The National Basketball Association (NBA) has taken significant legal steps by filing a motion to dismiss the lawsuit brought against it by Warner Bros. Discovery. This legal tussle revolves around allegations from Warner Bros. Discovery that the NBA breached its contract by rejecting their matching offer for a new media rights deal.
Foundation of the Conflict
Warner Bros. Discovery asserts that it made substantive revisions to match the terms of an offer from Amazon for a new media rights agreement. The NBA recently secured a lucrative 11-year media rights deal, worth nearly $76 billion, which will commence from the 2025-26 season and span through the 2035-36 season. The deal includes high-profile partnerships with Disney, NBC, and Amazon Prime Video, effectively ending a nearly 40-year relationship between the NBA and Turner.
Central to the dispute is Warner Bros. Discovery's claim to have successfully matched Amazon’s proposal, which the NBA received on July 17. Warner Bros. Discovery responded five days later. However, on July 24, the NBA rejected Warner Bros. Discovery’s version, citing multiple discrepancies in the matching attempt.
Detailed Allegations
In the NBA's legal response, which includes a detailed 28-page motion, the league argues that Warner Bros. Discovery's adjustments did not constitute a true match. The NBA’s filings outline that Warner Bros. Discovery amended significant portions of Amazon's original offer. Warner Bros. Discovery made substantive revisions to eight of Amazon's 27 sections, redefined 11 terms, struck out nearly 300 words, and added over 270 new words.
One notable deviation was Amazon’s upfront payment requirement of approximately $5.4 billion, which needed to be held in an escrow account. Instead, Warner Bros. Discovery suggested syndicated letters of credit, a modification the NBA found unacceptable.
NBA's Standpoint
From the NBA's perspective, these changes constituted a counteroffer rather than a match. An NBA spokesperson articulated, "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 emphasized that if Warner Bros. Discovery wanted linear TV distribution rights, they should have matched a different offer from NBC rather than combining Amazon's terms with those linear rights.
Bill Koenig, president of NBA global content and media distribution, stated unequivocally, "The response made by TBS does not qualify as a match."
The Broader Context
Amazon Prime Video’s involvement in the new deal includes extensive coverage, such as broadcasting games on Friday nights, select Saturday afternoons, and Thursday night doubleheaders following "Thursday Night Football." Additionally, Amazon will provide exclusive coverage of crucial NBA Cup stages and the NBA League Pass package.
Interestingly, the NBA noted that TBS had another option. "TBS chose not to match NBCUniversal's offer, which would have enabled TBS to continue distributing games via its TNT linear cable network," an NBA representative explained. "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."
Warner Bros. Discovery's Deadline
With the ball now in Warner Bros. Discovery's court, the company has until September 20 to file its response to the NBA’s motion to dismiss. Warner Bros. Discovery, through its TNT Sports platform, remains optimistic about their contractual rights and the interests of their audience. A TNT Sports spokesperson commented, "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 this legal battle ensues, the sports media landscape waits with bated breath, keen to see how this high-stakes confrontation will unfurl and what it will mean for sports broadcasting in the years to come.