Comcast, Warner Bros Discovery enter multi-year distribution deal

By Dawn Chmielewski and Paul Sandle

(Reuters) -Warner Bros Discovery (NASDAQ:WBD) signed a multi-year deal with Comcast (NASDAQ:CMCSA) that lays the groundwork for the European launch of the Max streaming service, and resolves a dispute over a coming “Harry Potter” TV series, the companies said on Monday.

Under the wide-ranging agreement, Warner Bros Discovery’s portfolio of TV networks, including TNT, CNN, and Food Network, will be available to subscribers of Comcast’s Xfinity service in the U.S. and Sky in Britain and Ireland.

The terms weren’t disclosed.

The deal came as Comcast warned of higher-than-expected broadband losses, sending its shares down 8.4%.

The agreement increases the overall fees Comcast will pay to distribute Warner Bros Discovery’s networks, sources say, though the rates will remain unchanged for TNT, which lost the rights to National Basketball Association games after this season.

The deal also resolves a legal battle between Sky and Warner Bros over rights to shows such as “Harry Potter”, two sources said. Sky had accused Warner Bros Discovery in a lawsuit filed in September of violating its option to partner in the forthcoming “Harry Potter” series. 

Andrew Georgiou, WBD UK & Ireland president, said the 2026 launch of Max in Britain and Ireland would be a significant step in its global rollout and “the place where audiences find incredible new shows, including the future Harry Potter series from HBO.”

The agreement expands Comcast’s rights to package ad-supported versions of Warner Bros Discovery’s Max and Discovery+ services with its streaming bundles. 

In the UK and Ireland, Sky Atlantic will distribute the ad-supported version of the Max streaming app, making it available in more than 10 million homes when it launches. Warner Bros Discovery will also sell Max directly to customers in Europe.

Warner Bros Discovery’s HBO shows like “The Sopranos,” “Game of Thrones” and “Succession” have been a linchpin of Sky’s offerings, alongside English Premier League soccer and other sports.

Sky customers will be able to continue to watch HBO’s existing franchises such as “The White Lotus” on the Sky Atlantic channel, Sky said.

Sky CEO Dana Strong said the deal solidified Sky as “the ultimate TV destination and the preferred partner of choice for streamers, rights holders and content creators alike”.

Warner is betting that the Comcast agreement, together with a deal reached earlier this year with cable and broadband provider Charter, will serve as a template for future negotiations with distributors. That could help stabilize pricing for the domestic pay TV market.

“These broad and multi-year agreements underscore the value and appeal of our … portfolio for audiences in the U.S.,” Bruce Campbell, Warner Bros Discovery’s chief revenue and strategy officer, said in a statement.