NBCUniversal (NBCU) and Amazon filed statements in New York Supreme Court insisting their contracts with the NBA remain under seal in the Warner Bros. Discovery lawsuit.
The two media companies are not parties to WBD’s litigation against the NBA, filed nearly four weeks ago. WBD’s current Turner deal with the NBA has a right to match provision, which WBD alleges it triggered to counter the Amazon contract, but the league went with the streamer anyway.
WBD filed the media companies’ contracts under seal, and the NBA wants to make that permanent . It’s not unusual for commercial contracts to be sealed in court proceedings, but the parties need to get a final order from the judge.
“The NBCU Non-Parties have, and will have in the future, media rights agreements and other contracts with a multitude of third parties that include or are likely to include commercial terms of a nature similar to those in the (NBA) Agreement,” NBC Sports president Richard Cordella wrote in his filing. “Public disclosure of the Agreement would prejudice the NBCU Non-Parties in negotiations with those third parties, as they would gain knowledge of the NBCU Non-Parties’ interests and assets as well as the ability to compare the Agreement against their own contractual terms, providing an unfair informational advantage that third parties could try to use to extract concessions from NBCU during contract negotiations.”
Similar concerns were submitted by Andy Oh, Amazon’s Principal in Sports Partnerships.
It’s unclear what WBD’s position is, though the company filed its current contract on the docket, as well as a redacted version of the complaint. Moves are underway to allow the unredacted version to hit the docket.
Media companies guard contracts tightly. In the Diamond Sports Chapter 11, cable companies resisted even providing deal terms to MLB , which was seeking to compare them to distribution deals the bankrupt regional sports channel company was negotiating. The judge in that case ordered certain sections be turned over to MLB. While MLB is not the public, that information could filter out if MLB were to oppose Diamond’s bankruptcy plan at a confirmation hearing.
And in the recently completed preliminary injunction heard in Fubo’s lawsuit against WBD, Walt Disney and Fox, the judge several times ordered non parties to clear the courtroom when commercial contracts were discussed.
The presumption in courts is that all documents and testimony are public. Part of the bargain in using taxpayer funded courts is that nothing is secret (it’s why corporations seek arbitration over litigation). The exception to the transparency are trade secrets , like those that might be detailed in commercial contracts.
“These two agreements (NBC and Amazon) include both sensitive financial terms as well as numerous sensitive non-financial terms governing, among other things, production, distribution, and marketing requirements, terms relating to exclusivity (and exceptions thereto), intellectual property rights, and data sharing,” the NBA wrote in a filing accompanying the Amazon and NBC executives’ court papers. “The agreements also reveal short- and long-term business strategies, initiatives, objectives, and future plans not only of the NBA, but also of Amazon and NBCU.”
WBD had the contracts of their competitors because the NBA was obligated to provide them under the right to match provision. In its filing, the NBA emphasized that in giving WBD its competitors’ contracts, they were subject to confidentiality provisions.
The case is at a very early stage. The NBA’s reply to the complaint is due Friday, and WBD’s reply to that is due September 20. After that, presuming there is not a settlement, the NBA will surely file a motion to dismiss. The judge set October 2 as the deadline for that prospective motion from the NBA, with no deadline set yet for WBD’s response.
If the judge were to turn a dismissal motion down, then WBD can commence with discovery demands. This is ultimately followed by summary judgment motions from the sides, which is essentially each asking the judge pre-trial to rule in their favor. Barring that, an actual trial would likely be next year, if not later.
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