Media analyst theorizes TNT Sports’ future post-spinoff

The industry’s newest spinoff was announced this week as Warner Bros. Discovery revealed it would be separating its cable networks from the company’s streaming platform and film studio. It’s become a familiar playbook for media observers, and one that has sports fans facing the possibility of even more fragmentation.

Soon, TNT Sports will be separated from its parent company, cast off with other declining legacy media assets like Food Channel and Investigation Discovery. No one knows exactly how it will shake out. Where will sports fans be able to access TNT properties once the split happens? Will pay TV distributors continue to carry the networks after the expiration of current carriage deals? What streaming service, if any, will house TNT’s live games?

One media analyst has a pretty compelling theory for all of these questions. Rich Greenfield of media research firm LightShed Partners appeared on Wednesday’s episode of The Varsity podcast with John Ourand to lay out what he sees as the future for TNT Sports.

“If I’m sitting at [WBD spinoff] Global Networks, I have one job,” he said. “I’m no longer thinking about how I use linear networks to drive Max … so I’m not thinking about how I am the fuel driving streaming. I’m not saying, ‘Hey, I’m going to go out and get more sports rights because I want to add sports rights over to my streaming service.’ … If you’re sitting there at TNT and you’re running a math equation, you only want the sports rights to have just enough to survive and keep carriage. …Can they get enough sports to basically not lose carriage?

“I think that is [future CEO] Gunnar [Wiedenfel]’s only job. But the one thing I don’t think anyone is talking about … is that, after the next 12 months, while this split is happening, I don’t think you’re going to see Warner Brothers do anything. Like, I think they’ll figure out this one extra CFP game that was already part of the option, but I would be shocked to see them as a bidder for UFC, Formula One, Major League Baseball, the WWE PLEs. Like, I think Warner’s going to be in a, ‘Hey, we got enough. We’ve gotten our carriage deals recently done. We are not going to do anything to depress the cash flows of the linear networks anymore than they already are challenged right now. So I think you have a bidder coming out of the sports rights bidding process over the course of the next 12 months. I think this transaction overhanging them, they’re out.”

Greenfield, as usual, seems pretty spot on with this prediction. As he mentions later in the podcast, WBD looks to be timing this split to maximize the perceived profitability of its linear networks by launching when they will no longer be paying billions for NBA rights. If the goal of this new company is to maximize the profitability of declining assets, it doesn’t make much since to invest hundreds of millions into expensive sports rights that won’t directly translate to an increase in carriage or streaming revenue.

And given that WBD has tapped its current CFO Gunnar Wiedenfel to run the new company, an executive with no direct sports experience, it doesn’t seem like WBD is being too shy about that strategy.