Warner Bros. Discovery Inc. (WBD) closed down 1.14% on Friday after news broke that the company is looking to end its management of three regional sports TV channels. According to a report from the Wall Street Journal, an executive from the business told the sports teams that bankruptcy was an option and that the business would not have sufficient cash to pay the upcoming rights fees. Furthermore, Warner Bros. Discovery will not be funding any shortfalls.
In a letter obtained by the Journal, the executive proposed that the channels, which are under the AT&T SportsNet brand name, transfer ownership of the networks and programming rights to the teams for no purchase price consideration, other than a release by the teams of any future claims against the networks. The letter also stated that if a deal to transfer ownership of the network is not reached by March 31, “our only realistic option is to file for chapter 7 liquidation.”
The news of Warner Bros. Discovery’s potential exit from the regional sports TV management business has caused some concern among the teams that are affiliated with the channels. Without the company’s financial backing, the teams are facing the possibility of having to pay for the rights fees themselves, or having to find a new partner to help manage the channels.
The regional sports TV channels managed by Warner Bros. Discovery provide coverage of professional sports teams in Colorado and Utah, as well as Pittsburgh and Houston. The channels have become a vital source of revenue for the teams, as well as a way for fans to stay connected with their favorite teams. Without the channels, the teams could potentially lose out on a major source of revenue and fans could be left without a way to watch their favorite teams.
The news of Warner Bros. Discovery’s potential exit from the regional sports TV business has left many teams in a difficult position. Teams are now scrambling to try to find a new partner to help manage the channels, or to come up with the funds to cover the rights fees themselves. It remains to be seen what will happen, but it is clear that the teams are in need of a solution to this problem, and soon.
Warner Bros. Discovery’s potential exit from the regional sports TV business could have far-reaching consequences for the teams and fans that rely on the channels for coverage of their favorite teams. With no clear solution in sight, teams and fans alike are left to hope that a deal can be reached in the coming weeks that will allow the channels to continue to operate as normal. Until then, teams and fans will have to wait and see what the future holds for the regional sports TV channels.
