs sports rights were not a key driver for converting HBO Max subscribers in the United Statesâa view that runs counter to the way Paramount+ views CBS Sports and Peacock views NBC Sports. HBO Max will continue to carry live sports after the
split, but it seemed clear that neither Zaz nor Wiedenfels viewed HBO Max as an acceptable long-term solution for TNT Sports content.
Whatâs Next
Even if the move had been telegraphed, executives from many sectors of the businessâleagues, media, agencies,
etceteraâreacted with confusion about what this means for TNT Sports, which still has premier rights, including March Madness and both MLB and NHL postseason games. Zaz and Wiedenfels did not offer much guidance on a morning conference call.
Several of my sources suggested that a subsequent sale of the cable business seemed inevitable, especially considering the number of potential suitors in the marketârival media companies, streamers, and a ton of P.E. capital. Versant, the group of
cable channels spun off from Comcast, was mentioned as the most likely buyer, especially considering the companyâs C.E.O., Mark Lazarus, has said that heâs planning to be in the market for sports rights. (Versant is currently light on sports.)
And yet, GunnarCo needs TNT and its sports portfolio, along with other key assets, like CNN and the Food Network, to drive long-term rights deals with distributors. Another school of thought suggested that Wiedenfels always wanted
to be a C.E.O., and he likes the challenge of trying to turn a group of declining assets into a success. âI have full conviction that we will see very successful networks for many, many years to come,â he said on the conference call. The CFP sublicense deal with ESPN that leaked out over the weekend underscores this pointâitâs a legit bargaining chip with cable companies. âWe know sports remains a key pillar to support affiliate fee stability in the years ahead,â MoffettNathanson noted in a
report this afternoon. âWe expect WBDâs handling of its U.S. sports rightsâwhether through partnerships, licensing, or renewed distribution dealsâto be a focal point in shaping the trajectory of Global Networks.â
Regardless of what eventually happens, league executives say they still view TNT Sports the same way. TBS, TNT, and TruTV face the same problem the rest of the cable business does: Distribution is falling faster than ever. But TNT Sports will continue to have a seat at the table,
as itâs had for decades. In fact, TNT Sports C.E.O. Luis Silberwasser surprised many in the industry by pivoting after the NBA debacle to gather a smaller, more diffuse, and far more affordable portfolio of niche rights. (Silberwasser is also still in negotiations to pick up rights to one of the UFCâs packages.)
Some league executives praised the quality of TNT Sportsâs French Open coverage, which included five sets, a whip-around channel, and an effective social media
plan around Bleacher Report. The NBA auction may have drawn a boundary line between the haves and have-nots of the modern media landscape, but TNTâs response also articulated a new playbook for the subscale playersâand itâs one Laz is likely already studying.
Rayzah
I'm Everywhere you ain't never there
I said from day one this dude was an idiot but people were trying to say his plan was to focus on reality shows because they are cheaper to make and all these super hero shows are too expensive. I said that was dumb logic and fast forward a few years it looks like I was rightRight before a staple company goes bankrupt there is an idiot CEO who thinks hes smarter than the market and what the people want
it happens with so many companies
Miles Davis
Prince of Darkness
Sounds like the USRight before a staple company goes bankrupt there is an idiot CEO who thinks hes smarter than the market and what the people want
it happens with so many companies
AlbertPullhoez
The Takeover
If I was running TNT I'd try to get into combat sports.
I'd holla at them Saudis and try to get some of that bread for boxing
I'd holla at them Saudis and try to get some of that bread for boxing
Spidey Man
Superstar
TNT sports deserves to die for hiring Reggie Miller
Saysumthinfunnymike
VOTE!!!
In short, TNT sports isn't going anywhere because they still hold the rights to a ton of premier sports content and that's the only thing that people watch on TV anymore.
Netflix and Amazon in the cut right now. These networks are not going to be able to pay for these games for much longer because more people are cutting the cord.
CUTTING THE CORD ON REGULAR TV
YOU CAN WATCH WITH AN ANTENNA?
The antenna is not going to help with anything if the NFL, NBA and other sports leagues put all of the games on streaming services and cut off the networks. The biggest boxing fight is about to be on Netflix this September. Sign up or get left behind.
CUTTING THE CORD ON REGULAR TV
YOU CAN WATCH WITH AN ANTENNA?
