In a significant legal development, the NBA has filed a motion to dismiss the lawsuit brought against it by Warner Bros. Discovery, alleging that the league breached its contract by rejecting their matching offer for a new media rights deal. The NBA recently secured an 11-year media rights deal worth nearly $76 billion, involving partnerships with Disney, NBC, and Amazon Prime Video, marking an end to their nearly 40-year relationship with Turner.
Contract Disputes
The lawsuit revolves around Warner Bros. Discovery's claim that their offer to match Amazon's proposal for the new media rights agreement was unfairly rejected by the NBA. However, the NBA's legal response outlines several discrepancies in Warner Bros. Discovery’s attempt, emphasizing amendments to significant portions of Amazon's offer.
Warner Bros. Discovery reportedly made substantive revisions to eight of Amazon's 27 sections, redefined 11 key terms, struck out nearly 300 words, and added over 270 new words. The NBA highlighted that Amazon's proposal included an upfront payment requirement of approximately $5.4 billion held in an escrow account, but Warner Bros. Discovery suggested syndicated letters of credit instead of fulfilling this escrow requirement.
NBA’s Defense
The NBA's defense, encapsulated in a 28-page motion and accompanying documents, asserts that Warner Bros. Discovery did not effectively match Amazon's offer due to these significant alterations. The motion requested the dismissal of the lawsuit with prejudice, which would prevent Warner Bros. Discovery from filing another suit on the same grounds.
Bill Koenig, president of NBA global content and media distribution, stated unequivocally, "The response made by TBS does not qualify as a match." The league's stance is based on the substantial changes made by TBS, the cable network operated by Warner Bros. Discovery, in their response to Amazon’s original offer.
Broadcasting Plans
Under the newly inked agreement, Amazon Prime Video will broadcast NBA games on Friday nights, select Saturday afternoons, and Thursday night doubleheaders after "Thursday Night Football." Moreover, Amazon’s deal includes exclusive coverage of crucial NBA Cup stages and the NBA League Pass package. This comprehensive broadcasting plan underscores Amazon's growing footprint in live sports and marks a new era for how NBA games will be consumed by fans.
The NBA presented Amazon's offer to Warner Bros. Discovery on July 17, and Warner Bros. Discovery responded five days later, claiming a successful match. However, the NBA rejected the response on July 24, citing multiple discrepancies, which ultimately led to the current legal confrontation. The league argued that if TBS sought linear TV distribution rights, it should have matched NBC's more expensive third-party offer instead of attempting to combine Amazon's lower price with the linear television rights granted to NBC.
End of an Era
The new media rights arrangement entails an end to the NBA's long-standing association with Turner, a relationship that has been a staple of NBA broadcasts for nearly four decades. TBS, a Turner-operated network, chose not to match NBCUniversal's offer, despite it enabling TBS to continue distributing games via its TNT linear cable network. Instead, TBS aimed to match Amazon's less-expensive offer but revised it significantly, making substantive changes to align it with their traditional distribution rights.
The NBA's filings state, "Far from accepting each term of Amazon's offer, TBS's revisions constituted a counteroffer that the NBA was free to reject." This line of reasoning forms the crux of the NBA’s defense against Warner Bros. Discovery's allegations of contract breach.
TNT Sports responded, reinforcing their position, "Not only is it our contractual right, but it is in the best interest of the fans who want to continue to enjoy our industry-leading NBA content with the choice and flexibility we offer them through our widely distributed platforms including TNT and Max."
As the legal proceedings continue, Warner Bros. Discovery has until September 20 to file its response. The resolution of this dispute will be closely watched by industry stakeholders, with significant implications for future media rights negotiations and contracts within the sports entertainment sector.