The NBA has moved to dismiss a lawsuit filed by Warner Bros. Discovery, which claims that the league breached its contract by rejecting their offer to match a new media rights deal.
New Media Rights Deal Worth $76 Billion
The crux of the dispute centers around the NBA's recent 11-year media rights agreement, valued at nearly $76 billion. This new contract, set to commence with the 2025-26 season and extend through the 2035-36 season, establishes new partnerships with Disney, NBC, and Amazon Prime Video, among others. Notably, this deal signifies the end of a nearly 40-year relationship between the NBA and Turner, a prominent Warner Bros. Discovery entity.
Controversy Over Matching Rights
Warner Bros. Discovery alleges that the NBA disregarded its right to match Amazon's offer for these media rights. Bill Koenig, President of NBA Global Content and Media Distribution, contends that Warner Bros. Discovery's efforts failed to meet Amazon's terms. According to court filings, Koenig stated, "The response made by TBS does not qualify as a match."
Technicalities in Offer Matching
Details from the legal documents reveal that Warner Bros. Discovery modified Amazon's offer in several ways when attempting to match. Specifically, Warner Bros. Discovery's revisions encompassed eight of Amazon's 27 sections, redefined 11 terms, struck out approximately 300 words, and added over 270 new words. The NBA argues that these amendments were substantial enough to constitute a counteroffer, which it had the prerogative to reject.
The original offer from Amazon encompassed an upfront payment of roughly $5.4 billion to be held in an escrow account. Instead, Warner Bros. Discovery proposed utilizing syndicated letters of credit in lieu of the escrow requirement. The NBA submitted Amazon’s offer to Warner Bros. Discovery on July 17, and Warner Bros. Discovery responded five days later, claiming a successful match. On July 24, the NBA rejected this response, citing significant discrepancies.
NBC vs. Amazon Offer
To add another layer to the narrative, the NBA states that Warner Bros. Discovery had an alternative match opportunity with NBCUniversal's offer. The league asserts, "TBS chose not to match NBCUniversal's offer, which would have enabled TBS to continue distributing games via its TNT linear cable network." This choice underlines the core issue, wherein TBS attempted to merge Amazon's lower financial proposition with the linear television rights embedded in NBC’s more expensive proposal.
This combination, the NBA argued, created an unsatisfactory mismatch. "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 NBA stated in their motion. By juxtaposing the linear TV rights of the NBC deal with the financial structure of Amazon's offer, TBS seemingly aimed to save billions of dollars.
Such maneuvering did not sit well with the NBA, which highlighted the discrepancies in Warner Bros. Discovery’s matching attempt. "Far from accepting each term of Amazon's offer, TBS's revisions constituted a counteroffer that the NBA was free to reject," emphasized the NBA.
Amazon's Role and Broadcasting Plans
In the newly inked deal, Amazon Prime Video is slated to broadcast NBA games on Friday nights, select Saturday afternoons, and Thursday night doubleheaders following "Thursday Night Football." This strategic move broadens the league's reach through digital platforms, a significant pivot from traditional cable broadcasts.
Amazon's partnership also includes exclusive coverage of critical stages in the nascent NBA Cup and extends to the NBA League Pass package, providing fans streaming access to more games and premium content.
Legal Proceedings
The NBA’s response to the lawsuit spans a comprehensive 28-page motion with supplementary documents. In addition to seeking dismissal of the lawsuit with prejudice, the NBA continues to underscore that Warner Bros. Discovery's revised terms deviated too far from Amazon’s original offer.
Tension remains high as Warner Bros. Discovery prepares its response, with a deadline set for September 20. Both parties stand firm in their positions, with the NBA defending its contractual integrity and Warner Bros. Discovery endeavoring to maintain its long-standing broadcast relationship with the league.
The outcome of this legal tussle could reshape the dynamics of NBA media rights and its broadcast partnerships, reflecting broader shifts in the sports media landscape.