Unless someone calls a time out soon, the legal game between the NBA and Warner Bros Discovery over small-screen basketball rights that the David Zaslav-run media company turned over looks set to go down to some serious 2-for-1.
As promised, the Adam Silver-led league has responded with force to WBD’s heavily redacted July 26-filed suit over the rights Amazon was awarded earlier this year in a multi-outlet $77 billion deal for the 2025-26 season and beyond. In Hail Mary mode, the stock-cratering WBD and subsidiary Turner Broadcasting System desire a court order to stop the Jeff Bezos-owned streamer from even showing games until this is all resolved.
Unsurprisingly, the NBA, which has made deals with ABC, NBC and Amazon for the next 11 years for the league and the WNBA, want to block that move and shut this whole business down with its soon to be ex-partner of nearly 30 years.
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In a late night motion for dismissal to be argued in person in New York state court on October 4, just under three weeks before the 79th NBA regular season tip offs, the NBA made it clear it is not playing games. To put it simply, the gist of the league’s argument is: Sorry WBD, but you’re just not big enough for the NBA, and it looks like you don’t have the cash.
“For example, to ensure the financial security of billions of dollars of rights fee payments over the deal’s 11-year term, Amazon agreed, inter alia, to maintain an escrow account from which rights fees will automatically be paid to the NBA as they become due,” the supporting memorandum of law from the league’s Sullivan & Cromwell lawyers reads. “TBS eliminated this protection by giving itself the option to instead provide the NBA with syndicated letters of credit that the NBA can access only if TBS’s payments are late. That is not even close to the same thing.”
Ouch! (Read the NBA’s sharp elbowed response to WBD’s suit over basketball rights here)
If that didn’t hurt the unsteady WBD, which took a painful $9.1 billion write-down recently in part because of losing its long time NBA rights, the league’s declaration that the legacy media giant just doesn’t have the reach and scope for the 21st century really must wound.
Plaintiffs’ claims fail at the outset because the MRE did not give TBS the right to match Amazon’s offer. As the Complaint acknowledges, TBS’s matching rights are limited to third-party offers relating to NBA game distribution rights that TBS “currently enjoy[s]” under the NBA/TBS Agreement. TBS does not “currently enjoy” the rights covered by Amazon’s offer—namely, rights to distribute live NBA games on a disaggregated, standalone basis via an SVOD service streamed over the Internet. Instead, TBS’s current rights are limited to distributing games as part of a linear cable television network, together with the rest of the network’s programming. Although the Complaint notes that individual NBA games are currently streamed on Max, an SVOD streaming service owned by WBD, the source of the rights to distribute those games in that manner is not the NBA/TBS Agreement, Plaintiffs’ claims fail at the outset because the MRE did not give TBS the right to match Amazon’s offer. As the Complaint acknowledges, TBS’s matching rights are limited to third-party offers relating to NBA game distribution rights that TBS “currently enjoy[s]” under the NBA/TBS Agreement. (Compl. TBS does not “currently enjoy” the rights covered by Amazon’s offer—namely, rights to distribute live NBA games on a disaggregated, standalone basis via an SVOD service streamed over the Internet. Instead, TBS’s current rights are limited to distributing games as part of a linear cable television network, together with the rest of the network’s programming. Although the Complaint notes that individual NBA games are currently streamed on Max, an SVOD streaming service owned by WBD, the source of the rights to distribute those games in that manner is not the NBA/TBS Agreement, but rather an entirely separate agreement between NBA Media Ventures, LLC and a different WBD subsidiary, Bleacher Report, Inc., that does not contain matching rights.
Rubbing salt in the wound, the NBA also allege that WBD lack the heft to effectively promote league games on either TNT or streamer Max – unlike Amazon, who are going to utilize their well-watched NFL Thursday Night Football property.
Sinking to numerous all-time lows in past months, WBD’s stock saw a small uptick upon closing Friday. Still, that must be small comfort for investors like John Malone. The company’s stock has fallen about 70% since the once AT&T-owned Warner Bros and Discovery merged under Zaslav’s leadership in April 2022. Adding insult to injury, a league source tell me that Zas “shot himself in the foot” in regards to basketball rights renewal when he quipped a that “we don’t have to have the NBA” a couple of years ago.
Now, with the much heralded Disney-Fox-WBD Venu sports streaming joint venture on hold due to a court challenge by FuboTV, WBD could really use those NBA rights for its struggling bottom line.
In that fight, WBD says it is in it to win it — no matter how much blood is left on the court. As TNT Sports spokesperson told Deadline this morning:
We maintain our position that the NBA’s actions are unjustified, and we strongly believe we have fulfilled our contractual right to match the third-party offer. 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. We will file our opposition in the coming weeks.
As a side note, that October 4 hearing on the NBA’s bid to have WBD’s suit thrown out will occur on the same day that The LA Lakers face the Minnesota Timberwolves in a pre-season match-up in Palm Springs, and the 2024 champs Boston Celtic play the 2023 champs the Denver Nuggets in Abu Dhabi. Neither of those games are going to be on TNT. However, in the last season TNT has NBA games, the outlet will have the Lakers and Timberwolves official opening night game on October 22.
That looks to be the outlet’s last NBA opening night in a long long time.
The post NBA Slam Dunks Warner Bros Discovery, Says Company Lacks Reach & Cash To Challenge Amazon TV Rights Deal; TNT Insists League’s “Actions Are Unjustified” As Court Battle Heats Up appeared first on Deadline.
