Who gets TNT Sports when Warner Bros Discovery splits?
WBD has invested heavily in acquiring rights to athletic competitions for TNT Sports, but a business split is raising questions about its long-term sports strategy.
For months, rumors have swirled that executives at Warner Bros Discovery (WBD) were considering a split of its cable networks business from its more-lucrative studios and streaming units.
On Monday, the company affirmed it will do just that, ending speculation about its long-term business plans, but raising questions about specific assets, including sports.
During a late-morning conference call with investors and reporters, WBD CEO David Zaslav — who will be the new head of WBD’s “Studios & Streaming” business — affirmed the company’s domestic and international live sports units will move into the new “Global Networks” business, to be led by current WBD Chief Financial Officer Gunnar Wiedenfels.
For now, WBD’s live sports unit, TNT Sports, will continue to make sports available through WBD-owned streaming services, Zaslav said, but that could change in the near future.
“The Global Networks business will evaluate over time where the best place for that is,” Zaslav said on the call, noting that sports on Max has been “less critical” to streaming subscriber growth and retention.
WBD’s complicated sports streaming effort
Until recently, WBD limited the availability of streaming sports to its apps and services outside the United States.
In Europe, fans of the Olympics and other sports whose rights are held or shared by WBD have long enjoyed access to live events through Discovery+, which offers near-24 hour simulcasts of Eurosport, as well as event-specific spillover channels. The amount of live sports increased on those platforms in some countries like the United Kingdom, when WBD acquired networks like BT Sport, which now operates as TNT Sports there.
In the U.S., the availability of TNT Sports on streaming was largely limited to services that carried WBD-owned channels through traditional-style bundling arrangements — NBA and March Madness games were only available if an app or service also carried other WBD networks like CNN, TBS and Cartoon Network.
That changed in September 2023 when WBD finally made live sports available on Max through a “B/R Live” add-on, which was included for free with any Max plan until WBD relegated to its more-expensive tiers two months ago.
By most accounts, WBD was late to the party — Comcast, Paramount and a number of its other peers had offered live sports through their standalone, direct-to-consumer apps for a while. Delaying the availability of live sports on Max proved WBD executives felt their best opportunity to see a return on their financial investment in sports was to stick with legacy pay TV models.
To an extent, that strategy made sense. Fox executives have long touted pay TV as the best way for the company to see a return on its investment, because it can generate money off cable subscribers in two ways — through distribution fees and advertising.
But Fox also has a broadcast network, which allows sports fans to watch their premium offerings like NFL games, NASCAR races, MLB and college football for free. When it comes to sports, broadcast is still the platform with the best possible reach.
WBD doesn’t own any broadcast networks. So, in the era of streaming, its strategy of relegating NBA games (which are moving to Comcast and Amazon), tennis matches and March Madness to cable TV wasn’t going to work. In the U.S., it brought sports to streaming too late. Now, it’s throwing in the towel.
So, what’s next?
Soon, WBD will be divorced from its live sports business, because TNT Sports will be relegated to the new “Global Networks” unit to be led by Wiedenfels. While licensing TNT Sports to HBO Max is the simplest path, it doesn’t mean it’s the best one — and, given Zaslav’s willingness to part with TNT Sports and his lukewarm comments about its current effect on Max subscriptions, there are few promising signs of a tie-up between WBD and TNT Sports in the future.
On Monday, CNBC’s Alex Sherman speculated that Versant — the forthcoming business that will consist of Comcast’s cable networks portfolio, except Bravo — could acquire the TNT Sports business from WBD’s “Global Networks.” The guess is rooted in a quote Sherman obtained from Versant CEO Mark Lazarus, who said he wanted to acquire more live sports rights for his networks once the split from Comcast is done.
Comcast and WBD have worked together in the past, but the arrangements were largely based on cable networks distribution — Comcast’s Xfinity TV carries present-day WBD-owned channels — and scripted content, with Universal and Warner Bros. developing shows and films for each other’s networks. The two sides have never executed on a sports-focused deal.
Disney, however, has. The owner of ESPN has licensed college football games to TNT Sports in the past; over the weekend, Front Office Sports reported that ESPN will build on its existing agreement by licensing one college football game to TNT Sports, starting in 2026. Also starting that year — ESPN will begin airing “Inside the NBA,” the long-running NBA pre-game and post-game show that TNT will continue to produce.
The relationship could be taken to the next level if ESPN and TNT Sports agree to swap or simulcast more programming. For instance, ESPN could sublicense more college football games to TNT Sports — and perhaps even sweeten the deal by adding other live events, like La Liga and Premier League soccer matches — which would given WBD’s Global Networks more ad inventory to sell to prospective buyers who want to run spots against live events.
On the flip side, TNT Sports could agree to license its own live sports for ESPN’s streaming platforms. Later this year, ESPN will launch a new streaming plan called “ESPN Ultimate,” which will offer live simulcasts of its cable networks and events from ESPN+ for $30 per month. A high price to pay for sports fans, but one that becomes more palatable if ESPN Ultimate also includes TNT Sports.
Fox may also want in on the deal as it readies its own service, called Fox One, which will offer live access to the company’s broadcast, news and sports channels over streaming for around $20 per month. Executives at Fox and WBD have already discussed bundling Max and Fox One together when the latter launches in the fall, according to two sources who spoke with Multicast News and TheDesk.net earlier this year.
Those conversations may evolve over time to include offering TNT Sports through Fox One on an exclusive basis — which could also open the door for a limited amount of TNT Sports programming to air on Fox, FS1 and FS2. That move would also benefit whoever decides to bundle Fox One with their other services down the road.