Warner Bros. Discovery Inc. is informing the professional-sports teams whose games are carried on three of its regional sports networks that it wishes to cease operating the channels and exit the business, the Wall Street Journal reported. The three regional sports networks were inherited by Warner Bros. Discovery Inc. when it acquired control of the WarnerMedia assets from AT&T Inc. The channels—which are still branded as AT&T SportsNet—serve teams in Pittsburgh, Houston, Colorado and Utah—and carry baseball, basketball and hockey. In a letter sent Friday from the unit’s president Patrick Crumb—a copy of which was reviewed by The Wall Street Journal—teams were warned that “the business will not have sufficient cash to pay the upcoming rights fees,” people familiar with the letter said. The teams were also told that Warner Bros. Discovery “will not fund our shortfalls,” they said. The letter proposes that AT&T SportsNet transfer ownership of the networks and programming rights to the teams for no purchase price consideration beyond a release by the teams of any future claims against the networks. Bankruptcy is also on the table, the letter said. “Unless we can reach a deal to transfer ownership of the network (and the attendant rights)” by March 31, “our only realistic option is to file for chapter 7 liquidation,” the letter to the respective teams said.
