(Reuters) – S&P on Friday downgraded its outlook for Warner Bros Discovery to “negative” from “stable,” citing declines in the media company’s cable television business due to a difficult advertising market and cable cancellations.

The rating agency said the move reflected its expectation that Warner Bros Discovery’s debt levels would remain high as declines in its traditional television business weighed on the company’s cash flow.

S&P reiterated its investment grade rating of “BBB-” for the company.

“The potential loss of the NBA television broadcast contract after the 2024-2025 season could further exacerbate challenges in the linear television broadcast segment,” S&P said in a statement.

Last month, the National Basketball Association awarded the rights to broadcast the league’s games to Walt Disney’s ESPN, Comcast-owned NBCUniversal and Amazon.com, ending a four-decade-old partnership with Warner Bros Discovery.

The NBA has contributed a significant amount to the company’s profits through advertising revenue on its linear TV portfolio and streaming service Max.

Analysts had expressed concerns about the loss of NBA rights, saying Max’s sports offering would be weaker without the league’s games.

Warner Bros Discovery has filed a lawsuit against the NBA after the league rejected its offer for the Amazon package.

The media company said it views the NBA as a “unique asset” that cannot be easily replaced and will impact the prices that TNT, Warner Bros Discovery’s sports network, can charge its advertisers.

(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Shilpi Majumdar)