Warner Bros. Discovery CFO describes NBA loss as a ‘triggering event’ that shook the company

After losing the NBA media rights to Disney and Amazon last month, Warner Bros. Discovery has announced that they are currently evaluating their business, as they reveal how big of a blow they are suffering financially after what they call a “triggering event.” Nevertheless, they also explained how their failed negotiations aren’t the only reasons behind it. 

WBD reported that they earned a $9.1 billion non-cash impairment charge related to the company’s TV networks just during the second quarter of this year. “There’s a systematic process that we go through every quarter, and we’re monitoring for a so-called triggering event,” said Gunnar Wiedenfels, CFO for Warner Bros. Discovery.

“This is clearly where a discussion, like the one with the NBA, comes into play as a triggering event, which then compels us to reevaluate our business case in a strategic planning process with the latest assumptions, the best view of where the industry is and how we play in that in that field. That’s what then leads to a valuation,” he added this Wednesday.

Warner Bros. Discovery Posts Nearly $10 Billion Loss: The loss includes a $9.1 billion impairment charge tied to the plunging value of its linear networks. https://t.co/X8Tr9SnpbE ^WSJ #Business #Finance #CFO pic.twitter.com/adcUuXgds0

— Rick Telberg (@CPA_Trendlines) August 7, 2024

Then it was turn for CEO David Zaslav to talk about the loss of the NBA’s broadcasting rights, but the executive refused to refer to this situation and how it has impacted their cable assets. “I’m not going to speak to any specific negotiation or specific piece of content or IP,” he said while emphasizing that he’s dealt with carriage agreements for four decades.

“We’ve been very effective in that business, and it’s our job, whether it’s a food channel or an entertainment channel or a sports channel, to make sure that we have a very robust offering of content that nourishes and excites that audience,” Zaslav insisted.

Now that the NBA won’t be aired on TNT for the first time since 1989, the WBD organization has decided to sue the league as they assure that they matched Amazon’s proposal but were still rejected without opportunity.

Sources indicate that Adam Silver inked a new contract with Disney, NBC and Amazon that is collectively worth $76 billion. The offer that wasn’t accepted from Warner Bros. Discovery was reportedly a $1.8 billion-per-year package.

Analyst Charles Barkley reveals he won’t retire and will remain in TNT despite losing NBA rights

This came as a surprise, as the Hall of Famer had mentioned back in June that he wished to retire soon. Chuck noted that the upcoming NBA year would be his last in the broadcasting booth, especially after what eventually happened with the media deal negotiations.

The thing is, he had signed a 10-year contract extension with TNT Sports just two years ago, but felt in the dark all throughout the year as negotiations with the NBA seemed grim. After losing the media rights, Warner Bros. Discovery has decided to sue the league, as they believe they matched their opponent’s offer and were still rejected.

“I love my TNT Sports family. My No. 1 priority has been and always will be our people and keeping everyone together for as long as possible,” Barkley shared recently in a statement. “… I’m looking forward to continuing to work with them both on the shows we currently have and new ones we develop together in the future.

Chuck expressed why he feels such loyalty to his employers. “This is the only place for me. I have to say … I’ve been impressed by the leadership team who is fighting hard and have been aggressive in adding new properties to TNT Sports, which I am very excited about. … I’m going to give my all as we keep [fans] entertained for years to come,” he explained