New NBA Deals: Will Disney, WBD Take An Advertising Hit?: Analyst

NBA incumbent TV sports-rights holders Walt Disney and Warner Bros. Discovery could take a hit to their combined $1.4 billion in annual NBA ad revenue if NBCUniversal gets a piece of the big sports TV programming package, according to John Hodulik, media analyst of UBS.

Adding NBCUniversal into the current NBA live, linear TV networks lineup could mean a 15% to 20% reduction in total advertising dollars for Disney (ABC, ESPN) and Warner Bros. (TNT, TBS) -- currently at $809 million and $588 million, respectively.

NBCU could get 30% to 40% of the advertising inventory, according to Hodulik's projections.

That would mean a decline for Disney to $648 million and for Warner Bros. to $481 million.

NBCUniversal could see $519 million in annual NBA advertising dollars.

Looking at 18-49 viewers, UBS estimates that currently Disney gets a $70 CPM (cost per thousand viewers), with Warner Bros. coming in at $65 CPM.



Disney airs 96 hours of average TV commercial 18-49 NBA action, while Warner Bros. airs 75 hours.

This comes at a time when overall NBA rights fees could climb substantially -- to an estimated $2.6 billion on average per year for Disney (from $1.5 billion) and $2.5 billion for Warner Bros. (from $1.2 billion). 

If NBCU secures a deal, it is projected to also have a $2.5 billion-per-year average rights fee.

Amazon could also be a factor, and would impact advertising for Disney and Warner Bros., as it is reportedly also close to securing a streaming package.

Hodulik says it would also result in some ad inventory carved out from the incumbent deals.

1 comment about "New NBA Deals: Will Disney, WBD Take An Advertising Hit?: Analyst".
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  1. Ed Papazian from Media Dynamics Inc, May 3, 2024 at 7:32 a.m.

    Wayne, the real  question regarding the "hit" to the incumben't NBA ad dollars is profitability. How much do Disney and Warners net from their current deal and if they wind up with fewer NBA GRPs to sell are they better off if they simply add more commercials and talking head content to compensate? Based on the stats cited, the NBA games constitute a relatively small percentage of their respective all-content ad revenues.

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