NBA facing major lawsuit

As most expected to be the case, Warner Bros. Discovery and the NBA are heading to court.

On Thursday, WBD filed a lawsuit against the NBA regarding its recently completed media rights negotiations, which left the media conglomerate on the outside looking in favor of deals with Disney (ESPN), Comcast (NBC) and Amazon (Prime Video). CNBC’s David Faber first reported on Thursday that the lawsuit was expected to be filed, with sports legal analyst/attorney Daniel Wallach sharing a copy of the sealed lawsuit on social media on Friday.

After news of the lawsuit was first made public, TNT Sports released the following statement:

“Given the NBA’s unjustified rejection of our matching of a third-party offer, we have taken legal action to enforce our rights. We strongly believe this is not just our contractual right, but also in the best interest of fans who want to keep watching our industry-leading NBA content with the choice and flexibility we offer them through our widely distributed WBD video-first distribution platforms – including TNT and Max.”

NBA spokesperson Mike Bass, meanwhile, issued the following statement to The Washington Post ‘s Ben Strauss : “Warner Bros. Discovery’s claims are without merit and our lawyers will address them.”

While the sealed nature of the lawsuit means that we won’t be learning much about the complaint — at least not immediately from the suit itself — it almost certainly centers on the interpretation of the matching rights Warner Bros. Discovery received in its most recent media rights deal with the NBA, which was signed in 2014.

After the NBA reached agreements with Disney, Comcast and Amazon on its new rights deal — which will go into effect after the 2024-25 season — WBD exercised its matching rights on Amazon’s portion of the package , with the NBA declining to accept the match .

According to Puck’s John Ourand , WBD has argued that its matching rights applied to Amazon’s portion of the package because the e-commerce giant was set to receive assets it had previously held, such as the conference finals and Thursday night primetime games. The NBA, meanwhile, countered that its deal with Amazon is a streaming-only package and that Prime Video’s reach far exceeds WBD’s Max streaming service. There’s also the matter of Amazon’s deal including a “ poison pill ,” with the league arguing that the line of credit WBD secured for the match isn’t equal to the value of Amazon’s upfront guarantees.

These are the arguments that will likely now be litigated, and it will be interesting to see what the court decides or (more likely) what a potential settlement between the two sides looks like.

While WBD filing a lawsuit has been expected dating back to May, when it first became apparent that the media company would be left out of the league’s next deal, this adds yet another chapter to what’s already been a wild negotiation between the NBA and its longest-running media partner.

[ TNT Sports P.R. ]

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