There’s a new contender in the arena.
As Discovery begins its new era of operating Warner Bros., HBO and Turner, all eyes are on how the new company will navigate the media sector’s streaming wars with thousands of hours of content from popular TV brands like TLC, TBS, TNT, CNN and HBO. Behind that effort, Variety reports, a new sports giant is poised to add another deep-pocketed player vying for major league negotiations that it previously ignored.
Warner Bros. Discovery, the newly combined company, will be home not only to Turner Sports in the U.S., but also Eurosport, a French TV network that holds European rights to broadcast the Olympics and is available in 54 countries. In February, Discovery entered talks that would combine Eurosport’s U.K. business with that of BT Sport in Britain and Ireland, creating another overseas beachhead. Turner already enjoys a significant relationship with the NBA; shared rights to the NCAA March Madness basketball championships; and rights to Major League Baseball and National Hockey League games.
Many of the traditional U.S. sports purveyors may have to give the company once known as Discovery a new look. “I believe Discovery-Warner led by David Zaslav will have a real appetite to build out their sports content, and they are likely to be at the table for major premium sports rights offerings over the next 36 months,” says Hillary Mandel, executive vice president and head of media for the Americas at IMG, in an interview. “They will be a global operator in the same way as Disney, Comcast, Paramount, Amazon and Apple are.”
The new media behemoth arrives on the scene as sports rights have become ever more critical to the health of the traditional pay TV business. As more consumers opt to stream their favorite dramas, comedies and reality programs on demand, live sports telecasts represent one of the few things that can generate the large crowds Madison Avenue craves and TV distributors still want. Rights fees have rocketed from exorbitant to prohibitive—witness Fox’s decision to let go of Thursday Night Football a season ahead of schedule so it could focus on sports it believes are a better fit with its audience and business—and any interest in battling from Zaslav’s empire will only create a more intense atmosphere at the bargaining table.
Most of the top-tier U.S. sports are locked down for the immediate moment. The NFL, MLB and NHL have all recently signed new rights deals that will keep them on the sidelines for the next few years. Even so, Discovery will likely find it has little time to rest. Early-bird talks with the NBA, whose rights pact with Turner and Disney is expected to lapse after the 2024-2025 season, could quickly spark in the next 12 months. And there may be some college-level sports rights that come up in the not-too-distant future.
Discovery’s next steps in sports likely won’t be known until the company hires a new executive to oversee it all. On Thursday, the company disclosed that it was “actively searching to fill the role of chair and CEO for Warner Bros. Discovery Sports,” which will report to Zaslav. Lenny Daniels, the president of Turner Sports and Patrick Crumb, president of the company’s regional sports networks, will report to the new hire.
Discovery’s key advantage is that it can offer both global reach via streaming and the traditional production services that many tech giants have been hard-pressed to replicate. Consider that Amazon’s new coverage of Thursday Night Football is being produced with help from NBC Sports, while Apple’s new streaming baseball coverage is the product of the league’s MLB Network.
“There will be opportunities to make joint international bids for some properties, easily,” says Patrick Crakes, a former Fox Sports executive who now works as a media-industry consultant.
That may be what many of the leagues will be looking for in months to come. Streaming gives them an opportunity not just to reach the young consumers who are abandoning traditional cable and satellite subscriptions and linear viewing, but to reach fans in countries where games aren’t typically seen. Indeed, in recent months, Paramount Plus has gone after UEFA Champions League rights while ESPN signed a deal with LaLiga.
Discovery has in recent years tried doing the opposite. It has focused on taking U.S. sports overseas. The company in 2019 launched GolfTV, a streaming joint venture with the PGA Tour, enlisting Tiger Woods to create content and programming as part of a wide-ranging deal and setting out ambitious plans to have the product available around the globe by 2024.
Expect the company to throw more of its sports weight around in foreign countries. “Eurosport in the U.K. has always been a distant third to Sky and BT,” says Daniel Cohen, senior vice president of media rights consulting at Octagon, an Interpublic Group sports-management firm. “Now, you combine that entity, and you are going to have some real muscle in a tier-one market that hasn’t had a lot of competition.”
At home, Turner has already started looking toward the future. Its most recent rights deal with the NHL and U.S. Soccer call for the ability to stream games on HBO Max—opening the possibility of that venue being eyed as a sports hub as well as a place for movies and high-quality scripted series. And the company has worked to spotlight a series of celebrity golf matches that draw big ad sponsorships, but aren’t contingent on rights agreements with leagues.
The only thing that would really surprise the sports world is if Discovery declined to to take a swing at any big sports-rights package that might emerge. “I think they have to become a more aggressive player in this space,” says Cohen.