Warner Bros. Discovery CEO David Zaslav held his cards closely to his vest Monday while speaking at a Milken Institute conference in Beverly Hills, largely sidestepping questions about the ongoing Paramount M&A process, not to mention Warner's existentially vital TV rights renewal talks with the NBA.
While assuring attendees that WBD is still in “"constructive negotiations” with the National Basketball Association on a new TV deal following an aggressive challenge for pro-hoops TV rights from Comcast last week, Zaslav declared: “It’s a great league. The TNT team does a terrific job. And we love the NBA.”
(A replay of Monday's panel, “The Corporate Compass: Charting the Role of the CEO,” is available to stream here.)
WBD’s stock price fell precipitously last week, following reports that Comcast is willing to pay as much as $2.5 billion a season to poach an NBA rights package held by TNT since 2007. The NBA's new national TV package starts with the 2025-26 season in October of next year.
Zaslav and WBD are facing the dilemma of either more than doubling their current $1.2 billion-per-season rights-fee payment to the league, or somehow finding a way to drive audience, advertising and revenue growth for a media business deprived of one of the most powerful live-sports assets.
“Losing NBA rights would be a big negative for WBD,” Macquarie analyst Tim Nollen said in a note to investors last week. “While the cost savings may help earnings, we think sports content is key both for linear TV ad sales and carriage fees, and for the Max streaming service's prospects in a competitive direct-to-consumer landscape, especially as it prepares to join the sports streaming [joint venture] with Disney and Fox.”
Zaslav was equally laconic regarding Paramount Global majority shareholder Shari Redstone’s ongoing efforts to sell her company, a key WBD rival — and partner.
“I know Shari well and they have a lot of great people there,” he said. “It’s in our interest for them to be successful. So however it turns out, I hope that they’re successful ... Our focus is to create more content and be on more platforms so that people spend more time and are willing to spend more money for what we create.”
Zaslav, who received a 26% compensation increase to $49.7 million in 2023 as WBD's stock price rose around 20%, did open up a bit more on the issue of executive pay.
“The majority of compensation should be aligned with the performance of the stock,” he said. “If the stock does well, then the CEO should do really should do much better. And if the stock doesn’t do well, the CEOs should not. I think alignment is critically important.”
We'll see if Zaslav's 2024 salary aligns with this ethos. Year to date, Warner Bros. Discovery stock is down around 35%.
