Warner Bros. Discovery and Turner Broadcasting have filed a lawsuit against the NBA over its decision to reject the company’s matching rights proposal and move forward with media rights deals with Amazon, NBC and Disney.
The complaint was filed under seal in the New York County Supreme Court on Friday by WBD’s lawyers, Weil, Gotshal & Manges LLP.
“Given the NBA’s unjustified rejection of our matching of a third-party offer, we have taken legal action to enforce our rights,” TNT Sports said in a statement. “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.”
According to the complaint obtained by TheWrap, WBD and Turner allege that the NBA breached its agreement with the network and “deliberately refused to honor TBS’ rights, forcing TBS and WBD to seek judicial intervention.”
Under terms that run through the 2024-25 season, Warner pays the NBA about $1.2 billion per year for a rights package that includes at least 64 regular season games, including Thursday night doubleheader games and some Tuesday night games, and at least 30 playoff games, including one Conference Finals, each season, among other things.
“TBS has a vested interest in maintaining these distribution rights and
its carefully developed 40-year brand,” the complaint states. “Moreover, NBA telecast rights are a unique asset that cannot be replaced. Each NBA game is a one-of-a-kind live sporting event.”
The company argues that the ability to telecast NBA games “drives significant viewership and ratings” on TNT – which impacts the price the company can charge to advertisers and downstream distributors that license the network. During the 2023-24 season, national broadcasts of NBA regular season games averaged 1.6 million viewers per game, the suit states.
It also provides a “halo effect” that is used to promote other content and drive attention and viewership to other TBS and WBD channels, networks and properties, which makes the company “more likely to successfully negotiate rights to telecast other sports leagues’ events and to obtain more favorable terms with TBS’s own downstream distributors,” they said.
In addition to the distribution rights, Warner notes that TBS has invested “hundreds of millions of dollars in production and talent,” including its award-winning “Inside the NBA” program with Ernie Johnson, Charles Barkley, Shaquille O’Neal and Kenny Smith.
On July 17, the NBA notified WBD of Amazon’s offer, triggering its five-day window to decide whether to match. Warner submitted paperwork to the league on Monday that it planned to match the package. But the NBA rejected the proposal on Wednesday, arguing that it did not match the terms of Amazon’s offer and announced its deals with the tech giant, NBC and Disney shortly thereafter.
“Despite TBS’ clear match, the NBA has purported to grant the rights to Amazon in direct breach of the Agreement,” the complaint continues. “Unless the NBA is ordered to specifically perform its obligations before the 2025-2026 season, TBS will lose the unique and valuable distribution rights that the Agreement (including the MRE) was designed to protect, as well as the many intangible and incalculable benefits that those rights bring to Plaintiffs’ business. Plaintiffs thus have no choice but to bring this action.”
WBD argues that it had a right to match Amazon’s bid under the “cable rights” section of its contract with the NBA.
“The NBA has asserted that because Amazon proposed to distribute
NBA games on its Prime Video platform, TBS could not match by telecasting the
games on TNT and Max, citing Section C.4 of the MRE. But the NBA is wrong,” they said. “TBS properly matched the Amazon Offer by agreeing to telecast the
games on both TNT and Max.”
The lawsuit is seeking a judicial declaration that TBS matched the Amazon offer, preliminary and permanent injunctive relief to prohibit the NBA from licensing the rights to a third party and if that relief is not granted, an unspecified amount of monetary damages.
The league will have 20 days to respond to the summons upon receiving it.
“Warner Bros. Discovery’s claims are without merit and our lawyers will address them,” NBA spokesman Mike Bass told TheWrap.
Shares of Warner Bros. Discovery climbed 3.6% during Friday’s trading session.
