Warner Bros. Discovery (WBD) released its Q4 2025 earnings on Thursday, revealing a company grappling with the loss of its long-standing NBA live rights. While the company reported a net loss of $252 million—an improvement over the $494 million loss in the same period last year—the absence of the NBA is creating a noticeable ripple effect across its advertising revenue.
1. The “NBA Vacuum” in Advertising
The loss of live NBA games has created a structural drag on WBD’s advertising business that is expected to intensify throughout 2026:
- Q4 2025 Impact: A 4% drop in advertising revenue directly attributed to the lack of NBA content.
- Forecasted Slump: WBD expects this drag to hit 7% in Q1 2026 and jump to 20% in Q2 2026, primarily due to the loss of the high-revenue NBA postseason window.
- The Pivot: WBD CFO Gunnar Wiedenfels stated the company remains “open for business” but will prioritize “disciplined” rights acquisitions, recently pivoting to college sports and tennis.
2. The Battle for Ownership: Netflix vs. Paramount
As WBD navigates its financial transition, it remains at the center of a high-profile acquisition drama:
- The Netflix Deal: WBD currently recommends an $83 billion all-cash offer from Netflix for its studios and streaming business. A shareholder vote is set for March 20.
- The Paramount Counter: Paramount (CBS Sports parent) has submitted a revised offer, which WBD says could lead to a “company superior proposal.” Paramount views WBD as an “accelerant” for a CBS turnaround.
- TNT Sports Fate: Under the Netflix deal, TNT Sports would likely be spun off as an independent entity. In a Paramount merger, it would be integrated into CBS Sports.
3. “Inside the NBA” as a Cost-Saving Tool
Despite losing live games, WBD is leaning into its current pact focused on highlights and the production of the iconic “Inside the NBA” show.
- Operating Efficiency: Management argues that the loss in ad revenue will be “more than offset” by the massive reduction in rights fees and production expenses associated with live broadcasting.