A major power shift may be underway in the media industry as the National Basketball Association (NBA) prepares to renew its media rights. The NBA renews its media rights once every ten years, and its current deal with Disney (NYSE:DIS) and Warner Bros. Discovery (NASDAQ:WBD) is coming to an end after the 2024-25 season.
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Importantly, the National Football League’s media deal extends until 2033, which means the NBA could potentially decide who dominates the media industry for years to come, according to CNBC.
The number of players willing to jump into the ring is plentiful. Reportedly, Comcast’s (NASDAQ:CMCSA) NBCUniversal, Google’s (NASDAQ:GOOG) (NASDAQ:GOOGL) YouTubeTV, Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), and Netflix (NASDAQ:NFLX) could all join the race, with the exclusive negotiating window for the media deal coming up in April.
Live sports streaming commands major advertising dollars, and Netflix has been looking to make inroads in big sports. Last year, the streaming major unsuccessfully bid for live Formula 1 racing rights. If Netflix bags the NBA deal, it could boost the fortunes of its advertising tiers.
NBCUniversal also remains a contender for the deal, given its vast broadcasting and streaming presence. Google’s YouTube already has a global partnership with the NBA, and its over 2.7 billion worldwide monthly active users could greatly expand the NBA’s reach.
Interestingly, Disney has witnessed the impact of changes in media rights for live sports playing out in the Indian market. After the media rights for the Indian Premier League (cricket) changed hands from Disney to JioCinema, Disney found it difficult to grow its subscriber numbers. It is now looking to sell its Indian operations and has considered different potential transactions.
Which Media Stock Is Best?
Disney’s sagging fortunes are also visible in its stock price, which is down 9% so far this year. In contrast, Google, Apple, Amazon, Netflix, and Comcast have posted hefty double-digit gains year-to-date.
While WBD has posted only a single-digit price gain, the Street sees a mega 76.5% potential upside in the stock, based on a consensus price target of $18 and a Moderate Buy consensus rating.
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