Paramount WBD merger could change sports rights strategy

A version of this article first appeared in the CNBC Sport newsletter with Alex Sherman, which brings you the biggest news and exclusive interviews from the worlds of sports business and media. Sign up to receive future editions, straight to your inbox. Turner Sports may be on the cusp of a complete reversal in strategy if Paramount ‘s deal for Warner Bros. Discovery is approved by shareholders and regulators. For nearly two years – around the time it lost its NBA live games – WBD’s Turner Sports has invested in a bunch of less expensive sports rights to fill the gap. In 2024, Turner cut a deal with ESPN to sublicense early round College Football Playoff games. Later that year, Turner scooped up French Open rights in a 10-year agreement . Turner followed that announcement with a multi-year agreement for the three-on-three women’s basketball league Unrivaled. WBD also renewed its deal with All Elite Wrestling that October. These smaller sports deals buoyed Turner’s existing portfolio of MLB, NHL, March Madness and Big East college basketball games. The point of these deals has been to support distribution for TNT and its sister networks (TBS, TruTV) during carriage renewal negotiations with pay-TV providers. WBD CEO David Zaslav and the team at TNT Sports, led by Luis Silberwasser, thought if TNT could pick up a bunch of smaller sports, the combined effect could essentially equal the distribution power of the NBA. The early results showed this strategy seemed to be working. Comcast struck a deal with WBD in late 2024 and TNT’s carriage fees remained flat despite the loss of the NBA. But while non-NFL and non-NBA sports rights are important, if not essential, to the survival of smaller modern media companies with cable exposure (such as CNBC’s parent Versant ), they’re not nearly as important to companies that already spend billions of dollars each year on marquee sports. The French Open or Unrivaled will have little effect on carriage negotiations for Paramount, which already owns rights to the NFL, The Masters, March Madness and Big Ten football and basketball. They also wouldn’t add many subscribers for a combined HBO Max-Paramount+ service. The platforms together have about 200 million subscribers, globally. Buying or renewing Tier 2 or Tier 3 sports — including packages of MLB and NHL regular season games —is probably not the best use of capital for a company that’s looking for $6 billion in synergies and has promised to make 30 theatrical films. The NFL will also be looking for a lot more money from its media partners when it begins renewal talks, likely later this year. TNT’s MLB and NHL rights are both up after the 2028 season. Had TNT been spun off with the rest of WBD’s cable networks to Discovery Global as planned before the Paramount agreement, renewing these deals would have been crucial. Now, as part of Paramount, those rights are far less important. Chances are Paramount may still want playoff games, but it may not want a bulky package filled with regular season games. MLB plans to completely revamp its media rights packaging after 2028. Puck’s John Ourand reported earlier this month the NHL is interested in trying to get a renewal done before the NFL reups its packages, but TNT Sports potentially moving under CBS may not bode well for those talks. I don’t see why TNT Sports would make a decision on the NHL before a deal with Paramount does or doesn’t get regulatory approval. This isn’t to say Turner will abandon sports. It likely has covenants with pay-TV providers that mandate a certain amount of live sports. And some of its current deals are long, such as the agreement with the French Open. Still, conversations with sports executives this week suggest it might be wise for CBS to cut the amount of sports on TNT to its bare minimum. The cable network no longer needs to rely on Turner deals for carriage. It now has the heft of the CBS portfolio. Already this week, Paramount CEO David Ellison said Paramount’s deal with UFC gives the company the flexibility to air matches on TNT. CBS also owns the rights to some less expensive sports, too – NWSL, UEFA Champions League, Italy’s Serie A, Pac-12 football and men’s basketball – that could easily find their way to TNT. “You might draw the line at a higher level than where it’s drawn in the past,” said a high-ranking sports executive about how CBS may treat acquiring sports for TNT and Turner’s other cable networks. That could be good news for companies like Versant, which are banking on sports rights becoming available under the same thesis that Discovery Global would have had. Fox CEO Lachlan Murdoch already mentioned a potential “rebalancing” of sports portfolios given the NFL’s looming increase. “We are prepared for the sports landscape to be shifting, and we will be in the middle of that,” Versant CEO Mark Lazarus said this week during Versant’s earnings conference call. It also may open up selling sports rights to new digital platforms, as suggested to me by NFL Media Chief Hans Schroeder earlier this month. It’s probably safe to conclude the combination of the NFL’s new media deal and a WBD-Paramount tie-up will be a catalyst for a major rights reshuffling after 2028. Jeff Shell’s future One reason Paramount could stay in the MLB business is its president, Jeff Shell, who is a huge Los Angeles Dodgers fan and has long touted the value of sports programming both at Paramount and previously as the CEO of NBCUniversal. But Shell’s future at a combined WBD-Paramount is very much up in the air. Shell, 60, hasn’t been involved in the deal talks or strategy of putting WBD and Paramount together, according to people familiar with the matter. He wasn’t on Monday’s Paramount investor call which included Ellison, Chief Strategy Officer Andy Gordon, and Chief Financial Officer Dennis Cinelli. Ellison will have an ample amount of executives to select as he puts together a combined team of leaders. At this point, Shell may have a role, but he also may not, said the people, who asked not to be named because the decision is private. Shell is also under internal investigation right now, though that’s not why he wasn’t on the call this week – rather, it had to do with his lack of involvement on the deal and potentially at a combined WBD-Paramount, said the people. A Paramount spokesperson and Shell declined to comment. Disclosure: Versant is the parent company of CNBC.