While Warner Bros. Discovery (NASDAQ:WBD) hasn’t been having much luck in the sports segment lately, even as it works to build a major new streaming sports hub, known as Venu, with Disney (NYSE:DIS) and Fox (NYSE:FOXA), one point did turn around in its favor. It just landed broadcast rights for one big sporting event for the next decade, and that was good news to investors, who sent shares up fractionally in Tuesday afternoon’s trading.
Warner set up a deal to broadcast the French Open, one of the biggest matches in tennis, in the United States for the next 10 years. Where previously NBC and the Tennis Channel handled broadcasts of the French Open, now it’s exclusive to TNT Sports. It will also appear on TBS, TruTV, and the Max streaming platform.
This is part of a larger initiative that’s seeing Warner push harder for more sports content even as it works to get its deal back with the NBA. The deal will set Warner back about $650 million for the term of the contract, an average of around $65 million per year.
A Moot Point in Advance?
This may be part of a larger plan B effort, particularly if Warner’s negotiations falter with the NBA. Venu is depending on sports content; that’s pretty much its whole reason for existence, after all. Without sports content—particularly the high-end stuff that draws viewers like the NBA—there’s not much point in it existing to begin with.
Warner may be trying to cobble together a coalition package without the NBA just in case it can’t get it. After all, six channels with a million viewers are pretty much the same as one with six million. Indeed, it may be an opportunity to bring in other partners to supplement the loss.
Is Warner Bros Discovery a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on WBD stock based on nine Buys, six Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 41.59% loss in its share price over the past year, the average WBD price target of $12.07 per share implies 47.74% upside potential.
