• by Wayne Friedman , Staff Writer, May 24, 2024

Regardless of the outcome for the rights to the NBA, Warner Bros. Discovery continues to be in a tough spot.

The company's monstrous $42 billion in debt is twice that of its market capitalization, which sits at around $20 billion.

Structurally, this debt was largely accumulated when Discovery Inc. bought Warner Media from AT&T in 2022 for $43 billion. 

This took place while a streaming marketplace still posted major growth, with WBD still being somewhat flat-footed in its response.

WBD's deal to buy Warner Media from AT&T was announced on 2021.

Even three years ago, the company had cable TV networks that were still performing with decent results -- with CNN, TNT, TBS, Discovery and HGTV among them. 

And perhaps more importantly, the deal came with a major studio, Warner Bros, as a big asset, still producing high-profile movie and TV content -- including “Barbie” a year ago and DC Comic superhero films.

But for all its media-buying machinations over the years, it still never owned an over-the-air-broadcast network or TV station -- an important asset for a media company. 

It is still viewed as important TV outlet by sports leagues looking for wide (remaining) reach of consumers. The NBA is ranked as perhaps the second-best-performing sports TV programming league -- only topped by the NFL.

This is not to say a cable TV network can't achieve high revenues and strong viewership from sports. For example, look at where ESPN is these days.

Looking at WBD's TNT (and TBS), for decades, and even today, TNT is still regarded a broad-based entertainment network, more or less modeled on a broadcast TV network -- one with scripted and unscripted entertainment series as well as sports.

But now that streaming platforms have taken the glitz and thunder from the business, TNT and TBS are not the focus and are destined to be lesser assets moving forward. 

This would seem to be a similar path to the one that big broadcast TV network Fox Television Network, has traveled -- where increasingly a healthy chunk of overall viewership and ad revenue now come from sports, this being the NFL and Major League Baseball.

The problem going forward is that TNT/TBS is not a broadcast network. Sports-wise, it only has the NBA programming through next season, with networks' deal with the NHL expires in 2028. It recently just secured some first-round College Football Playoff games from ESPN.

David Zaslav, CEO of Warner Bros. Discovery, has said the network does not "have to have the NBA." Okay then, but what then will it have?