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Some other Warner Bros. Discovery cable networks are taking incremental value decreases in the coming years, I was told. And, perhaps the company's next renewal with Comcast is when investors start to feel the pain from losing the NBA.
But by that time, Warner Bros. Discovery is likely to look a lot different, either from divesting cable networks or merging with another media company.
This isn't a bust-out-the-champagne event. Simply steadying the ship for a few years rather than watching it sink isn't ticker-tape parade-worthy.
Still, in August, I wrote that CEO David Zaslav needed a win. I'd argue Monday's deal with Comcast was that win. Between the NBA settlement last month, strong streaming growth and the Comcast deal, Warner Bros. Discovery shares are up nearly 20% in the past 30 days.
Spokespeople for Comcast and Warner Bros. Discovery declined to comment beyond their published press release of the deal's consummation.
Speaking of "Inside the NBA" (TNT's NBA studio show with Ernie Johnson, Charles Barkley, Kenny Smith and Shaquille O'Neal), one faithful reader of this newsletter asked me a question last week to which I didn't have a ready-made answer: TNT is agreeing to produce "Inside The NBA" for ESPN, and in return, it has received Big 12 college football and college basketball games. How is that a fair trade? Isn't the production value of "Inside the NBA" vastly more expensive than the value of the Big 12 games?
I don't really have a definitive answer, but I did pick up some interesting tidbits. Barring a change, "Inside the NBA" will only go on the road twice next season - once for the opening week of the season and then again for the finals. As a TNT property, the show has gone on the road four or five times a season in the past. That will cut down the production budget significantly.
The value of the 13 football games and 15 men's basketball games that ESPN is giving to Turner is harder to pinpoint. The vast majority of the games were slotted to appear on ESPN+. That gives them low value - arguably in the low millions of dollars. But the value dramatically increases for Warner Bros. Discovery, both from an advertising revenue standpoint and as a tool in future carriage negotiations, because the games will now be on linear TV. Those games will also be simulcast on Max, the company's streaming service.
One more sports media item of note: Netflix is poaching talent from other networks to build a broadcast and studio team for its upcoming Christmas Day games. (More on this in next week's newsletter.)
CBS is loaning Netflix a broadcast booth of Ian Eagle, Nate Burleson and J.J. Watt for the 1 p.m. ET game between the Kansas City Chiefs and the Pittsburgh Steelers. The 4:30 p.m. ET game between the Baltimore Ravens and the Houston Texans will be called by a hodgepodge of other networks' employees: NBC Sports' Noah Eagle, Fox's Greg Olsen, and NFL Network's Jamie Erdahl and Steve Wyche.
Pregame show hosts include ESPN's Laura Rutledge and Mina Kimes, NBC's Devin McCourty and his brother, Jason McCourty, who works for both ESPN and CBS. The whole list of contributors can be found here.
I'm told Netflix built the ragtag team by approaching media companies with the NFL's blessing for particular people. Sometimes the answer was "yes," and sometimes it was "no." In addition to Olsen, Netflix also asked Fox for Tom Brady, I'm told (reported first by The New York Post), but Fox declined.
The media companies that said "yes" aren't helping Netflix out of charity. They're either getting paid by Netflix or there are concessions from the NFL or from the talent (who are getting paid for the game) that add value to the companies, according to people familiar with the matter.
Spokespeople for the NFL and Netflix declined to comment.
Still, the whole thing is kind of weird. Media companies are helping make Netflix’s broadcasts better, fully understanding that Netflix is using them as a showcase to the league. In other words, Disney, Comcast’s NBCUniversal, Fox and Paramount Global’s CBS are helping a future competitor — and one with more resources (both in balance sheet strength and subscriber reach) than any of them.
And yet, they’re still helping — because in the end, the NFL is more powerful than any individual company. Better to be a team player, even if it means helping a competitor, than a disloyal soldier.