NBA asks judge to dismiss lawsuit filed by WBD

The NBA has asked a judge to dismiss the lawsuit filed by Warner Brothers Discovery last month against the league that wants the court to enforce what WBD says are matching rights that would allow it to retain a package of NBA media rights in its next national media deal, which kicks in with the 2025-26 season.

Last month, the league ratified a new 11-year, roughly $75 billion set of contracts with Disney, NBC and Amazon for its upcoming national media rights deal.

Warner Bros. Discovery, which owns TNT, and has been a NBA rightsholder for 35 years, was not able to grab a rights package despite having exclusive negotiating rights for a 45-day window that ended April 22.

“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,” a TNT Sports spokesperson said in a statement. “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.”

Warner Bros. Discovery says its 2014 agreement with the NBA gives it the ability to match a third-party offer, and it is attempting to enforce that in New York County Supreme Court for the package the NBA sold to Amazon earlier this year.

The NBA, in its latest legal filing, said that WBD does not actually have that right with regard to Amazon because the matching rights clause in its 2014 deal “did not give TBS the right to match Amazon’s offer” since Amazon intends to broadcast the NBA over the internet on a subscription video on demand service. The NBA claims that Warner Bros. Discovery’s rights are only for linear cable TV distribution.

Warner Bros. Discovery currently airs certain NBA games on Max, its own streaming service, as part of its current media deal, but the NBA claims the rights for that are from a different agreement between the NBA and Bleacher Report — also owned by WBD — and, the league contends in the filing, that contract does not contain matching rights.

“If TBS wanted linear television distribution rights, it could have matched a separate, more expensive third-party offer from NBCUniversal Media LLC (“NBCU”), 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 NBCU,” lawyers for the NBA write in its motion to dismiss. “The (matching rights provision) did not give TBS that option.”

The NBA has also asked the judge to dismiss the Warner Bros. Discovery effort because it says WBD did not match every term offered by Amazon, as it claims were necessary. Those revisions, the league alleges, create important differences between the WBD offer and the one from Amazon.

One such change the NBA points to is how its fees would be paid and delivered. Its deal with Amazon calls for Amazon to create an escrow fund with three years of rights fees that would be replenished every time a payment was made. Warner Bros. Discovery, the NBA writes in its filing, would instead replace that with letters of credit.

The deal with Amazon allows the NBA to end its agreement if S&P or Moody’s downgrades Amazon’s credit rating below an acceptable rating; WBD’s offer would only allow the NBA to end their deal if both downgraded the company. This month, S&P diminished its outlook for Warner Bros. Discovery, whose stock is down roughly 31 percent over the last year.

The motion to dismiss is the NBA’s response to Warner Bros. Discovery’s lawsuit and WBD will have until Sept. 20 to rebut the league’s arguments.

The NBA also revealed parts of its upcoming deal with Amazon, if it goes through, in other filings Friday night. Its deal with Amazon will allow the tech giant to integrate an interactive shopping option into its NBA broadcasts that would let viewers buy items during games. Amazon will also start advertising the NBA on its Prime Video service as of Sept. 1 and during the NFL games it airs on Thursday nights.

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(Photo: Jeenah Moon / Bloomberg via Getty Images)