The National Basketball Association (NBA) is currently embroiled in a legal tussle with Warner Bros. Discovery over a breach of contract allegation related to media rights. The NBA recently filed a motion to dismiss the lawsuit brought against it by Warner Bros. Discovery after rejecting their matching offer for a new media rights deal with Amazon.
Background of the Dispute
Warner Bros. Discovery, in its lawsuit, alleged that the NBA breached a contract by not accepting their offer, which they claimed matched the terms proposed by Amazon. The NBA, however, counters that the offer presented by Warner Bros. Discovery was not an exact match, leading to the rejection.
The terms of the NBA’s new 11-year media rights deal, which spans the 2025-26 season through the 2035-36 season, were worth nearly $76 billion. This landmark contract includes collaborations with Disney, NBC, and Amazon Prime Video, marking the end of the NBA's nearly 40-year relationship with Turner Sports.
Substantial Revisions and Discrepancies
The NBA's legal response, which includes a detailed 28-page motion and various supporting documents, requests a dismissal of the lawsuit with prejudice. The league pointed out significant discrepancies in the Warner Bros. Discovery bid, specifically the alterations made to the original terms laid out by Amazon. Warner Bros. Discovery amended eight of Amazon's 27 sections, redefined 11 terms, struck out nearly 300 words, and added over 270 new words.
One notable term in Amazon’s offer was an upfront payment requirement of approximately $5.4 billion to be held in an escrow account. Warner Bros. Discovery, however, proposed replacing this with syndicated letters of credit, which the NBA deemed a substantial and unacceptable change.
Timeline and Rejections
According to the NBA's timeline, the league presented Amazon’s offer to Warner Bros. Discovery on July 17. Just five days later, Warner Bros. Discovery responded, claiming they had successfully matched the offer. However, on July 24, the NBA rejected Warner Bros. Discovery’s response, pointing to multiple discrepancies in their matching attempt.
In explaining their decision, the NBA noted, "TBS chose not to match NBCUniversal's offer, which would have enabled TBS to continue distributing games via its TNT linear cable network. 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." These changes, the NBA argued, turned Warner Bros. Discovery’s response into a counteroffer, which they had the freedom to reject.
Implications for Broadcasting
The new agreement with Amazon Prime Video ensures that the streaming giant will broadcast NBA games on Friday nights, select Saturday afternoons, and Thursday night doubleheaders post "Thursday Night Football." This deal also includes exclusive coverage of crucial NBA Cup stages and the NBA League Pass package.
“If TBS wanted linear TV distribution rights, it could have matched a separate more expensive third-party offer from NBC, but TBS elected not to do so, attempting instead to save billions of dollars by combining Amazon's lower price with the linear television rights granted to NBC,” emphasized the NBA. Bill Koenig, President of NBA Global Content and Media Distribution, echoed this sentiment, asserting, "The response made by TBS does not qualify as a match."
Next Steps
Warner Bros. Discovery faces a crucial deadline of September 20 to file its response to the NBA’s motion to dismiss. Until then, the sports and media industries are closely watching this high-stakes legal showdown, as the outcome could set significant precedents for future media rights negotiations.
TNT Sports, defending their stance, stated: "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."
The resolution of this legal battle will not only affect the involved parties but also shape the NBA's broadcasting landscape for years to come, impacting how fans consume their beloved sport.