Warner Bros Discovery Sues NBA Over Rejected Media Rights Bid
Warner Bros. Discovery and its sports subsidiary filed a lawsuit against the NBA in New York.
On Friday, Warner Bros Discovery and its sports division, Turner Broadcasting System, filed a lawsuit against the National Basketball Association (NBA) in New York.
The lawsuit alleges that the NBA violated its agreement with Turner by rejecting their matching bid for media rights. The media company argues that the NBA’s refusal to honor its right to match offers from a third party breaches its contract.
“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,” TNT Sports stated.
NBA’s Response and New Media Deal:
NBA spokesman Mike Bass stated that Warner Bros Discovery’s claims are “without merit.” The NBA recently announced a new 11-year deal valued at $77 billion, granting media rights to Walt Disney’s ESPN, Comcast-owned NBCUniversal, and Amazon.com.
This deal marks the end of a nearly four-decade relationship between the NBA and Turner after the next season. The league rejected a last-minute offer from TNT Sports, stating it fell short of Amazon’s proposal.
Turner’s Investment and Legal Arguments:
Turner Broadcasting asserts a vested interest in retaining the rights to broadcast NBA games, citing significant investments in distribution rights, production, and talent, including the popular “Inside the NBA” show.
The company argues that NBA games are “unique assets” driving significant viewership and ratings, which influence advertising rates and provide competitive advantages in negotiations with other leagues.
Turner claims that the NBA presented them with the deal terms accepted from Amazon for streaming rights to 64 regular season games and at least 30 playoff games.
Turner responded by stating it would match Amazon’s offer and agree to “the same material terms and conditions.” However, the NBA allegedly refused to honor Turner’s match, prompting the lawsuit.
Legal and Financial Implications:
The lawsuit’s outcome may hinge on the court’s interpretation of matching rights. Emarketer senior analyst Ross Benes noted that the dispute could revolve around whether the NBA’s deal with Amazon pertains to streaming distribution rather than traditional television or linear distribution.
Douglas Arthur, an analyst with Huber Research, expressed skepticism about Turner’s potential profitability under the NBA’s new deal, representing a $700 million increase from the current contract.
Arthur noted that Turner would need to significantly raise subscriber fees and secure higher advertising contracts to profit from the increased costs.
