Warner Bros. shares Discovery drops as NBC reportedly prepares a bid for NBA rights

Warner Bros. shares  Discovery drops as NBC reportedly prepares a bid for NBA rights

Warner Bros. shares Discovery (WBD) fell more than 9% on Tuesday after The Wall Street Journal reported late Monday that Comcast’s NBCUniversal (CMCSA) is working on a bid for an NBA rights deal that could move the league from Warner Bros.’s. TNT network.

With Tuesday’s decline, Warner Bros. shares are down. Discovery on track for lowest close since March 2009.

According to the Wall Street Journal, NBC is nearing a deal to pay $2.5 billion a year to broadcast a package of NBA games, more than double the $1.2 billion annual fee that Warner Bros. Discovery currently pays.

The package would reportedly include playoff and regular season games that would air on the NBC network along with the company’s flagship streaming service Peacock.

Warner Bros. Discovery was unable to reach a new agreement with the league before the exclusive negotiating period ended last week, according to the report. The NBA’s current rights deal expires at the end of next season.

Disney (DIS), the NBA’s other major broadcast partner, has reportedly agreed to increase its payment from $1.5 billion per year to $2.6 billion to extend the deal, the Journal reported.

Amazon (AMZN) is also in talks for a streaming rights package through its Prime Video service.

Interest in sports rights has escalated in recent years, with tech giants like Amazon, Apple (AAPL) and YouTube (GOOG, GOOGL) increasingly committing to streaming deals in recent years.

Los Angeles Lakers forward LeBron James, 23, dunks during the first half of Game 3 of an NBA basketball first-round playoff series against the Denver Nuggets in Los Angeles, Thursday, April 25, 2024. (AP Photo/Ashley Landis )

Los Angeles Lakers forward LeBron James, 23, dunks during the first half of Game 3 of an NBA basketball first-round playoff series against the Denver Nuggets in Los Angeles, Thursday, April 25, 2024. (AP Photo/Ashley Landis ) (ASSOCIATED PRESS)

Amazon, which debuted the first Black Friday NFL game in November, agreed to spend $1 billion annually for its 11-year NFL Thursday Night Football deal, while Google’s YouTube reportedly coughed up $2.5 billion to support the to acquire sought-after rights to NFL Sunday Ticket.

Apple, meanwhile, announced a 10-year, $2.5 billion deal with Major League Soccer in late 2022.

These deals, funded by the deep pockets of Big Tech, have driven up the overall cost of sports as traditional media giants struggle to keep up amid steep streaming losses and big declines in linear advertising revenue.

Warner Bros. Discovery recently announced an upcoming “joint venture” (JV) sports streaming partnership with ESPN and Fox. Collectively, Disney, WBD and Fox currently control approximately 55% of total U.S. sports rights.

Alexandra Canal is a senior reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.

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