Warner Bros. Discovery (WBD) stock closed more than 9% lower on Tuesday after the Wall Street Journal reported late Monday that Comcast's NBCUniversal (CMCSA) is working on a bid for an NBA rights deal that could move the league off Warner Bros.'s TNT network.
Tuesday's decline saw the lowest close since Feb. 24, 2009, for the stock.
According to the Wall Street Journal, NBC is nearing a deal to pay $2.5 billion a year to air a package of NBA games, more than double the $1.2 billion annual fee Warner Bros. Discovery currently shells out.
The package would reportedly include playoff and regular season games that would air on the NBC network, along with the company's flagship streaming service Peacock.
Warner Bros. Discovery was unable to strike a new agreement with the league before its exclusive negotiation period expired last week, according to the report. The NBA's current rights deal expires at the end of next season.
Disney (DIS), the NBA's other major broadcast partner, has reportedly agreed to increase its payment of $1.5 billion a year to $2.6 billion in order to renew its deal, according to the Journal.
Amazon (AMZN) is also in talks for a streaming rights package through its Prime Video service.
The interest in sports rights has escalated in recent years with tech giants like Amazon, Apple (AAPL), and YouTube (GOOG, GOOGL) committing more heavily to streaming deals over the past several years.
Amazon, which debuted the first Black Friday NFL game in November, agreed to spend $1 billion annually for its 11-year NFL Thursday Night Football deal, while Google's YouTube coughed up a reported $2.5 billion to acquire the sought-after rights to NFL Sunday Ticket.
Apple, meanwhile, announced a 10-year, $2.5 billion agreement with Major League Soccer in late 2022.
Those deals, funded by the deep pockets of Big Tech, have inflated the overall costs of sports as traditional media giants struggle to keep up amid steep streaming losses and major declines in linear advertising revenue.
Warner Bros. Discovery recently announced an upcoming "joint venture" (JV) sports streaming partnership with ESPN and Fox. Collectively, Disney, WBD, and Fox encompass about 55% of overall US sports rights currently.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at [email protected].
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