In a dramatic turn of events, the NBA has filed a motion to dismiss a lawsuit brought against it by Warner Bros. Discovery. The legal tussle centers around allegations that the NBA breached its contract by rejecting Warner Bros. Discovery’s matching offer for a new media rights deal.
Warner Bros. Discovery has accused the NBA of rejecting their matching offer for a massive 11-year media rights agreement, valued at nearly $76 billion. The new contract, set to cover the 2025-26 season through the 2035-36 season, includes partnerships with media giants Disney, NBC, and Amazon Prime Video. This deal marks the end of a nearly 40-year relationship between the NBA and Turner, a subsidiary of Warner Bros. Discovery.
The Legal Battle
The NBA’s legal response includes a 28-page motion along with supporting documents, requesting the dismissal of the lawsuit with prejudice. The league contends that Warner Bros. Discovery significantly amended portions of Amazon's proposal, making substantive revisions to eight out of Amazon's 27 sections, redefining 11 terms, striking out nearly 300 words, and adding over 270 new words to the original offer.
Amazon’s proposition also included an upfront payment requirement of approximately $5.4 billion to be held in an escrow account. Warner Bros. Discovery, however, suggested syndicated letters of credit in place of the escrow provision. The NBA presented Amazon's offer to Warner Bros. Discovery on July 17, and Warner Bros. Discovery responded five days later, asserting that they had successfully matched Amazon’s offer. However, the NBA rejected Warner Bros. Discovery’s matching attempt on July 24, citing multiple discrepancies.
A Clash of Offers
The NBA has made it clear that they believe Warner Bros. Discovery’s supposed match was not in accordance with Amazon’s terms. "TBS chose not to match NBCUniversal's offer, which would have enabled TBS to continue distributing games via its TNT linear cable network," the NBA stated. "Instead, TBS purported to match the less-expensive Amazon offer, but only after revising it to include traditional distribution rights and making numerous other substantive changes."
The league further argued that Warner Bros. Discovery's revisions amounted to a counteroffer that they were free to reject. "Far from accepting each term of Amazon's offer, TBS's revisions constituted a counteroffer that the NBA was free to reject," the NBA further elaborated. Bill Koenig, the NBA's president of global content and media distribution, reinforced this perspective, stating, "The response made by TBS does not qualify as a match."
Media Landscape Shifts
Amazon Prime Video is set to broadcast NBA games on Friday nights, select Saturday afternoons, and Thursday night doubleheaders following "Thursday Night Football." Notably, Amazon's deal will also include exclusive coverage of critical NBA Cup stages and the NBA League Pass package. This new partnership introduces a significant shift in how basketball fans will consume content over the next decade.
The conflict between the NBA and Warner Bros. Discovery underscores the complexities of matching media rights offers, especially when it involves multi-billion-dollar agreements and significant shifts in the distribution landscape. As Bill Koenig emphasizes, Warner Bros. Discovery’s effort to combine Amazon's lower price with the linear television rights granted to NBC illustrates the financial intricacies at play. "If TBS wanted linear TV distribution rights, it could have matched a separate more expensive third-party offer from NBC, but TBS elected not to do so, attempting instead to save billions of dollars by combining Amazon's lower price with the linear television rights granted to NBC," he noted.
In a counter-statement, a representative from TNT Sports reflected on the importance of their distribution channels, stating, "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."
Warner Bros. Discovery has until September 20 to file its response to the NBA's motion. As the date looms, all eyes remain fixed on how this high-stakes legal and corporate drama will unfold, potentially reshaping the landscape of NBA media rights.