With the NBA suspending its season, Disney’s ESPN and AT&T's TNT will be missing some of their most lucrative, highest-rated programming.
Analyst Michael Nathanson of MoffettNathanson Reserach has estimated that Disney will be losing about $481 million in ad revenue if the rest of the season and the playoffs are not played. For AT&T, the revenue effect is about $211 million.
Nathanson calculates that will translate into a drop in earnings of $306 million, 3% for Disney and $168 million in earnings before interest and taxes, or 2% for AT&T’s WarnerMedia unit.
Other revenues and costs are harder to determine, Nathanson said.
It is not clear whether or not the networks have to pay the NBA for games that are not paid.
“The answer to this question depends on each underlying contract and the definition of that contract. It is too soon to make a declarative statement as many of the networks appear to be reviewing their options. We also don’t know yet if networks have insurance to mitigate this risk,” Nathanson said.
It’s also not clear whether or not networks get paid by distributors for games that are canceled.
“Again, this seems to come down to the underlying contracts between distributor and network. There definitely are rules in place that pay each network for a minimum number of games,” he said.
He added that the delay in the start of the Major League Baseball season could have a big impact on regional sports networks, many of which are owned by Sinclair Broadcast Group and Comcast.
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