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WBD Earnings: Can Zaslav Afford To Play Ball? [Parrot Analytics]

Warner Bros. Discovery rounds out the media and entertainment earnings cycle with huge question marks about its sports strategy and overall place in the industry.

Comcast entering the NBA rights chat will force WBD to at least more than double its current price to hang on to its rights, which would cost a reported $2.5 billion. The NBA has emphasized its desire for broadcast coverage, which may leave WBD in the cold when the final deal is signed. With WBD’s stock trading on seemingly every piece of news on the NBA deal, the stakes could not be higher. 

TNT’s Inside the NBA is a staple of the sports media world, and its very existence is in jeopardy. This coming just as host Ernie Johnson and co. narrate a wide open NBA Playoff race, with CEO David Zaslav’s beloved New York Knicks still in the running.

On the streaming side, Max is performing well with US audiences, and trails only Netflix in demand for all content available on the platform. Between the Warner Bros.-led movie slate and HBO’s iconic catalog, Max has an almost even amount of audience demand for both its TV and movie catalog. 

HBO is looking to tap its genre franchises to power subscriber growth for the rest of 2024. Season two of House of the Dragon debuts in June, followed by the Colin Farrell-led The Penguin and Dune: Prophecy later in the year. 

The bidding war for Paramount Global continues to take precedent with analysts and bankers. Despite Zaslav’s professed disinterest in being involved here, we take a look at what a combined version of these companies would like.

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It’s important to remember that WBD can now be sold as well. The conclusion to the Paramount sweepstakes may set a precedent for a potential new owner of WBD down the road. Considering HBO has had three different corporate owners in the last six years, this may happen sooner rather than later (regulatory obstacles notwithstanding).

Subscription Price x Demand Analysis


  • Charting the total demand for a platform against its subscription cost gives a good sense of the value Max provides to subscribers and how competitively priced it is relative to competitors.
  • Max appears to be one of the fairest priced major streamers, with its demand and cost in line. This suggests that the streamer could potentially increase prices again and only experience minimal churn.
  • In contrast, Hulu as a standalone service looks slightly overpriced, while Netflix could easily raise prices without much consumer backlash.

On-Platform Demand Share

  • While demand for original content drives subscription growth, library content is key for customer retention, an increasingly crucial element of all streaming strategies as consumers have more choice and easier ways to cancel than ever.
  • Max in Q1 2024 (16.1%) trails Netflix, but stood higher than it did last quarter (15.6%), and well ahead of HBO Max in Q1 2023, at 14.4%.
  • Max solidified its grip on second place in this category, moving from a 0.4% lead over Hulu in Q4 2023 to a 0.8% lead in the latest quarter. The return of the critically acclaimed Hacks in Q2 and the IP-powered slate of Q3 and Q4 will try to build on this lead.
  • A fully combined Hulu (15.3%) and Disney+ (10.0%) is positioned to top both Netflix and Max when it comes to total on-platform demand for content.

M&A Cheat Sheet: WBD and Paramount

  • After strategic leaks to the press to test the waters in late 2023, Zaslav has thrown cold water on the idea of a Paramount merger. Nevertheless, until a deal is done, it’s worth exploring what these combined companies would bring to the table from a content demand perspective.
  • If Paramount were acquired by WBD and its sports rights added onto the Spulu offering, this would significantly boost the value of a standalone sports streamer, bringing in CBS Sports (i.e. more NFL games) into the fold.
  • While Zaslav built his business on cable, it’s unclear whether he has the stomach to further expose his company to the shrinking linear TV business.

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