With the licensing fees Disney and Time Warner Inc. pay the National Basketball Association set to double for the upcoming season, FBR analyst Barton Crockett has lowered his rating for both media companies.
"At this point, we see the [Disney] studio at peak earnings this year, a level that can be maintained going forward but probably not growing much from here," Crockett wrote in a note to clients. "Cable network earnings will be pressured in FY 2017 by the step-up in NBA costs."
In October 2014, Disney and Time Warner Inc. signed a 10-year extension to their broadcast licensing agreement with the NBA, effectively doubling the $485 million a season Disney paid the league, and Time Warner Inc.'s $445 million-a-year tab.
Both increases come as subscriber growth on cable networks owned by both companies have stopped.
You can read all about the downgrade in this CNBC story.